Know about Stamp Duty and Registration While Buying a House
Updated on December 18, 20185 mins read
Updated: January, 2018 As much as you would love to be a proud owner of your dream home, tedious documentation and registration procedure does not make the journey any easier. The physical possession of a property does not alone determine the ownership. All the necessary documents and legal papers should also indicate clear title. The legal acquisition of a property requires the homeowner to pay stamp duty and carry out registration of the documents. Let us understand in detail how it works.
What is stamp duty?
Stamp duty is a kind of property tax, that needs to be paid when the property changes hands. It is similar to the sales tax or income tax collected by the government. When you buy land or a house anywhere in India, you need to pay stamp duty based on the value of the transaction.
Why should you pay stamp duty?
A house sale agreement, on which the stamp duty has been paid, acts as a legal evidence in the court in case of a dispute. It is proof that a property is officially registered in your name. When you pay stamp duty, it is automatically recorded in the property purchase transactions maintained by the government. The non-payment of stamp duty will take away the value of the deal.
What will happen in case of delayed payment of stamp duty?
Stamp duty should be paid before, on the day or the next working day of the execution of the sale agreement. That means, stamp duty should be paid immediately after all parties sign the sale agreement. If it gets delayed, you would be required to pay a penalty of 2% every month on the deficit amount of the stamp duty, subject to the maximum rate of 200%.
How is the stamp duty calculated?
Stamp duty is calculated on the market value or the agreement value, whichever is higher. Further, it is payable only on the contents of the registration document, and not the transaction value. Stamp duty is levied on every agreement and not on every person involved in the transaction. To assess the market value, stamp duty authorities refer to the Stamp Duty Ready Reckoner, which is issued on 1st January every year by the government. Stamp duty charges vary from state to state. The amount also depends on several other factors like:
Old or new property
Rural or urban property
Male or female property owner
Agricultural or non-agricultural
Freehold or leasehold
Residential or commercial units
Multi – storied apartments or independent houses
For example, Tamil Nadu charges the stamp duty @ 7%. However, in Rajasthan, the figure stands @ 5%, 4% and 4% respectively for general, female and disable categories. If you are buying a flat, the stamp duty is payable on the basis of the Undivided Share (UDS) of the property. So, if there are 5 equal sized apartments made on 5000 sq feet land, then each member needs to pay stamp duty for 1000 sq feet area. You can visit the official website of your respective state government to know the updated stamp duty charges and other related details.
How to pay stamp duty?
There are three officially recognized ways of paying stamp duty:
Non- judicial stamp papers
This is one of the most common methods to pay stamp duty. Here, all the details pertaining to the agreement are either written or printed on the non-judicial stamp physical papers purchased from a licensed vendor. The value of stamp papers will be equal to stamp duty applicable. After ensuring the correctness of the content, the stamp papers are duly signed by the executants.
In this method, the agreement details are printed on a blank paper and submitted along with the stamp duty amount to a bank authorized to carry out a franking transaction. A special adhesive stamp equivalent to the value of stamp duty is then affixed by the bank on the document with the help of a franking machine. The bank may charge a fee for this service.
This is a digital system of paying stamp duty, making it a highly secured and tamper proof option. These are the steps you need to follow:
Log onto the official website (shcilestamp.com) of Stock Holding Corporation of India Limited (SHCIL).
Make the payment through NEFT/RTGS or cash/cheque/DD deposit at any of the SHCIL branch offices.
You will then get an e-stamp certificate bearing the issue date, type of stamp duty, unique certificate number (UIN) and 6 character alphanumeric string. However,the e-stamping facility is available in only certain states, the details of which you will get from the SHCIL website.
What is registration?
After you pay the stamp duty, the document needs to be registered under The Registration Act, 1908 within four months from the date of execution.The registration is done by the Sub Registrar of Assurances of the jurisdiction, where the property is purchased. An entitlement to the said property is invalid unless the registration is completed.
What is the registration fee?
The registration fee is over and above the stamp duty charges. It is incurred to get the property transferred and registered in your name. The fee is either 1% of the market value or the agreement value, whichever is higher, however, subject to a maximum amount of Rs. 30,000. This fee varies from state to state.
What is the procedure to register a property?
To register a property, the original document needs to be printed on a side and submitted with two photocopies of the original to the registering officer. Both buyer and seller, along with two witnesses should be present during the registration. You will also need to carry an ID proof and a proof of stamp copy, if already paid. After the procedure is complete, a receipt bearing a distinct serial number is issued.
