Important Factors to Calculate Stamp Duty and Registration Charges

How to Calculate Registration Charges & Stamp Duty On Property in Hyderabad

Important Points to Calculate Stamp duty and Registration Charges
09:57 AM 30 May

The property is transferred from one person to another legally only when it is registered at the Sub-Registrar Office by paying stamp duty and registration charges.

For example, If you want to buy an apartment for Rs 1 cr from Mr X. You pay the transaction value to Mr X, and then he executes a sale deed.

Then, you must register the sale deed by paying stamp duty and registration charges at the Sub-Registrar’s Office.

Once you pay the stamp duty and registration charges, the transaction is recorded in the Sub-Registrar Office, and you will become the legal owner of the property.

What is Stamp Duty?

Stamp Duty is collected whenever there is a transfer of assets or property from one person to another.

It is collected by the State government and is governed under the Indian Stamp Act 1899.

As the State government collects it, the stamp duty varies from one state to another.

In Hyderabad, the stamp duty includes stamp duty, registration charge/fee plus transfer duty and is a calculated on the market value of the property.

Why do You Have to Pay Stamp Duty?

It is mandatory to register the sale or transfer of property, and at the time of recording the transfer, you must pay the stamp duty and registration charges.

The stamp duty paid and the registered document is a legal document that proves that you are the owner of the property and is accepted as evidence in case of property disputes.

Also, in case you lose the original sale deed or transfer deed, you can get a duplicate transfer deed from the Sub-Registrar’s office that shows that you are the owner of the property.

When do You Have to Pay Stamp Duty and Registration Charges?

You must pay stamp duty and registration charges at the time of execution of a transfer agreement such as sale deed between two parties.

Some examples of transfer agreements (mainly concerning property) that require payment of stamp duty and registration charges are as follows:

> Sale Deed

> Gift Deed

> Exchange Deed

> Partition Deed

> Lease Deed where the period of lease is more than 12 months

> Transfer Deed/ Right Transfer Document

> Mortgage Deed

> Power of Attorney (General or Special)

How do You Calculate the Stamp Duty and Registration Charges?

The stamp duty calculator

(http://registration.telangana.gov.in/TGMV_Client/index.jsp) is used to calculate the stamp duty and registration charges.

The stamp duty varies from one state to another.

To calculate the stamp duty and registration charges manually, you can use the formula given below:

Stamp Duty is 4% of property value,

Where property value is (Higher of Ready Reckoner Rate or Actual Transaction Value)

Ready Reckoner Rate is the minimum value of the property that is fixed by the state government. And, stamp duty is calculated as the higher of ready reckoner rate or actual transaction value.

Registration Charges is 0.5% of the property value.

And, the transfer duty is 1.5% of the property value.

Let’s look at some examples below:

Case 1: If the  Ready Reckoner Rate is Rs 1 cr and the Actual Transaction Value is Rs 1.5 cr, then stamp duty @4% is calculated as

Stamp Duty = 4% of (Higher of  Ready Reckoner Rate or Actual Transaction Value) i.e. 4% of (Higher of Rs 1 cr or Rs 1.5 cr) = 0.04 * 1.5 cr = Rs 6 lakhs

Registration charge @0.5% of (Higher of  Ready Reckoner Rate or Actual Transaction Value) i.e. 0.5% of (Higher of Rs 1 cr or Rs 1.5 cr) =0.005 * 1.5 cr = Rs 75,000

Transfer duty @1.5% of (Higher of  Ready Reckoner Rate or Actual Transaction Value) i.e. 1.5% of (Higher of Rs 1 cr or Rs 1.5 cr) =0.015 * 1.5 cr = Rs 2,25,000

Therefore the total amount that the buyer needs to pay =

Actual Transaction Value = Rs 1.5 cr

Stamp Duty = Rs 6 lakhs

Registration Charge = Rs 75,000

Transfer Duty = Rs 2,25,000

Total Amount Payable = 1.5 cr + 6 lakhs + 75000 + 2,25,000 = Rs 1.59 cr

Case 2: If the Ready Reckoner Rate is Rs 1 cr and the Actual Transaction Value is Rs 70 lakhs, then stamp duty @4% is calculated as

Stamp Duty = 4% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 4% (Higher of Rs 1 cr or Rs 70 lakhs) = 0.04 * 1 cr = Rs 4 lakhs

Registration charge @0.5% of (Higher of  Ready Reckoner Rate or Actual Transaction Value) i.e. 0.5% of (Higher of Rs 1 cr or Rs 70 lakhs) =0.005 * 1 cr = Rs 50,000

Transfer duty @1.5% of (Higher of  Ready Reckoner Rate or Actual Transaction Value) i.e. 1.5% of (Higher of Rs 1 cr or Rs 70 lakhs) =0.015 * 1 cr = Rs 1,50,000

Therefore the total amount that the buyer needs to pay =

Actual Transaction Value = Rs 1 cr

Stamp Duty = Rs 4 lakhs

Registration Charges = Rs 50,000

Transfer Duty = Rs 1,50,000

Total Amount Payable = 1.5 cr + 4 lakhs + 50,000 + 1,50,000 = Rs 1.56 cr.

Important Factors that Influence the Calculation of the Stamp Duty Charges

Stamp duty varies based on the following factors:

Location of the property:  A property located in an urban area attracts more stamp duty compared to one found in a rural area.

Type of property: Lower stamp duty is charged for a residential property (flat/apartment) compared to a commercial property(industries/ commercial complex/ hotels).

Age of the property: A new property attracts more stamp duty than an older property.

Gender of the buyer: A female buyer gets a rebate on the stamp duty.

Age of the buyer: A senior citizen also gets a rebate on the stamp duty.

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