Understanding Stamp Duty Charges: Know How to Calculate It

Owning a house is everyone’s dream. But soaring real estate prices make it difficult for you to find the perfect house. Affordability is certainly a big factor here. The amount of funds you have available can play a role when seeking approval for your home loan. But the cost of the house is just one part. There are other charges to consider as well, such as stamp duty and registration charges. These are among those costs that you need to bear when buying a new home. Being aware of these extra costs can ease your financial stress as a homebuyer.

What is Stamp Duty?

Stamp duty is a tax levied by the government with respect to your property documents, such as conveyance deed, sale deed, and power of attorney. The tax comes into play when you buy, sell, or transfer a house. A document on which stamp duty has been paid is considered to be a valid legal document. Such a document can be produced in court and it has evidentiary value. So, you will be liable to pay stamp duty not only when acquiring a new home but also when selling it or transferring the property in someone else’s name.

How is Stamp Duty Calculated?

The amount of stamp duty you need to pay will depend on two things:

1. the valuation of the property

2. the location of the property

The state government does the calculation and decides the applicable fee depending on the circle rate of the property. The rate tends to vary from state to state. Besides, the charges differ based on the nature of the property. For example, the stamp duty for a residential property is different from that of a commercial property. Whether the property is in a rural or an urban area will also have an impact on the stamp duty fee.

Use a stamp duty calculator to assess the overall costs of the transaction. Factor this in when seeking a home loan. If you are eligible, you could get a large loan. Non-banking financial companies (NBFCs) offer home loans of up to Rs. 5 crore.

You can pay the stamp duty for your new home in a number of ways. The payment options include the use of non-judicial stamp paper and e-stamping. You could also pay through an authorised franking agency or a bank.

About Registration and Fees

To register the property, you will first have to pay the stamp duty. The registration process is carried out at the office of the Sub-Registrar of Assurances where the property is situated. Without this, legal ownership for the property cannot be achieved.

There is also a fee for getting the property registered. The fee is 1% of the agreement value or market value, whichever is lower. This fee is required for properties that are valued above Rs.30,000.

Documents Required at the Time of Registration

The registration of the property is an important step. So, you need to be careful about the paperwork you provide. Here’s a list of the required documents.

• Identification documents of the seller and the purchaser such as PAN card, voter’s identity card, and passport

• Original copy of the deed along with two photocopies which have been submitted earlier at the Sub-Registrar of Assurances

• Payment receipt of stamp duty

• Payment details of the transaction

• Receipt of taxes paid along with the Khata certificate

You will get a receipt and a unique serial number once you complete the above procedure.

Summing Up

These days, getting a home loan is easy. You can approach several banks and NBFCs for attractive deals. For example, Bajaj Finserv brings you pre-approved offers for home loan and other financial services. Not only does this simplify the process of availing financing, but it also helps you save on time. All you have to do is share a few basic details and check out your offer.