Here are a few tips to Save on Stamp Duty and Registration Charges:
Yes, you have read it correctly! You can reduce the stamp duty and registration on your agreement in any of these three ways:
Register the property in the name of a female family member, if the rebate is allowed in the state, where the property is located.
Claim the amount up to Rs. 1,50,000 paid on stamp duty and registration as a deduction under section 80C.
Register the property at the ready reckoner prices published by the government. This reckoner is also called circle rates or guidance value. These are the base prices, and always lower than the actual market value of the property. Selling or buying below the base prices would be deemed a black money transaction. Both seller and buyer can reap the advantages by agreeing to a ready reckoner price. The seller can save on the Capital Gains Tax while the buyer can reduce his overall cost of the property acquisition. This is a legal method, and hence safe.
SwitchMe is an end-to-end service that helps you with everything related to your Home Loans – identifying the right lenders to figuring out the best tenure, interest rates to even balance transfers. Let us help you in your journey of taking home loan. Signup for all your Stamp Duty related queries. One of our customer Mr. Abhishek Gupta says “The team is very good, they are highly patient and do not give up even with banks like SBI, a must try service”. We hope the above information has been useful to you. Do share your views.
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Hi, I have purchased a property (3400 sq feet) 2000 sq feet land and house (1400 sq feet). Total cost for land is 15 lakh and house is 10 lakh (as per sale deed/registration document). I paid 2 lakh as stamp and registration charges. Property has been registered in my name and paying EMI for the housing loan. Painting and other work will be getting completed by Mar 2018 and we incur the expenses. Question 1. Can I show 2.04 lakh as stamp duty exemption under 80C or only stamp duty for the cost of house (Rs 80,000 i.e 8% of 10 lakh) 2. I have started paying EMI (housing loan for property -land and house) from Dec 2017 onwards, can I show full Interest and Principal under tax exemptions. Please advise
Thank you for writing in to us.
As a general rule, you will be able to claim these deductions only for residential house and not the land.
Have the land and house been registered in two separate agreements?
Hi, I want to purchase resale property in Kalyan, Thane district. How should i know there is no other registry is done against this property by owner with anyone else before i purchase and registered with my name
Thank you for writing in to us.
To find out, you would need to visit the local registrar office and verify the ownership of the property in question.
I am a buyer of flat. I paid stamp duty and other expenses in cash. When I got the receipt for stamp duty and other expenses it was in the name of seller. Is it justifiable or I should take action ?
Thank you for writing in to us.
Stamp duty receipt must be in the name of the owner, in this case – you.
Please visit the registrar office and clarify this issue immediately.Your broker or builder maybe able to assist you too.It would be good to look through all other documents to make sure they are in your name.
Can you please tell what is the current stampduty rate for grampanchayat area in Pune(keshav nagar). I want to know if it is revised from 5% to 6% and if so when is it revised.
Can you please share the information on the same.
Thank you for writing in to us.
It has been 6% for a while now.When you break it down, it comes down to 5% stamp duty and 1% registration.
Hi i am planning to buy a 2 bhk resale flat. The owner has registered the flat just 1 week back after paying all the stamp duty and registration charges. Do i again need to pay the stamp duty charges to register the property on my name?
hi , we are paying a flat (in my wife name) in Bangalore (1 bhk) and government guidelines is more than sale consideration for example government guidelines value comes to 32,00, 000 and we are paying sale consideration around 25,00,000 then how much or percentage of stamp duty and registration fees should be pay..
Thank you for writing to us and extremely sorry for the delay in response.
According to the rule, you will have to pay 5% of the registered value of property as Stamp Duty and 1% of the registered property value as Registration fees.
We booked 2bhk under construction flat at Pune and Builder had paid stamp duty & registration charges for registration agreement process,
but haven’t done with the registration process yet,
Now because of some personal problem we cancelled this flat.. Now they issued challan….I want to apply for refund of stamp duty & registration charges …Plz explain me the procedure ?
is there any deduction for stamp duty & registration charges refund amount ?
what are the document do i need for abv case ?
plz help me out 🙁
Thankyou for writing to us.
Refund of stamp duty has to be claimed within six months. Stamp duty is refunded after deducting of the 10% of the total amount of Duty paid, but refund of payment made through e-payment, the deduction is 1000 per challan. Stamp duty charges can be refunded but i am not sure about the registration refund. For documents and procedure kindly refer the link below:
Sir,i have booked lodha elite flat and they are giving possesion in nov 2016 and my home amount is 49 lakh and loan taken from icici is 29 lakh and paid 6 lakh already through cash but i cant pay remaining 16 lakh through cash or anyhow. so i want to sell my property without taking possesion is there any way and lodha told that if i cancel my property then i will lose everything money i have paid till now and i cant sell my property until i pay full 16 lakh and take possession.please help me is there any way how much refund i will get if i cancel my property without taking possesion and currently i am paying loan amount of 10 lakh for property thanks hope for positive reply…
You can take top up loan from your existing bank to pay the remaining amount. I am not sure if you would be getting the refund, since your builder has already denied it. Also the refund policy varies from builder to builder.
