Property ownership is not determined by physical possession alone. A clear title in your name must be indicated in all essential documents and legal papers too. As per Section 3 of the Indian Stamp Duty Act, 1899, a buyer must pay stamp duty charges and carry out the registration process to legally acquire a property.
If you are looking for a house for sale in Bangalore, you can consider properties such as Provident Park Square and VBHC Palmhaven. This article helps you understand some key factors regarding stamp duty charges.
Stamp Duty Rates, Payment Frequency & Penalty
The stamp duty rate is a one-time fee ranging from four to ten per cent and varies from state to state. If a buyer fails to pay this charge, the outstanding amount will have to be paid with a penalty of two per cent per month on the outstanding amount. The penalty can be as high as two hundred per cent of the original liability.
Lower Rates for Women
Several states charge a flat stamp duty rate if the property is registered in a woman’s name. This encourages more property ownership among women. For example, the stamp duty rate in Delhi stands at six per cent. However, women home buyers pay four per cent of the sale deed value as stamp duty.
Additional Read: Tips for First-Time Home Buyers
Stamp Duty on the Purchase of Apartments
Stamp duty charges are paid based on the individual share of a property. For example, if a housing project is built on 40,000 square feet of land and units of similar sizes are sold to 8 people, each one has to pay a stamp duty fee for 5,000 square feet.
Stamp Duty on a Home Loan Agreement
If you avail a home loan to purchase a house property, you must pay stamp duty for it. You are required to deposit the property documents with the bank or financial institution. Additionally, you must submit an undertaking that you are offering these papers at your free will to avail the home loan.
This undertaking, also known as the memorandum of deposit of title deed is registered and the financial institution charges 0.1 to 0.2 per cent of the home loan amount as the stamp duty.
Home Loan Eligibility for Low-Income Groups
From 2015 onward, banks have been directed by the Reserve Bank of India to include registration charges and stamp duty to calculate a home-buyer’s loan eligibility on property cost up to Rs. 10 lakh. This move is aimed to promote economically weaker sections and low-income groups.
Online Stamp Duty Payments
Many states like Maharashtra have initiated online processes to simplify property registration and stamp duty payments. Some states have also lowered stamp duty charges to encourage more home buyers to register their properties.
Stamp duty is regulated under a central act – The Indian Stamp Duty Act, 1889. However, states have a constitutional right to their own set of rules in this regard and make changes to the act. For example, Maharashtra abides by the Bombay Stamp Act, 1958.
Bangalore is an excellent destination which attracts students and professionals in search of educational and career prospects. If you are looking for the best property in Bangalore, the city offers sprawling townships such as Provident Park Square and VBHC Palmhaven keeping elevated lifestyles and conveniences of home buyers in mind.
If you need financial assistance to purchase the house of your dreams, you can avail a home loan from Bajaj Finserv Homes & Loans that offers home loans up to Rs. 3.5 crores on easy EMIs.