Stamp Duty and Registration Certificate

Owning a house of your own is a dream for most of us. This is because of the rising cost of real estate. Purchasing a house involves not only finding the right home but also getting your home loan application approved without any hassle. However, we often overlook the role played by the stamp duty and registration charges while applying for home loans, which takes a toll on our finances. So, considering these charges is important as it tends to vary from one municipal area to another depending on the applicable local rates. Let us check what entails stamp duty and registration charges as well as how they work.

What is Stamp Duty?

It is the fee levied by the state government that helps you to validate the registration of a new property. It is necessary to pay the stamp duty to legalize the property registration document in your name for claiming the ownership of property. The amount of stamp duty is a fixed amount dependent on the agreed value between two or more parties. You can pay the stamp duty on your property through online and offline modes.

How is Stamp Duty charges calculated?

The stamp duty charges range between 3% and 10% in all the different states of India. The calculation is done based on the ready reckoner rate or the agreement value of the property, whichever is higher. For example, if the ready reckoner rate of a property is Rs. 50 lakhs, but the agreement value for the same is Rs. 60 lakhs, stamp duty calculation, will be based on Rs. 60 lakhs as it is higher than the ready reckoner rate.

Note: The ready reckoner rate is the minimum rate of the property that is fixed by the state government. We have already listed all the factors above that impact the ready reckoner rates.

Stamp Duty Calculator

  • With the help of this tool, you can easily calculate the precise stamp duty that you need to pay towards the house in any city or state. You can easily calculate the stamp duty online by entering the property details such as the value of the property and the respective state in which your house is located.
  • Factors determining Stamp Duty and Registration Charges
  • Age of the property: The age of the property plays an important role in determining the stamp duty charges that you need to pay. As stamp duty charges are calculated as a percentage of the total market value of the property, old buildings usually attract less stamp duty charges and new buildings attract a high charge.
  • City/ location of the property: If the property is in a posh urban area it will attract higher stamp duty while a property which is in a rural area will not attract high stamp duty charges.
  • Gender and age of the property owner: The gender and age of the property owner is also an essential factor while calculating stamp duty charges. A senior citizen will have to pay lesser stamp duty on a property, and similarly, women get concessions on stamp duty charges.
  • Usage of Property: A commercial property has more amenities and space as compared to a residential property. Thus, you need to pay higher stamp duty and registration charges for a commercial building.

Documents required for payment of Stamp Duty and Registration Charges

The proof of Identity such as your PAN Card, Passport, Driving License, etc. of both the seller and purchaser

  • The original deed document of the seller
  • The payment proof of the stamp duty
  • Payment details of the transaction
  • The Khata certificate
  • Tax Receipt of the previous three month

What is the Registration Fee on your property?

The registration fee is a cost that you need to pay over and above the stamp duty to get your property registered in your name. It is calculated at 1% of the total cost of the property or its market value, depending on where you buy the property. 

How can you register your property?

To register your property, you would need to submit the original property documents along with their photocopies to the registration office. Make sure, a buyer and seller along with the two witnesses should be present during the process of registration. You will also need to take your ID proofs and proof of stamp copy if you have already paid. You will receive the receipt that contains the unique serial numbers once you complete the entire registration process.

Procedure for Payment of Stamp Duty and Registration Charges

Offline modes-

Physical stamp paper: To pay your stamp duty through this method, you would need to purchase stamp paper from authorized sellers. The details of land registration charges are mentioned in the paper. Physical stamps can, however, be inconvenient if stamp duty charges of the property are high.

Franking: In this method, you would need to visit a franking agent who will apply a stamp to your property papers. This stamp indicates that you have paid the stamp duty. You would also need to pay a specific fee for availing of the franking services which is deducted from the overall stamp duty and registration charges of the property.

Online mode-

E-stamping: You can also pay your stamp duty digitally through the official website of Stockholding Corporation of India. The process to pay stamp online is convenient. You just need to fill in the details such as your property location, age, and value of the property in the application form. The form is then submitted to the collection centre along with the funds required. After paying, an e-stamp certificate with a Unique Identification Number (UIN) will be issued to you.

What happens when you fail to pay inadequate Stamp Duty?

It is not lawfully right to pay less stamp duty for your property. It is required by law, that you pay the right stamp duty while registering your property. Many people undervalue their property and quote a low market value to escape paying high registration fees and stamp duty charges. However, it is not advisable to do so. If you will be caught, you will be asked to pay a huge penalty and can even be imprisoned. Also, if you are a commercial builder, your reputation will be at stake.