What is Stamp Duty for Property Registration?

With the increasing progress of the youth of the country, the first investment option for most people is real estate.

For that, the registry of a property under one’s own name is mandatory. Transferring of ownership is not a child’s play. There are many complications in the process that have to be dealt effectively.

There are registration charges that the buyer is required to bear along with stamp duty.

What Is Stamp Duty?

In order to carry out the transferring of rights for a property, the government has prescribed a mandatory tax known as stamp duty.

Stamp duty is levied on leasehold and freehold properties as well as on any commercial or residential transactions for a property. The rate of this tax varies from one state to another, depending upon the legislation followed by a particular state.

Any document indicating the transfer of real estate or any other immovable property has the provision of stamp duty to be paid.

When various legal documents like conveyance deed, sale deed, and sale agreement are involved, stamp duty is collected. It is payable for any document that indicates the transferring of a liability or right created or when they are extended, extinguished or recorded. Once the payment of the stamp duty is done for a particular document, it becomes legal.

In the court of law, this document can also be used as evidence.

Time of Payment:

The payment of stamp duty has to be completed before the task is initiated or on the day the task has to be carried out.

Methods:

There are 3 methods by which the payment of stamp duty can be carried out:

Via Stamp Papers

A vendor who is authorized sells you the stamp paper and then the entire transaction can be typed or written on it. This is the oldest and a conventional method of paying stamp duty.

Electronic Stamping

E-stamping is done electronically via the SHCIL website. You can make the payment through Debit Cards, cheque, Credit Cards, demand drafts and internet banking. This prevents the use of counterfeit stamp papers and the overall process is easier.

Franking:

In this process, a franking agent indicates that you have paid stamp duty by putting a stamp on to your document. For franking the document by an adhesive stamp, a franking machine is used.

Things to Remember:

Some of the states charge differently for urban and rural areas.

In some states, women can avail discounts if the registry is under their name.

Transferring of ownership involves various complications in the process that have to be dealt effectively.

Therefore, to enhance your ease, it is always better to follow the rules stated by the government, especially when it comes to something as big as real estate or property.

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