Home loan is an essential for people planning to purchase a residential property. Therefore, there’s no escape from the same for potential home buyers, and hence they shouldn’t be avoiding the necessity. Instead, they should do their own research and acquire the know how of things to do when taking a home loan, and about the stamp duty and registration charges that would be levied.
Accordingly, people are quite aware about home loans and how does that work, but getting approved for one is just one part of the process of buying a home. The other part is to know the exact stamp duty and property registration charges that would be levied, to ensure a better, more practical financial planning.
What is stamp duty?
Stamp duty is a tax applied on certain documents for their legal recognition. In India, stamp duty is levied on the transfer or sale of property, shares, and movable and immovable assets.
How to Calculate Stamp Duty?
Stamp duty is calculated on the market value or agreement value of the property, whichever is higher. To calculate the market value, authorities refer to the circle value of the property. You can utilise the online stamp duty calculator to get a fair idea.
What is registration charges?
Registration charge is paid over stamp duty. You must pay this to transfer and register the property or asset under you name. It amounts to 1% of the value of the property or agreement, whichever is higher. The maximum amount is Rs. 30,000. That said, the registration charges vary from one state to another.