08 JULY, 2022

When you buy a property in India, the state government levies a certain fee in the form of duty. Stamp duty value is administered by the state government mentioned under Section 3 of the Indian Stamp Act, 1899. This is a tax charged on the transfer of property ownership to validate the registration agreement. You can pay the stamp duty through three ways - e-stamping, non-judicial stamp papers, or franking. Once you pay the stamp duty, you get an acknowledgement receipt that acts as a proof of property legal ownership.


Since the amount of stamp duty is determined by the state governments, the rate differs from state to state. Let’s dive into several other reasons behind different stamp duty charges and how do you calculate it?

Different stamp duty charges in different states: why? 

The basic criteria that influence the stamp duty charges across states include:


1. The stamp duty levied on a property will be based on its value in the state where it is located.


For example, in Kolkata, the stamp duty on a property worth up to Rs. 25 lakhs is 6%, while in Bangalore, it is 2% up to Rs. 20 lakhs. You can calculate the stamp duty needed for property registration in different states with a stamp duty calculator. Simply select your state and enter your property details to calculate your stamp duty online. 


2. The rates of stamp duty vary on the type of property being purchased. For example, commercial properties attract higher rates of stamp duty than residential properties. This is because commercial properties often need tons of amenities, security measures, and floor space.


3. The rules and regulations governing stamp duty and registration charges are constantly changing. This means that the charges you pay today may not be the same as those you would pay if you made a purchase in the future.


4. Stamp duty charges are usually based on the jurisdiction under which your property falls, such as rural area, city area, suburban, or a metropolitan area.


5. Age and gender also affect the stamp duty rates. To encourage more women to own properties, many state governments offer stamp duty concessions to female home buyers. Moreover, many states also offer rebates on circle rate to senior citizens.


6. Condition and location of the property also decide the stamp duty charges. If the property is new, it can have higher market value. Moreover, if the property falls under a prime location, its value can be higher.


Besides these, other costs like deeds of partition may also be included that can affect the amount of stamp duty.

No matter what type of property you are purchasing, such as a newly constructed, resale property, or under-construction, paying stamp duty is a must. These charges are usually not included in your home loan amount. Thus, it is important to calculate stamp duty first to determine the total budget for purchasing a property.


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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.