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11 MAY, 2022
Purchasing a property doesn't stop at paying the cost of the property to the seller. There are several additional expenses and taxes that you need to take care of. These additional charges are equally important to complete the procedure. To make sure that the additional costs and fees do not suddenly add up to your existing burden of loans, it is advised to know the amount you would need to incur. One of these additional charges is stamp duty. Stamp duty is levied on property purchases and is based on several factors. Let's dig deep and understand more about them.
What is stamp duty?
Stamp duty is an indirect tax levied by the state government on the transfer of properties. It is levied irrespective of the property type you purchase, be it residential or commercial, under-construction, ready-to-move house, or resale property. As the stamp duty is determined by state governments, the rates are different for each state in India. Many state governments levy lower rates for female home buyers compared to those offered to men.
How is stamp duty determined?
State authorities determine the stamp duty rate on the circle rate or market value of the property, whichever is higher. Typically, the stamp duty rate is between 5% to 7% of the circle rate or market value. The market value and circle rate are dependent on various factors such as:
How to pay stamp duty?
You can pay the stamp duty charges offline or online. However, the online medium has made it easy to know and pay your stamp duty charges faster. To pay stamp duty online, you can visit the official portal and log in with your credentials. Once you do that, you would be asked to select the state in which you purchased the property. Now you can make the payment through a demand draft, cheque, RTGS, etc.
If you do not know your stamp duty obligation, you can use a stamp duty calculator. With this computation tool, you can find your stamp duty and pay it through the official portal. Input values like property value, rate of stamp duty, gender, and state to get the results.
The bottom line
Without paying stamp duty charges, your transaction remains incomplete, and ownership is not transferred. Therefore, you must be aware of your stamp duty obligation when you plan to buy a house. Moreover, the stamp duty charges are not included in the home loan value, and you need to pay them upfront. Therefore, knowing your obligation will help you determine the amount you need to transfer the home in your name.
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