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20 APRIL, 2022
Buying a house is a huge financial decision that involves meticulous planning. You need to check your affordability, create a budget, and then look for a home loan to purchase a house, if required.
However, purchasing a house does not stop at merely purchasing a property, it also involves many associated aspects such as stamp duty, registration charges, TDS, and GST, which you must not miss on.
Stamp duty and registration charges are among the most important expenses involved in house purchase. You are required to pay a part of your property value as stamp duty and registration charges to finish the purchase process.
Go through the details below to understand more about these charges.
What is a Stamp Duty?
Levied under the provisions of The Indian Stamps Act 1899, Stamp Duty is a tax levied by the government on any transaction involving immovable property. Stamp duty validates your registration for the property and legalizes your property ownership document. The stamp duty is calculated on the entire agreement value or the ready reckoner rate set by the State Government. The stamp duty charges vary from state to state, and might even vary based on gender, as stamp duty is lower for females in many states. In India, stamp duty usually vary from 3% to 10% across various states.
How Is Stamp Duty Calculated?
The stamp duty rate of any property is determined by its value. If a property is purchased for a lesser price than the ready reckoner rate, stamp duty is charged on the reckoner rate value. If the transaction is worth more than the ready reckoner rate, the fee will be calculated based on the deal value rather than the reckoner rate value. For instance, if a property's agreement value is Rs. 1 crore, but the value as per the reckoner rate is 80 lakhs, then stamp duty will be calculated on the higher value which is 1 crore.
Alternatively, you can also calculate the stamp duty by using the stamp duty calculator. It is an online computation tool that would help you calculate your stamp duty online.
Various factors help determine the exact value of stamp duty payable. These include the type and market value of the property, its usage, location and age, and gender of the property owner.
What Are the Registration Charges?
The registration charges are levied to get the property purchase registered with the Registrar. Under the Indian Registration Act, the registration of a purchased property must be done within 4 months of the purchase. While registration charges can also vary from state to state, for most of the Indian states, these tend to be 1% of the property value of the transaction.
By now, you would have understood that the amount quoted by your property seller would not be the final amount you would have to pay to buy your house. These charges are not included in your home loan amount, and you would need to know about these to determine the total amount required for the overall property purchase. A successful purchase, without hassles, requires you to understand every aspect of it during the buying process. Therefore, plan your property purchase carefully, keeping these factors in mind.
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