Stamp duty and registration charges are two additional expenses involved in purchasing a property in India. Stamp duty is a tax imposed by the state government on certain legal documents such as sale deeds, conveyance deeds, gift deeds, and mortgage deeds. It is calculated based on the agreement value of the property or ready reckoner rate, whichever is higher. The rate of stamp duty varies from state to state and can range from 5% to 7% of the total market value of the property. Stamp duty is used to validate the registration agreement and is payable at the time of registration.
Registration charges, on the other hand, are the cost levied by the state government to record property details. The registration fee is applicable in the case of properties that cost over Rs. 30,000 and is usually calculated at 1% of the agreement value or the market value, whichever is lower. The registration process involves recording the execution of the document and transferring ownership to the right owner.
It is important to note that stamp duty and registration charges can add up to 7% to 10% of the total market value of the property or more. These charges often tend to vary from one municipal area to another depending on the applicable local rates. Therefore, it is essential to have a clear idea of the fee before purchasing a property.
