Purchasing a new home is a complicated and tedious ordeal entailing several hidden costs. One such cost is stamp duty, which all property owners must pay to the government in order to legally register their respective properties in their name.
Therefore, individuals should use a stamp duty calculator to aid them in determining the costs involved and accordingly plan their finances.
Steps for using a stamp duty calculator
Individuals can calculate stamp duty charges using the stamp duty calculator in these 3 easy steps:
Step 1: Navigate to the ‘Stamp Duty Calculator’ tool via the ‘Home Loan’ webpage.
Step 2: Choose the state where the property is situated.
Step 3: Enter the property’s value.
Upon completion of these 3 steps, the calculator displays the property’s stamp duty charges along with the rates applicable in the chosen state.
What are stamp duty and registration fees?
Simply having a property’s possession is not equal to having legal ownership over it. Individuals must undergo a process of registering their property in the government’s records to gain legal ownership.
- Stamp duty rates
It is a pre-determined fee imposed by respective state governments. It is fixed based on several aspects, and typically ranges from 4% to 7% of a property’s market valuation.
Under the Income Tax Act’s Section 80 (C), individuals are entitled to Home loan tax benefits on stamp duty and registration charges for up to Rs.1.5 lakhs.
- Registration charges
The government maintains a registry of all property-related documents. Hence, a registration fee is a payment required to register one’s property on the government’s registry. Generally, 1% of a property’s market valuation is that property’s registration charge.
How to pay stamp duty charges?
These are the 3 ways to pay a property’s stamp duty charges:
- Stamp papers
Using physical stamp papers is a widespread, error-free, and traditional way to pay stamp duty charges. It requires individuals to go to their respective sub-registrar offices and the stamp paper’s cost is equivalent to the applicable stamp duty.
Franking involves stamping and legalising of property documents by reaching out to government-authorised franking agents. This method requires an additional charge that the franking agents impose on the consumers.
It is an online method of payment, thus, the most convenient and easiest way to pay stamp duty. Individuals can follow these 4 simple steps to do the same:
Step 1: Visit the SHCIL website.
Step 2: Navigate to the e-stamping page by clicking the following buttons in order:
- Products and services
- E-stamp services
Step 3: Choose the state where the property is situated.
Step 4: Fill up and download the online application form.
However, e-stamping is available in a few selected states across the country.
What are the factors that affect stamp duty rates?
The factors that determine how much stamp duty one needs to pay are as follows:
- Property’s current market valuation
- Age of the property
- Property’s location, i.e., urban or rural
- Type of property, i.e., residential or commercial
- Purpose of property, i.e., personal or business
- Available amenities on the property
- Property owner’s gender and age
Documents required for stamp duty and registration charges
Here is a detailed list of all the documents, segmented into types of projects and properties, needed for stamp duty and registration payments:
- General mandates
- Sale deed
- Sale agreement
- Latest bank account statements
- Past 3 months’ tax receipts
- Encumbrance certificate
- Khata certificate
- Power of attorney
- Land purchase
- Tenancy and rights records
- Land-owner title documents
- Conversion order
- 7/12 extract
- Under-construction project
- Builder-buyer agreement
- Sanctioned building plan
- Builder possession letter
- Housing property
- Society registration certificate
- Apartment association NOC
- Society share certificate
- Joint development project
- Builder-land owner joint development agreement
- Property resale
- All registered agreements’ copies
Besides, there are a lot of lending institutions that extend pre-approved offers on home loans, loans against property, and other loan types. This streamlines the loan application process, and in turn, saves valuable time. Loan applicants can check their pre-approved offers by entering the necessary information.
With a better understanding of how payment and calculation of stamp duty and registration fees using the stamp duty calculator, individuals can avoid defaulting in the payment procedure.