Hi do flat sale agreement in year 1987, consists floor plan, and carpet area,if yes then, what should I do if it is not mentioned in my agreement….???? My flat is located in Mumbai…
Flat sale agreement consists of floor plan ans carpet area since 1963. You need to ask your builder if it is not included in your agreement.
hi, i am paying a stamp duty of Rs 5.5 lakhs and Rs 30 k as registration fee. however the broker is charging a tax handling fee of Rs 3500. I beleived the tax payment and registration cost would be done on-line and hence should not involve any material cost. so I wanted to know if his demand of Rs 3500 justified or no? thanks
Normally a fee of Rs. 4000 needs to be paid to the registrar after paying a stamp duty and registration fee. Though I am not sure if this handling fee of Rs. 3500, which your broker has charged will be utilized for the same.
I’m purchasing plot 2013 by builders and bank loan but not pay stamp duty & registered of plot own name .now registery of plot own name & pay stamp duty. extra charges will be include.
Sorry i am not able to understand your query.
i have purchased a flat from my father in law in april 2015 and got the sale agreement done, i paid 5% stamp duty and rs 30000/- registration fees. i have taken loan from the bank to pay him the consideration of the flat. Being a family member whether stamp duty is applicable to me and if no what is the time limit for me to claim the refund of stamp duty
If the property is registered under your name you will have to bare the stamp duty charges.
I am planning to buy a new home in delhi ncr.
But i have a fear of getting trapped in wrong hands, which may be either a fraud builder or any other selling party.
I feel following risks :
1. After i complete the purchase, some other party comes and claims that it is their property.
2. Or later i find that the home was built on an u authorised ground.
Can you please explain in detail the steps, check points, and documentations, to be done to minimize this risk. How can i get assured that i did not fall in wrong hands?
Thanks in advance.
1.Before finding out whether a builder has secured all the approvals to start construction, you must check the ownership of the land on which the project is to be developed. For this, you can ask the developer to show the allotment letter of the land, if it has been purchased from a government agency.
2.The important documents that must be thoroughly checked before buying property in the National Capital Region include government approval letters, title clearance certificates and property tax payment receipts.
3.The major set of approvals that must be obtained by a builder are building plans and floor plans, structural safety certificates, no-objection certificates from the civic authorities, environment clearances, urban land ceiling certificates , commencement certificates and title deed. They will also have to secure an NOC from the water authority to use water for construction.
4. You must insist on a written agreement with the developer. It should clearly mention the specifications of the apartment and all the terms and conditions, including payment plan, time of delivery and quantum of penalty if any party defaults — construction deadline in the case of the developer and payment schedule in case of the buyer. This will also take care of hidden costs, if any.
5.You should also physically check the occupation certificate, fire safety equipment and mechanism, water and electricity connections and property tax receipts for the project.
Very good article on stamp duty and how to avail tax benefit. Women concession wherever applicable. Superb!!
How to purchase land purchase stamp duty required by paying amount as cheque or RTGS?
Could you please elaborate as i did not understand your query?
I purchased an under construction 2 BHK flat in Gurgaon last year. The original allotee had brought it at 5000 psf in 2009. I purchased it at 8000 psf in 2015. As per IT requirement I had also deducted 1% TDS at 8000 psf rate. Now the project is complete and builder is offering possession. So on which rate my stamp duty will be calculated – 5000 psf or 8000 psf?
Stamp duty will be calculated on 8000 psf in your case as higher value is taken into consideration for the calculation of stamp duty.
When a Partnership Firm going to purchase a property in which ,ore than 51% stake in the name of women. Then 1% exemption benefit available from stamp duty payment on property.
Thank you for your valuable inputs.
hi, I am already in process to buy a resale flat in Vadodara, Gujarat. The loan process is almost complete, and the amount is about to be dispersed… but due to nature of job, I will need to travel outside India immediately for 3 next months.. Is it possible to carry out the registration and stamp duty process after my return in first week of November? We initiated the loan process in 2nd week of July.
You need to get in touch with your bank for this.
