Easy Explainer: Everything You Need to Know About Stamp Duty in India

By Lodha

Are you more than eager to purchase your first-ever home? Have you been looking for the perfect office space for your start-up? Regardless of your requirements, entering a real estate transaction takes more than choosing a property. It involves paying keen attention to legal procedures and compliances. One of the terms most heavily associated with property ownership is stamp duty. If you, as an investor buying property, are unsure what the term entails and how it affects your real estate purchases, here is an easy explanation to clarify the concept.

What is Stamp Duty?

Stamp duty is a tax imposed by the Government of India on the sale of property or an ownership stake in real estate. The laws and regulations related to stamp duty charges are governed by the Indian Stamp Act of 1899, especially Section 3.

According to the Act, the amount of stamp duty payable depends on the value of the property in question. The stamp duty amount also differs from state to state, as well as the exact location and whether the real estate in question is a new house construction or an old property. Usually, you have to pay stamp duty at the time of registration.

If you are investing in immovable property, such as a residential space, the amount you pay as stamp duty is counted as additional cost.

What are the Factors that Affect Stamp Duty?

The amount you have to pay as stamp duty depends on an array of factors as listed below:

Age of the owner:

The stamp duty payable does depend on the age of the person in whose name the property will be registered. If the new owner of the property is a senior citizen, they might get to avail of rebates or discounts on the stamp duty amount. However, such concessions differ from state to state.

Location:

As mentioned above, stamp duty charges vary according to location. Stamp duty amounts within the municipal limits of a city may not be the same as that outside. Usually, stamp duty charges are higher within a municipal limit. Also, whether you are planning to buy property within a city, a rural region, a metropolitan location, or a suburb also impacts the stamp duty due.

Gender of the owner:

According to Indian law, female property owners are entitled to a concession on stamp duty on real estate in various states. This provision is designed to encourage female ownership of property in an otherwise patriarchal succession of land. For example, if you purchase and register property in the name of a woman in the NCT of Delhi, you get to avail of a 2% concession on the overall stamp duty. On the other hand, male property owners in the same area have to pay stamp duty at the regular rate of 6%. Owning property jointly with a woman also allows you to benefit from such concessions in certain areas. However, in states like Kerala, Jharkhand, Maharashtra, etc., both genders must pay equal stamp duty fees.

Type of property:

Stamp duty charges also vary based on whether you are buying land, an apartment, a house, or a villa.

Use:

If you are purchasing property for commercial purposes, stamp duty charges are higher. On the other hand, stamp duty charges are on the lower end for residential spaces.

Why Does the Payment of Stamp Duty Matter?

Stamp duty is a legally occurring tax and must be paid in full to provide legitimacy to any real estate transaction. It is a legal document which can be furnished in court and used as evidence. If you fail to pay stamp duty on time, you may have to pay a fine as penalty. Usually, the buyer of the property is required to make the stamp duty payment in full.

If you are planning to purchase real estate, make sure your capital-intensive investment does not go to waste. Pay the requisite stamp duty charges as per the law, on time and avoid legal hassles related to the title of the property or your ownership. If you want to invest in real estate featuring modern construction quality, exemplary design, and a warm atmosphere, look no further than Lodha, one of the top developers in India. At Lodha, we have set the benchmark in offering premium developments to a diverse clientele across the country.

With a credible reputation and a legacy of delivering more than expected Lodha is a real estate company that helps you build a beautiful life