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.
18 JANUARY, 2022
Every individual dreams of buying their own house one day. If you are thinking about finally applying for a home loan and buying a house, that’s great news! However, before doing so, you need to first figure out the expenses that are involved in buying a house. Now, it is important to also note the stamp duty charges while calculating the cost of a property purchase.
The state government levies stamp duty when a property is transferred to a buyer from a seller. Once this fee is paid, the buyer will receive a receipt of acknowledgement for the stamp duty payment. This receipt is very important as it confirms the buyer’s legal ownership of the property.
So, how do you calculate stamp duty charges? Let’s find out!
How to use a stamp duty calculator?
This calculator is an online tool that can be used to find out stamp duty and registration charges. Once you come across the stamp duty calculator on our website, all you need to do is enter the value of your property and select the state. After this, the calculator will immediately display the stamp duty fee that you are supposed to pay. Simple, isn’t it?
Why is paying stamp duty so important?
Without paying the stamp duty, your property purchase is deemed incomplete. Completing this payment is necessary to finalise the legal documentation that states you as the owner of the property. The stamp duty is generally set between 5-7% of the property’s market value. Do keep in mind that you also need to pay the registration charges, which is generally 1% of the property’s market value. Since these expenses can run into lakhs of rupees, it is very important to include them while calculating the total cost of the property. This will help in setting a budget for the property purchase.
3 Different Ways to Pay Stamp Duty
This involves getting in touch with a franking agent who applies a stamp to the property documents. This indicates that the stamp duty charges have been cleared. Do keep in mind that the franking agent levies a franking charge that is deducted from the overall stamp duty that is payable.
E-stamping is considered to be one of the easiest ways of paying stamp duty. This method involves paying stamp duty online by logging on to the SHCIL website (Stock Holding Corporation of India). Once you are on the website, choose the state where the property is located, fill in all the details of the application form, and then send it to the collection centre. Once the payment is completed, you will receive an e-stamp certificate that has a Unique Identification Number.
Physical stamp paper can be brought from an authorised seller. This paper is going to include the property registration details. Since you are required to buy a number of stamp duty papers, it can be expensive if the stamp duty fee is high.
Stamp duty charges are not covered by a home loan, which is why it is important to ensure you have the funds ready for this expense. Using Kotak Bank’s stamp duty calculator will help in determining whether the total property cost is suitable to your budget.
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