Buying your own home is often an expensive affair but proper financial planning and the right help can be of great help. When it comes to planning, many people often forget to consider expenses that are not directly related to buying the land or property itself. One such expense is the stamp duty and registration charges you have to pay while purchasing a property.
Let’s take a look at stamp duty and see how you can make paying it easier.
What is stamp duty?
Stamp duty is a form of tax that is levied on some documents. It has to be paid when you are transferring a property’s ownership. The respective state government levies this and hence, stamp duty varies from state to state. In general, it is between 5% and 12%.
Paying stamp duty has great importance in the completion of a property transfer. In most states, the property transfer is approved only when you have paid the stamp duty.
Given the importance, you must account for stamp duty while you do financial planning for your property purchase. A stamp duty calculator is a tool that can be of use here.
What is a stamp duty calculator?
A stamp duty calculator is a tool that will help you calculate the stamp duty you have to pay for your property purchase. You will have to input the property’s value and the state in which the land is situated and it will show the applicable stamp duty. It will be a percentage of the total value of the property, and it can differ in different states. Some states have gender-specific rates as well.
Is stamp duty included in housing loans?
This is a general confusion many new homebuyers have. Stamp duty is a form of tax, and it is not included in your home loan money. Rather, it has to be completely borne by you. At the same time, you can avail other loans, such as a personal loan, if you find it difficult to afford it. Either way, accounting for them in your financial plan is necessary.
Keep in mind that they offer you some tax benefits on stamp duty.
Tax benefits on stamp duty
The stamp duty and registration charges you have to pay when you buy a property are tax-deductible for up to Rs 1.5 lakh under section 80c of the income tax act, 1961.
How to pay stamp duty?
You can pay stamp duty both online and offline. The offline process involves buying stamp papers of the desired value from authorized sellers. The property registration and other agreements are written on this stamp paper.
Alternatively, you can visit the Stockholding Corporation of India Limited website, select the state you are in, fill out the necessary details and pay the stamp duty.
Paying stamp duty is an important part of property registration. Account for the same to make the process hassle-free.