Investing in a house is a major decision that involves a lot of factors to take into consideration. You need to first zero down on the locality, the surrounding amenities, apply for a home loan, make the upfront payment and sign the agreement. Then you get possession once the property is ready. However, getting your house physically in your name does not legalise the matter. Your name needs to be registered as the owner of the property in Government records as well. This is where Stamp Duty comes in.
Stamp Duty is a tax that is levied by the Government on any asset transaction that takes place, especially that on property. It is a legal document that acts as evidence that a transaction of a property has taken place between two parties. It is a way of boosting government revenues for carrying out government activities. It is payable by either the buyer or the seller under Section 3 of the Indian Stamp Act of 1899. In case you delay in paying the tax, you will have to pay a penalty for the same.
A Stamp Duty is to be paid before the signing of the legal agreement, on the day or latest by the next day, failing which a penalty is levied. In most cases, it is the buyer who has to pay the stamp duty charges. However, if it is a case of property exchange, both the parties, the buyer and the seller, have to bear the burden. A Stamp Duty is only approved when you sign by cancelling the stamp and writing your name or initials across it. This is to ensure that the stamp is not used for any other instrument or document and the sign is visible on the face of the stamp.
The rate of stamp duty varies from state to state.
When a flat or property is transferred by a nominee to legal heirs, the instrument or document needs to be stamped according to the market value. There are a number of parameters that are taken into consideration while determining Stamp Duty on any property. For example, in some states the stamp duty and registration charges are calculated based on the total area of construction for individual homes and built up area when it comes to flats. The following are certain things to understand in order to calculate Stamp Duty.
If you are a prospective buyer looking out for a house, the Stamp Duty charge is one of the things you should take into account which makes your budget. So, even before you get ready for taking possession of your property, check the Stamp Duty calculator by authentic online financial institutions like PCHF to have a fair idea about how much you need to keep aside for the same.
Stamp duty is one of the most important things to keep in mind while having a property transferred in your name. It is a legal document with the government that would have your name registered as the owner of the property. Hence, it is essential to pay Stamp Duty and Registration fees on time, to ensure that you do not end up spending on penalty charges.
[Also Read: Home To Apply For Home Loan Online ]