Borrowers purchasing a new property must pay stamp duty charges on all property transactions under Section 3 of the Indian Stamp Act, 1899. Under the same section, the borrowers are also required to pay registration charges. The government uses these charges to authenticate the property purchase as well as maintain a record of all the property-related transactions.  

The stamp duty is paid to the state government and is charged as a percentage of the total value of the property being purchased. Since the stamp duty is calculated as a percentage of the total value of the property, it often turns out to be a huge amount and therefore, borrowers are advised to use a stamp duty calculator to figure out how much stamp duty they will have to pay on property purchase and prepare for this expense in advance. Stamp duty is paid to the state government and is decided by the state government. This the reason why stamp duty varies from state to state. The stamp duty charges also depend on the price of the property but in general, the stamp duty varies between 3% and 5%.

Several different factors affect stamp duty and registration charges on properties in India, Let us now look at the factors that affect stamp duty and charges in India. 

The Age of the Property Being Purchased

The stamp duty is calculated on the total value of a property. Since old properties tend to be cheaper, the stamp duty charged on these properties is also low.

Age and Gender of the Owner 

All lenders offer a rebate on the stamp duty depending on the age and gender of the owner. In general, women and senior citizens are required to pay a lower stamp duty than male owners.

 Location of the Property and the Amenities Present 

Properties located in a central location and having all amenities tend to be always priced higher than properties located on the outskirts or properties that are old. Therefore, new properties attract higher stamp duty than properties located on the outskirts. 

Purpose of the Property 

Lastly, the stamp duty also varies based on the use of the property. Properties used for commercial purposes need a lot of amenities and are also priced higher. Therefore, these properties attract higher stamp duty than  residential properties.

If you are planning to buy a property any time soon, use a stamp duty calculator to work out the stamp duty you will have to pay on the property. Some buyers see stamp duty as an unnecessary expense. However, one must never skip paying this fee as in case of a legal issue, this stamp duty and the registration certificate serve as proof of transaction and therefore, hold a lot of weight. Calculate stamp duty in advance and if you think it’s turning out to be too much, simply add the stamp duty value to your home loan amount. This will make it easier for you to afford the stamp duty and registration charges.