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Everything you Need to Know About Stamp Duty on Property

Purchasing a property is a task in itself. From research to making the final call on the best area, there are various factors that count for a successful purchase or a good investment per se. But the relay of tasks doesn’t stop there itself. You need legal evidence/legal proof to attest to as proof of purchase.  

As a smart buyer, you must be aware of the legal processes laid down by the government. To authenticate your property purchase, you need to pay stamp duty and registration charges. You should also keep in mind that the state government levies different charges on stamp duty as per their state policies and the property’s value. The value of the property is dependent on the location, type and age of the property. 

There is still a lot to learn about the in and outs of the real estate world, especially in terms of charges levied. But fret not, you can count on this article to know all about stamp duty on property. Follow on our blog to know more.

What is Stamp Duty?

Stamp duty is a government-imposed direct tax. It is due on all documented financial transactions under Section 3 of the Indian Stamp Act of 1899. Bills of exchange, letters of credit, promissory notes, letters of credit, and property transactions are all examples of Stamp Duty. A document on which stamp duty has been paid is legally permissible and can be presented in court as evidence. A person cannot become a legal owner of the property without first paying stamp duty. Stamp duty rates in India range from 4 % to 9 % of the property’s market value, which varies from one state to another.

When do you pay Stamp Duty on the property?

Stamp duty on the property is paid before the completion of the transaction. However, you can pay the stamp duty due on the next working day after the transaction is completed. Delays in paying stamp duty beyond this stipulated time frame will result in a penalty of 2% per month, with a maximum penalty of 200 %  of the remaining amount. It is advisable to pay the stamp duty in full and on time to avoid any penalty.

Where is Stamp Duty Applicable?

Stamp duty isn’t only paid when a house is sold. You must pay it when registering all types of conveyance (transferring property from one owner to another) transactions. Stamp duty is therefore payable when registering mortgage deeds, exchange deeds, gift deeds, lease deeds, Power of Attorney (PoA) agreements, agreements for sale, and sale deeds.

How charges on stamp duty on property get calculated

Stamp duty is levied by the state government, which is why stamp duty rates differ from state to state. Stamp duty on property is calculated using the ready reckoner rate/market value/circle rate or the consideration value, whichever is higher. The total amount involved in any agreed-upon purchase/sale transaction is referred to as consideration value. The minimum value at which a property should be registered is the guidance value, also known as the circle rate. Circle rates are set by a competent authority under the state government. The type of property, its location, and the year it was built are all factors that go into determining its value.

Can you avail concession on stamp duty?

Many states charge lower stamp duty to encourage women property ownership. For example, Delhi charges 4% on the sale deed value for women home buyers in contrast to the normal stamp duty rate of 6%. Haryana charges 5% stamp duty rates on female homeownership as compared to the normal rate of 7%.


As law-abiding citizens of India, you should adhere to the policies/regulations laid out by the government and contribute to the economic activities of our nation.

Residential and commercial property in New Delhi : Omaxe 

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