Mumbaikar’s it’s your turn now. Be aware of the new regulation implemented…
Before digging into stamp duty charges of Mumbai lets know what is stamp duty and its implementation.
Stamp duty is one of the biggest forms of revenue collected by the state government. The Stamp Duty is not fixed and it varies from state to state as per the rules and regulation of the Government. Increasing Stamp Duty has brought bitterness among the buyers. Under section 3 of the Indian Stamp Act, 1899 stamp duty charges are collected to authenticate the sale agreement between buyer and seller. It is advisable to understand Stamp duty of the state where you are planning to invest. The stamp duty is dependent on the market value or present agreement value. Some States give a rebate to the female buyers to encourage women empowerment. Maharashtra government imposes same stamp duty rates for male and female buyers irrespective of the gender.
Commercial and residential properties attract the stamp duty. Even the leasehold or freehold properties attract the stamp duty charges. Non-payment of stamp duty charges attracts penalty from the Government.
If you pay the inadequate amount on stamp duty to make it forecast as an under-valued property in the agreement, it shall be termed as the tax evasion and will attract heavy penalty as punishment since it pushes the government to grieve revenue loss. According to state government rule, it attracts 20% of actual stamp duty charges and even can lead to imprisonment for a particular time period.
Stamp Duty Calculation & Payment Modes
In this digital era, there are loads of property and real estate based websites that lets you calculate the stamp duty value of your property. It gives you an exact estimation of the charges that you need to pay.
Stamp duty charges can be paid through various modes
- Online mode: Stamp duty charges can be paid online through RTGS/NEFT after paying the summary and acknowledgement can be downloaded.
- Stamp paper method: Traditional method of using stamp paper can be used to make the agreement and after 4 months register with the sub-register office.
- Franking: he process involves an agreement printed on a paper and is submitted to any authorized bank. The document is processed via a franking machine.
Factors that come into picture while calculating the stamp duty charges
- Stamp duty varies for the residential property and commercial property
- Property type like individual home or flats decides the stamp duty
- Age of the buyer
- Gender of the buyer/investor
- Location of the property whether it is the rural, suburban, or metropolitan area
- State of the property whether old or new
Total cost of the property = Saleable value of the property + Stamp duty + Registration fee
The stamp charges in Maharashtra was 5% in the financial year 2017-18. But all of sudden on November 27th the Government passed the bill to increase the stamp duty charges by 1%. Totally 6% of stamp duty charges will have to be borne by the homebuyers in Maharashtra and additional 30,000 rupees as registration charges shall be paid.
Increasing Stamp Duty charges is not welcoming the decision by the investors, buyers, nor the developers of real estate community. The impact of raising the stamp duty charges is adversely felt on the affordable housing projects as it increases the overall cost of realty transactions. Hence the entire lifecycle of the property selling and buying is affected due to this decision. Sales and marketing are affected severely causing the piling of unsold units in the state. When buying a home plan and make the best decision to avoid financial burden. Increasing Stamp Duty is a threat to the entire real estate market.
Buy a cost worthy and value for money property!!