I heard there will be a rebate on Stamp duty and Registration amount if a flat is transferred within 2 years of registration. I am talking about Mumbai.. Could you please confirm or correct me if I am wrong. Thanks
Rebate can only be claimed in the year of payment Stamp Duty and Registration Charges.
I have booked a flat in mumbai around 1 year back to a developer whose building is under construction and supposed to be 18 storeys, however he has only come upto the sixth slab and i only have an allotment letter, when can i pay stamp duty & registration fees.
You will have to pay stamp duty and registration fees at the time of transferring the ownership of property to the government.
I bought flat at ambernath, Maharashtra. I get registration done in may 2016 but now i want to sell it to other person. Is it required to pay again registration and stamp duty on same property by the second owner or not?
The second owner will definitely have to pay registration and stamp duty charges again.
I have purchased a flat in Mumbai along with stamp duty 3 years ago.
So, do I need to pay property tax each year and also I am purchaser and not tenant.
Please advice, because each year I am paying Rs 30,000 to society as property tax.
Property tax has to be paid by the owner every year and the tax amount varies as per the property value.
Hi, originally our flat was purchased in my and my brothers name. Now that I have paid off his share, want to remove his name from agreement. Can you suggest the procedure?
You can approach your Lawyer and he would help you out with the procedure.
I have bay property in Grampanchayat area so in same what percent stamp duty will be charge?
Sorry for the delay in response. Stamp duty differs as per the location, so kindly provide your location so that i could help you out.
My father purchased a flat in 1986 in mumbai for 75,000/- 270sq ft area, then he dint paid the stamp duty & registration fee. Now we need to pay the stamp duty & registration fees, will it be prevailing rate or old rate? Please advice
The stamp duty will be charged on the property agreement value as in 1986, at the time of purchasing the property. It will not be charged on current market rate.
dear madam/sir, what may be the total registery cost including all taxes,stamp duty,registery cost of a flat purchased at jamshedpur for 32.5lacs.
Hi Mr. Prasad
It will be difficult for us to provide you with an estimate of the costs since you’re property is based in Jamshedpur and we have little knowledge about the property rules and costs there. I apologize for not being of any assistance in this regard. Do let us know if we can help you out with anything else 🙂
Im buying a new flat in udaipur rajsthan
The sale aggreement is 20 lac. Pls tell me what other ecpencesbi have to bourne ie stamp/registration/vat/cst ?
Unfortunately, we will not be able to assist you in this regard as we do not operate in Udaipur, Rajasthan. Thus we are unaware of the property charges, rules and regulations in that area. As you must be aware, rules of property are not standard across India and in fact vary in different cities and towns. Do let us know if we can assist you with any other queries related to your property or finances 🙂
I am planning to buy flat and builder said that I need to pay registration Amount Rs. 3.5 lakh and flat cost upto 24.5 lakh. So total 28 lakh. So can I get loan upto 25.2 lakh if the total cost is 28 lakh or bank will only calculate 90% loan amount on 24.5 lakh??? Please help
According to latest RBI regulations, the bank will give you a home loan of upto 80% of the property value, not including the stamp duty/ registration charges. the additional charges of 3.5 lakhs will have to be borne by you separately. I hope this helps 🙂
My mother(sr.Ctz.) entered in to an agreement for purchase of a flat(2203sqft) at Rs.1550/sqft . Now the construction is getting over. Now the guiding value is Rs.2500/sqft.
Q1.Whether the stampduty registration will be calculated for UDS or 2203sqft.
Q2. if at all she pays stampduty as per guiding value, then whether builder has to pay to any tax for the extra amount that is the builder has been paid 1550×2203 but reg. for 2500×2203.
may pls. clarify
The stamp duty registration is calculated on the amount agreed at the time of purchase and not the current market rate. Hence, you will need to pay registration fees on 1550×2203 and not 2500×2203. The same goes for the builder, any taxes or fees applicable to him will be calculated on the rate at the time of purchase and not the current market rate. I hope this helps clarify your doubts 🙂
I was planned to purchase a house in past. I was paid e-registration fee and deposit to the Sub-registrar office at Janakpuri. Now deal is cancelled. I would like to know, how can I claim 1% e-registration fee from the sub-registrar office. kindly guide. regards,arun mitra
Here’s how you can claim refund on your registration fees:
1. A refund needs to be claimed within 6 months of paying the registration fees.
2. Please fill this form : download here
3. This form needs to submitted to the collector’s office, to claim the refund.
4. Do note, that a list of all the documents you need to attach are mentioned on the document itself.
Do let me know if I can help with anything else 🙂
I am working with UN in Lao PDR and my family is residing in Delhi.
