Stamp duty is set by each state and depends on the document, the property and sometimes the buyer. It must be paid for a document to be valid evidence; rates change, so check the current state schedule.
Example
Working it out
A buyer in Mumbai buys a flat for ₹1.5 crore, while the government’s ready reckoner value is ₹1.6 crore. Duty is charged on the higher figure. At an illustrative 6% (not a rate for any particular state), that is ₹9,60,000 rather than ₹9,00,000. Check the current rate and any concessions on the state registration department’s website.
Figures are illustrative, not market rates.
Across India
- The government value goes by different names: ready reckoner rate (Maharashtra), guidance value (Karnataka), circle rate (Delhi, Uttar Pradesh).
- Several states charge women buyers a lower rate or give a concession on jointly held property.
- Maharashtra adds a metro cess in some urban areas on top of the base stamp duty.
Questions about Stamp duty
What happens if a document is not properly stamped?
Under section 35 of the Indian Stamp Act, 1899 (and matching state laws), an instrument that is not duly stamped cannot be admitted in evidence or acted upon until the deficit duty and a penalty are paid. Under-stamping also invites recovery notices from the stamp office.
Is stamp duty charged on the agreement value or the government rate?
Generally on the higher of the two: the consideration in the document or the government-set market value for that area, such as the ready reckoner or circle rate. The exact rule depends on the state’s stamp law.
Who pays stamp duty, buyer or seller?
In a sale the buyer usually pays, unless the parties agree otherwise in writing. In a rental agreement the parties agree who pays; it is often the tenant or split. The payer should be stated in the agreement to avoid disputes.
Sources
Reviewed