Buying a house is definitely a matter to feel excited, but at the same time, there are so many other things to consider before saying a “yes” to the deal. The procedures involved in the plan may convert your excitement to a headache if you are not well-informed about the entire practice. Payment of the stamp duty is the boilerplate to get the property legally registered and you must do your homework before heading towards the Indian real estate market.
What is a stamp duty?
Stamp duty is a kind of a tax paid to the state government that is necessary to get the property registered in the name of the buyer. It is an evidence of the ownership of the property that is also used as a proof to track changes in the ownership of the concerned estate. Therefore, payment of the stamp duty to the government becomes essential before finalizing the transaction.
Facts to Know
- The rates of the stamp duty vary from state to state. The value of the tax also depends on upon the age of the property. Even market price of the property determines the amount of stamp duty to be paid. Therefore, it is always a better idea to enquire completely about the registration process before finalizing any real estate deal.
- The stamp duty varies from state to state and is consummated around 5% to 8% of the value of the property.
- Most of the states give a rebate of around 2% if the buyer is a woman. A stamp duty rate for joint properties (where one party is a man and the other is a woman) varies from one state to another.
- It is a legal tax that works as an evidence for the purchase and sale of the house.
- The stamp duty is levied by the Central government on particular instruments and fixes the rates on these instruments accordingly.
- The buyer is entitled to pay the stamp duty. In case of the property exchange, both the parties must share stamp duty equally.
- Stamp duty must be paid either before, on the day or next day after finalizing the deal, failing which the interested party may have to pay a penalty of 2% every month on the amount that is payable till the time it is delayed. Penalty charges may go beyond 2% and can reach to the maximum level of 200% i.e., particularly very high.
For registering the property, it is imperative to buy stamp papers that are used for the process. These are supposed to be purchased on the buyer’s name, however exceptional cases may exists. If in case, the stamp paper is not purchased in the name of any of the parties involved, document will become null and void within the period of six months.
Growth of online procedures is evident, so government of many states has come up these days with an online stamp duty payment method. The method has not only made the process simpler but also helps to save time. Considering online payment of the stamp duty is definitely a viable option, and must be the topmost choice of the buyer party, if available.