I purchased a plot from Jay Pee Greens Noida and paid all the dues. The plot is jointly owned by me and my wife. I received possession offer form the builder and now have to get the plot registered. I have few queries:
1. As the plot is jointly named- can my wife alone get it registered? If not then what are the documents required?
2. I came to know that the stamp duties are going to increase in Noida, Can I pay the stamp duty now and get the registration done after two months, when I will be in India.Will it save some cost on registry?
An early response will be highly appreciated.
Thanks in advance
Here’s a clarification to all your queries;
1. Yes, even though the plot is jointly owned, your wife can go ahead and pay the stamp duty alone. The only drawback of this is that the payment receipt will have only her name on it, which means that you will not be able to claim tax benefits under section 80C for paying the stamp duty, only your wife will be able to do so. However, for registration, all co-owners of the property are required to be present.
2. So answering your second question, yes, your wife can do the stamp duty now, and you can register the property later, when you are here 🙂
Hi Smita ,
Property Tax related query
The difference between the agreement value 2011 & registration value 2013 @ ready reckoner rate.
How does the profit or loss incurred impact the buyers tax liability ?
If there is profit will it be treated as income & do we need to pay additional tax for the difference in the amount?
The difference in agreement value and registration value doesn’t affect the buyer’s tax liability as such. Tax rebate on registration will be applicable in the registration amount. Any difference between the two amounts will have no tax liability on the buyer, whatsoever.
I had purchased an under construction house in Jan 2013 and paid the stamp duty 6% plus registration 1% and got the agreement registered at the sub registrars office. I am taking possession of the constructed property now. Will I have to pay stamp duty and registration again and get registration again. Please advise. Thanks.
If the property is registered in your name then you don’t need to register your property again in sub registrar office.
i had purchased a flat in 1987 that time stamp duty was not there .should i pay stamp duty now? society say i have to pay stamp duty.already i have a registered copy of the agreement from the register office.then why should i pay stamp duty now pl reply.
As per our understanding, since you have a Registered copy of the Agreement, there is no need to pay stamp duty now. However, it will be best if you get confirmation on this for your property from the Registrar’s office.
I had paid Govment stamp duty 1 year before but due to some reason i was unable to purchase that property yet, Is that mean that i have to pay stamp duty again?
Yes, you will have to pay stamp duty again for the new property that you are purchasing.
Is agreement value of flat includes other charges like Water Connection,MSEB connection,Society formation for stamp duty calculation or it only includes only basic cost of flat(i.e.Sqft area * rate)
The agreement value of the flat includes only the basic cost of the property, all other costs are over and above this value.
I have taken a SBI Home loan.
80% of Loan amount excluding the registration is based on the sale agreement with the builder.
Will SBI insist to register the Property as per Market Value( Sale agreement cost) ?
or can we still register at Guideline value as SBI is not financing the property registration
Since this is a matter of internal bank policy, it may vary from case to case, so its not possible for me to give you a definite reply. Please contact your SBI branch for clarification on the same 🙂
Keep thiis going please, great job!
why do we need to pay share captial to banks to take mortage home loans from banks?
Hi Mr. Reddy
I apologize for the delayed reply. Unfortunately we will not be assist you with a clarification of the query 🙁
It was great to read your brief bio. Inspiring…
Well, I have a couple of doubts about capital gains calc.
1. In 2008/09 I purchased a plot. I was naive and allowed the seller to craft the doc. While the actual cost was much higher, the sell deed reflected compensation well below the market value. Going by the rules, I had to pay stamp duty and registration according to ready reckoner rate.
Now I am planning to sell it. How will the capital gains (/losses) be calculated? Will we take into account the compensation value or the then reckoner rate (i.e. market value) on which I paid stamp duty/registration?
2. When do we discount the stamp duty / registration costs we had paid at the time of buying? Before calculating cost of acquisition or from the net capital gain/loss?
3. While the registration happened on 4/4/08 there are two frankings on the doc – one on 29/2/08 and one on 2/4/08. Going by my first franking payment can I take cost of inflation index of 07/08 or do I have to consider 08/09?
4. Can the annual cleaning of plot be considered improvements and discounted for calculation of capital gains?
5. Can the brokerage paid for (by cheque) be discounted from capital gains – how?
Thank you for bearing with the queries and Happy Diwali.
Thank you for the appreciation, unfortunately, I do not hold expertise to answer these questions accurately. A real estate or a financial expert should be able to do the right justice to your queries. Here’s wishing you a Happy Diwali 🙂