3 min read
25 May 2021

When it comes to buying a home in modern India, there are many additional charges and fees involved that you should be aware of. These are in addition to the cost of the property and some of these have a role to play in legalising your ownership of the same. For instance, you are required to pay stamp duty when purchasing a new home in India and the amount you pay varies by state.

As this is a requirement for homeownership, it is important that you know all there is to it to ensure that your transition to a homeowner is smooth and seamless. To gain more insight on what is stamp duty and how to use a Stamp Duty Calculator, read on.

What is stamp duty?

Stamp duty is a tax levied by state governments, under Section 3 of the Indian Stamp Act of 1899, during property transactions. During the sale, this charge is placed on the property documents. The payment of this tax validates the registration of the said property and this serves as legal proof of ownership. The stamp duty amount is based on 4 major factors.

Market value

As the stamp duty is essentially a percentage of the value of the property, the current market value of the home you are buying is extremely important. For instance, for a property worth Rs. 2 crore in Maharashtra, the stamp duty amounts to Rs. 7.7 lakh. Similarly, for a property in Maharashtra worth Rs. 5 crore, the applicable stamp duty is Rs. 19.4 lakh.

Location

Location is another important factor that contributes to the stamp duty charged as each state in India has its own applicable rate. For instance, the stamp duty rate in Bangalore is 5%, whereas in Chennai it is 7%. This means that for a similarly valued property in both states, the stamp duty payable in Chennai is higher. Further, rates in rural regions may differ from those in urban regions.

Type and status of the property

Besides its market value and location, the type and status of the property also have a role to play. The status means whether the property is old or new, and based on this classification there may be special concessions to the rate. Further, the type of property is determined by whether it is a flat, an independent house, and so on. In terms of usage, properties are segregated as residential or commercial and this also affects the stamp duty charged.

Gender and age of the homebuyer

The stamp duty applicable to you is also dependent on gender and age. Female homebuyers can enjoy special stamp duty rate concessions. This is also a benefit extended to senior citizen homebuyers and can prove quite useful when purchasing a high-value property.

Who has to pay the stamp duty charges?

Generally, stamp duty must be paid by the homebuyer. This is because it serves as a proof of ownership, while also providing tax deductions under the Income Tax Act. However, in some cases, the stamp duty can be paid by both seller and buyer based on an agreement. In such instances, the amount paid by each party differs from case to case.

How to use a stamp duty calculator?

A stamp duty calculator is a tool that is fairly easy to use and simplifies the process of knowing the stamp duty amount when buying a home. It is important to know how to use a stamp duty calculator as this can prepare you for the upcoming payment and give you much-needed time to plan for it.

To use it, follow these 3 simple steps.
Step 1: Select the state in which you’re looking to buy property
Step 2: Enter the current property value accurately
Step 3: View the results mentioning the stamp duty amount and the rate at which it was calculated

What are the advantages of using a stamp duty calculator?

Stamp duty charges can run into lakhs of rupees and so, knowing the amount beforehand gives you ample time to arrange for the required funding. This is important as generally stamp duty costs aren’t covered by home loans. What’s more, the calculator allows you to view accurate figures in seconds, leaving no room for errors that are common during manual calculations. Moreover, the amount you pay qualifies for a tax deduction under Section 80C of the IT Act. So, a stamp duty calculator helps you plan your tax payment strategy well in advance.

The stamp duty on your property is an additional charge that you must account for, especially if you’re planning on purchasing a home in a metro or a popular locale. While you prepare to pay this percentage from your pocket, you can arrange funds for the entire property purchase by availing the Bajaj Finserv Home Loan

Here, you can get up to Rs. 15 Crore* at nominal home loan interest rates and at over a flexible tenor of up to 40 years. What’s more, you also get access to the value-added Property Dossier feature, which serves as a financial and legal guide to being a homeowner. In addition to that, you can part-prepay or foreclose this home loan at no additional costs, if you have taken a floating interest rate loan. To enjoy these home loan benefits and more, check your pre-approved offer and get expedited approval on a customised deal.

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