Stamp Duty is the statutory charge levied by the state government on your property documents during the sale or transfer of the property.
It is levied across India as per rates ﬁxed by the state government.
Possession of a property is the physical transfer of the property and is not enough. You also ought to have legal possession. At the time of registration, you'll even have to pay a stamp duty that is a government tax levied on property transactions.
Buying a home is one of the largest money transaction that you will do in your life. It's an awesome experience, both financially and emotionally. When shopping for a house, we need to spot the property, arrange for down payment, apply for loan, sign the sale agreement, etc., one among the necessary step & the ultimate step while shopping for a home is the possession and registration of your property. When the possession of the property is being transferred to you, it's your responsibility to get it registered in your name.
Possession is the physical transfer of the property, however it's not enough. You furthermore may need to have legal proof of possession. For this you'll have to get the property registered in your name within the native municipal records, with the vendor documenting that the property is being transferred to you. At the time of registration, you'll even have to pay a stamp duty that is a government tax levied on property transactions. In this article let’s try and know what is stamp duty, why is it essential to pay stamp duty and lots of additional aspects of stamp duty.
Stamp duty is collected on the basis of property price at the time of registration. Stamp duty’s quantity varies from state to state and additionally on property type— old or new. Since it adds up to the property value, it’s better to have a good idea of stamp duty before you finalise your property deal.
Stamp duty is a legal tax payable fully and acts as a proof for any sale or purchase of a property. The levy of stamp duty could be a state subject and therefore the rates of stamp duty vary from state to state. The Central government levies stamp duty on given instruments and also fixes the rates for these instruments.
It is typically paid by the buyer with regardless to agreement and just in case of property exchange, both vendor and also the vendee needs to share the stamp duty equally.
It is a tax, like Sales Tax, collected by the govt. stamp duty is due under Section 3 of the Indian Stamp Act, 1899. Stamp duty should be paid fully and on time. If there's a delay in payment of stamp duty, it attracts penalty. A full stamp duty paid document is identified as a legally acceptable document and has evidentiary worth and is admitted as proof in courts. Document not properly stamped, isn't admitted as proof by the court.
It is due for payment before execution of the document or on the day of execution of document or on succeeding working day of execution of such a document. Execution of the document means putting signature on the instrument by all the parties to the document.
Any delay in duty payment can result in 2% per month to the max of 200% of the shortfall in amount of stamp duty. Stamp papers should be purchased in the name of either of the parties to the document , i.e, vendor or vendee related to the agreement, failing which will make the stamp paper disabled.
The purchaser/transferee has to pay stamp duty unless there is an agreement to the contrary. In case of exchange of properties, both parties have to bear stamp duty equally.