Know the Stamp Duty Rate in Your City

If you are planning to buy a property, you need to be aware of the various costs involved in a property transaction. Besides the actual value of the property, you are also liable to pay a fee for registration and an additional fee known as Stamp Duty, which is calculated as a percentage of the total value of the property.

And while the registration fee is usually fixed at 1%, the stamp duty tax varies between 4% and 10% based on the city you reside in.

What is stamp duty?   

Stamp duty is a real estate tax levied during a property transaction. This tax is governed by Section 3 of the Indian Stamp Duty Act, 1899, and is calculated as a percentage of the total value of the property being transferred. This percentage varies from one state to another.

As an example, let us say you are living in a city where the stamp duty is 4%. If you purchase a property worth 50 lakhs, you will have to pay an additional 2 lakhs (4% of 50 lakhs) in duty charges as a part of the transaction.

Learn the stamp duty rate in your city   

Even today, most homebuyers are unaware of the registration fee and charges involved. Thanks to this, many who plan to purchase a property are not financially equipped to do so and must postpone their investment to gather enough funds. And in the intervening time, the price of the property continues to rise.

If you are planning to buy a home, it is important to learn the rates in your city. Here are the rates in some of India’s more popular cities.

Bangalore

In India’s IT capital, you are required to pay a stamp duty of 5.6% in urban areas and 5.65% in rural areas. And given that Bangalore is one of the largest metropolitan cities in India, this rate is relatively low.

Delhi NCR

Delhi has a rate of 5% while its neighbouring areas range between 5% and 7%. Gurgaon’s rate is at 6% in rural areas and goes up to 8% in urban areas, while Noida has recently hiked their rates from 5% to 7%.

Ahmedabad

Considered to be one of India’s most business-friendly cities, Ahmedabad charges a rate of 4.9%. This is lower than the stamp duty of other Tier 1 cities in India.

Chennai

A property in Chennai bears a higher stamp duty than most other metropolitan cities, at the rate of 7% of the actual value.

Kolkata

The capital of West Bengal has a stamp duty ranging from 5% to 7%. However, the government has recently proposed to reduce the stamp duty to a mere 2%.

This move is to encourage buyers to register their properties as most buyers skip the registration process to avoid stamp duty charges.

Hyderabad

Hyderabad is one of India’s one of the fastest growing cities in Hyderabad, especially in the IT sector. Buying a property here will result in a stamp duty of 7.5%.

Mumbai and Pune

All property transactions across Mumbai and Pune bear a  rate of 6%. However, if you plan to buy property in a premium location in Mumbai, or if the purchase involves the acquiring of luxurious facilities, you will be required to pay an additional 50% of the total amount.

Do your research

That was a list of stamp duty taxes in various countries across India. But remember, it isn’t the only hidden cost involved in the purchase of a property. Do your research and learn everything you can before you decide to go ahead and buy a home.

With all the right information at your disposal, you are sure to make a successful and satisfying transaction.