Stamp duty is an additional expense that all home buyers in India must pay in order to become legal owners of properties, according to Indian tax regulations. Because stamp duty rates are frequently high in Indian states, purchasers and sellers frequently try to avoid paying stamp duty. Stamp Duty Calculator is a tool that helps to find the stamp duty on the home loan.
What is Stamp Duty?
When there is a property transaction, the government imposes a tax (i.e., when a property changes hands, from the seller to the buyer). Stamp duty is the name for this tax. Residential and commercial property transfers, as well as freehold and leasehold properties, are subject to this tax. Because stamp duty is imposed by states, the rate varies from one to the next.
The levy is so termed because the stamp mark on the documents attests to the fact that the paper has received official approval and now has legal validity.
What is Stamp Duty Calculator?
A stamp duty calculator is a tool that helps you figure out how much stamp duty you’ll have to pay on a residence in any city or state. By inputting property facts such as the property value and the state in which your home is located, you may simply compute the home loan stamp duty calculator online.
How are Stamp Duty and Registration Charge Calculated?
Stamp duty rates are set by the state governments thus, they vary across the country. Stamp duty charges in India, on the other hand, range from 3% to 10% of the property value. The location of the property, the owner’s age and gender, the property’s use, the type of property, and the project amenities are all factors that influence stamp duty rates. Aside from the stamp duty on property, you’ll also have to pay registration fees, which are usually collected by the federal government and are generally uniform across the state. The registration fee is usually 1 percent of the entire market value of the property. If a person wants to buy a house for Rs.60 lakh in Delhi, where the stamp duty rate is 6%, he or she will have to pay Rs.3.6 lakh in stamp duty and Rs.60000 in registration fees.
How is the Stamp Duty Calculated on Resale Flats in India?
The Indian Stamp Act, 1899, stipulates that all parties engaged in the transaction must pay stamp duty on sale documents. As a result, a sale deed must be registered, whether it is for an under-construction home, a ready-to-move-in flat, or a flat on the secondary market. As a result, a buyer must pay the necessary stamp duty and registration fees in his state, regardless of whether the property is new or old, as long as a sale deed is signed.
If you buy a house in Mumbai that will be ready for possession in two years, you will pay 2% stamp duty and 1% registration tax. If you purchase a home from a resale market, the fees remain the same. The same may be said about ready-to-move-in flats offered by builders.
Tax Benefit on Stamp Duty & Registration Charges
Section 80C of the Income Tax Act allows for tax exemption on stamp duty and registration fees. This exemption can be claimed while filing your income tax returns, and you can get a tax reimbursement of up to Rs.1.5 lakh. Co-owners can file their own income tax returns depending on their portion of the property in the case of joint owners. However, section 80C’s highest limit of Rs. 1,50,000 applies here as well.
Do a Home Loan Cover Stamp Duty and Registration Charges?
Stamp duty and registration are not covered by your home financing and must be paid individually by the property buyer.
According to the Reserve Bank of India’s circular on ‘Housing Loans by Commercial Banks – Loan to Value (LTV) Ratio’ dated February 3, 2012, banks are advised not to include stamp duty, registration, and other documentation charges in the cost of housing property so that the LTV ratio’s effectiveness is not diluted. The government will be charged these fees.
Stamp duty shall be paid before, on, or the following working day after the sale agreement is signed. That is to say, stamp duty should be paid as soon as the sale agreement is signed by all parties.
After paying the stamp duty, the document must be registered within four months of its execution date. The cost is 1% of the market value or agreement value, whichever is greater, up to a maximum of Rs. 30,000.
How to Pay Stamp Duty Charges
Stamp duty is a tax that must be paid during the sale of any property in exchange for legal proof of the transaction. Homebuyers can pay their stamp duty both online and offline, using any of the ways listed below:
- Physical Stamp Paper: one of the most popular and error-free ways to pay stamp duty. Stamp paper can be purchased from authorized sellers by homebuyers. This paper contains all of the necessary information for property registration. The cost of this stamp paper is the same as the applicable stamp duty. However, if the stamp duty is excessive, this method may be inconvenient because you will need to purchase additional stamp papers.
- Fanking: If you’re utilizing this approach, you’ll need to contact an authorized franking agent, who will stamp your property document to make it official. The majority of banks provide franking agent services to homebuyers. If you choose this method, you will be obliged to pay a minimum charge as well as an additional franking charge imposed by the agents.
- E-stamping: You can pay stamp duty online using a SHCIL website, which is one of the most convenient methods (Stock Holding Corporation of India). You can go to the website, choose the place where the property is located, and then submit it along with the required payment to the collecting center. You will receive an e-stamp certification with UIN once the payment is received.
Documents Required for Payment of Stamp Duty and Registration Charges
If you are a homebuyer, you must present the following documents at the time of property registration and stamp duty payment:
- Agreement on the sale
- Deed of sale
- Certificate of Khata
- In the event of a housing project, a photocopy of the society share certificate, the society registration certificate, and the apartment association’s NOC are required.
- In the event of an under-construction property, you must show a building plan that has been approved, a builder-buyer agreement, and a builder’s possession document.
- If you’re buying land, you’ll need to present the landowner’s title documents, records of right and tenancy corps, or a 7/12 extract and conversion order.
- You should have registered a development agreement and a joint development agreement between the landowner and the builder in the case of a joint development property.
- Copies of all registered agreements are required in the case of a resale property.
- Tax receipts for the previous three months
- Bank statements from the most recent period
- Certificate of encumbrance
- If necessary, appoint a power of attorney.
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