If you are intending to buy a property in Mumbai, you must know the role of stamp duty and registration charges in the total cost of your property.
What are the stamp duty and registration charges?
Stamp duty is a fee levied by the state government on the documents required to register a property. Under Section 3 of the Indian Stamp Act 1899, it is mandatory to pay stamp duty while the registration of a property. In addition to this, the concerned state government levies registration charge, which is a percentage of the total value or the registered value of the property.
Additional Read: What is a Stamp Duty? How to Calculate Stamp Duty Online?
Stamp duty and registration charges in Mumbai 2020
These charges remain one of the major sources of revenue for the Maharashtra Government. The levies have to be paid fully and any delays account for penalties on the part of the buyer.
To fuel the real estate market in Mumbai, the Maharashtra Government has announced a reduction in the stamp duty on property registration in Mumbai by three per cent.
An overview of stamp duty and registration charges in Mumbai
|Area||Stamp Duty rate till 31st December 2020||Stamp Duty rate from January 2021 to March 2021||Registration charges|
|Within the limits of Municipal Council/Panchayat/Cantonment of any area within MMRDA||2% of the market value||3% of the market value||1% of the market value|
Additional Read: How to do Registration of a New House?
Payment of stamp duty and registration charges
These charges can be paid through either of the following ways:
This method requires the presence of an authorized franking agent who applies a stamp to your property documents, signifying that the duty has been paid. Most banks offer franking agent services. The franking charge is deducted from the total amount of stamp duty to be paid by you.
2. Physical Stamp Paper:
Stamp papers are the most common way of paying stamp duty. It can be bought from an authorized seller. The details of property registration or agreement are written on this paper and are verified and signed by the executant. However, this process takes time and hence, is not a convenient process.
To simplify the process, the Department of Registration and Stamps has introduced the concept of e-stamping. This can be done by visiting the Government Receipt Accounting System website. On the portal, you will be required to fill various details regarding the property and its area. After filling the details, you will be redirected to a payment gateway where you can choose between NEFT or an RTGS. Choose your bank and complete the payment. This process is fast and convenient.
Now that you know about the registration charges, you are set to step forth with your property deal.
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