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What Is Stamp Duty?

Stamp Duty basically is nothing but a type of tax collected by the government under its jurisdiction for a transaction of property. Stamp duty is, therefore, a tax which is evidence, as it were, of any purchase or sale of a property between two or more parties. Stamp papers, which have to bought either in the name of the seller or buyer is valid for 6 months, provided the stamp duty is paid without any delay.

Stamp duty is collected on the basis of property value at the time of registration. Stamp duty’s amount varies from state to state and also property type—old or new. Since it adds up to the property cost, it’s better to have a fair idea before you finalize your property deal.
Stamp duty is a legal tax payable in full and acts as an evidence for any sale or purchase of a property. The levy of stamp duty is a state subject and thus the rates of stamp duty vary from state to state. The Center levies stamp duty on specified instruments and also fixes the rates for these instruments.

It is usually paid by the buyer with regardless to agreement and in case of property exchange, both seller and the buyer has to share the stamp duty equally.


What is the penalty charge?

Any delay in duty payment will pull in 2% per month to the maximum of 200% of the deficit amount of stamp duty. Stamp papers are to be purchased in the name of either of the parties, i.e, seller or buyer involved in the agreement, failing which will disable the stamp paper. It is said to be valid for six months from the date of purchase, only if the duty is paid on time.


Documents which require Stamp Duty –

Some of the documents which require stamp duty are listed below:

  1. Transfer instruments
  2. Deed of partition
  3. Reconveyance of mortgaged property
  4. Mortgage deed
  5. Certificates of sale
  6. Gift deed
  7. Exchange deed
  8. Tenancy agreement
  9. Power of attorneys
  10. License agreement
  11. Lease deeds


Stamp Duty Rates –

Stamp duty rates in various states is listed in the table below:

Stamp duty on non-residential properties whether in a co-operative society or not is at a rate of 5% of the market value. Stamp duty on residential flats in a housing society and building covered under Article 25(d) of Schedule of the Bombay Stamp Act, 1958 attracts concessional rates depending upon its market value as follows:

       1. for up to Rs. 1,00,000 stamp duty is nil.
       2. between Rs. 1,00,001 to Rs, 2,50,000 it is 0.5% of the value.
       3. between Rs. 2,50,001 to Rs. 5,00,000 Stamp duty is Rs. 1,250 +3% of the value above Rs. 2,50,000.
       4. Above Rs. 5,00,000 it is Rs. 8,750 + 5% of the value above Rs. 5,00,000.