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Home / Legal / Sale Agreement / What do you mean by stamp duty? How is it calculated?
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What do you mean by stamp duty? How is it calculated?

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0 2026-01-30T13:38:11+00:00

This is all about what is stamp duty,

  1. The government imposes stamp duty as a levy on all asset transactions, particularly those involving real estate. 

  2. It is a legal document that works as evidence that a transaction of a property has taken place between two parties. 

  3. It is a means of increasing government revenue so that government operations can be carried out. 

  4. According to Section 3 of the Indian Stamp Act of 1899, either the buyer or the seller is responsible for paying it. 

  5. You will be required to pay a penalty if you fail to pay the tax on time.

How is Stamp Duty Calculated?

The stamp duty rate differs between each state. When a property or flat is transferred by a nominee to beneficiaries, the document or instrument must be stamped based on the market value. 

Several factors are considered when calculating Stamp Duty on a property. In certain states, the stamp duty and registration fees are determined by the overall construction area for standalone houses and the built-up area for apartments. Here are some key points to consider for calculating Stamp Duty;

  1. The 'Guidance Value' or the lowest value at which the house, plot, or property must be registered, determined by the government, should be considered.

  2. The stamp duty and registration fees vary inversely with the property's market value.

  3. Stamp duty fees are influenced by the property's location, whether in an urban or rural area.

  4. Stamp duty and registration fees are also subject to central and state taxes.

I hope this helps!

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0 2020-09-16T18:27:11+00:00
When you want to buy a property, the government imposes a tax on the transfer of the property to your name. This tax is known as stamp tax or stamp duty. You pay the tax amount to the government and get a stamp on the documents. This document serves as the legal record for various types of transactions like the sale or transfer of a property. There are several factors that should be considered while calculating the stamp duty. It includes the market value or the agreement value (whichever is higher), type of property, age of the buyer, gender of the buyer and others. You can use one the many online stamp duty calculators available online or calculate it yourself by researching. Calculating Stamp Duty Online a. Enter the state of your property. b. Enter the total value of the property or market value. c. Some online calculators provide you the option of adding registration fee, addition of cess and surcharges to the total amount of the stamp duty. d. Click on the centre button and you will get a specific amount. Calculating Stamp Duty by Yourself a. Analyse the total market value of your property or the agreement value (whichever is higher) b. Depending on the location (city), your gender, age and other factors, the ratio would change. For example, you are buying a property in Pune for 1 Cr. Till 31st December 2020, the stamp duty is 3% (normally 6%). The stamp duty would be 3% of the agreement value i.e. 1 Cr or the total market value of your property (the government considers whichever has the higher value). So the stamp duty would be 3 lakhs on the property plus the registration charges. You can calculate the stamp duty for your property similarly!
1 2020-09-15T11:33:57+00:00
While buying a property in India, we always come across 'stamp duty charges'. So in simple terms, when you buy a property, the government levies a tax on the property. When the title and the property details are approved by the government, the officials will put a stamp mark on the documents which would mean that the property has been legally transferred to you. As the stamp duty charges are levied by the state government, the charges vary from state to state and in some cases, city to city. For example, the stamp duty charges in Mumbai is 5%, whereas, the stamp duty charges in Thane, Pune and PCMC is 6%. Despite being in the same state, there is a little difference on the stamp duty charges. (Due to the current pandemic, the Maharashtra government has reduced the stamp duty charges by 3% till December 31, 2020.) When it comes to 'how to calculate stamp duty charges', the calculation depends on various factors including the location of the property, gender of the owner, age of the owner, type of property, and so on. Generally, the stamp duty charges are between 1-7% in India. For example, in Delhi, the stamp duty charges are 4% if the owner is a woman and 6% if the owner is a man. In Mumbai, 4% of the total market or agreed value of the property for rural areas and 5% for areas that fall under Municipal zone. The stamp duty charge is calculated on the transaction value while buying the property. Although you've purchased the property at a lower rate than the prevalent circle rates, the stamp duty charges will be applied on the circle rate value of the property. On the other hand, if the transaction is valued higher than the circle rate value, the stamp duty charges will be charged on to the deal value and not at the circle rate value. For example, you bought a property with the agreement value of a property is Rs 50 lakhs. In this case, the stamp duty charges will be calculated on the higher value i.e. Rs. 50 lakhs and not 40 lakhs.

There are a few online stamp duty charges calculators available online. I recently came across the

Bajaj Finserv

and found it very helpful.

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