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Stamp duty on property transactions
 
Overview
Stamp duty is a form of tax that is levied on documents. It is a percentage paid on the purchase of a home or non-residential property.
For a document to be considered proper and legal, the stamp duty on it must have been paid. If the stamp duty is not paid, then the document will not have any evidentiary value and it cannot be admitted as evidence in courts.
Stamp duty is calculated on the value of property. To reduce stamp duty, some people declare or register the property at a much lower value than the actual transaction value. This under valuation leads a loss of revenue for the State.
Calculation of Stamp Duty
The calculation of stamp duty depends on the following three factors:

1. What is the price of the property?
2. Which state is the property located?
3. Is it a residential or a commercial property?		 Stamp Duty Cash
For example, in Mumbai, the following rates will be applicable:

1. upto Rs.1.00 Lakh - Nil.
2. Rs.1.00 Lakh to Rs.2.5 Lakhs - 0.5 % of Value.
3. Rs.2.5 Lakhs to Rs.5.00 Lakhs - Rs.1,250/- + 3% of value above Rs.2.5 Lakhs.
4. Rs.5.00 Lakhs to Rs.10.00 Lakhs - Rs.8,750/- + 6% of value above Rs.5.00 Lakhs.
5. Value exceeding Rs.10.00 Lakhs - Rs.38.750/- plus 8% of value above Rs.10.00 Lakhs.
So, if the value of a property in Mumbai is Rs. 3 lakhs, the the stam duty on it will be Rs 2,750.
Stamp duty, like sales tax or income tax, is a tax collected by the Government. With respect to property, stamp duty needs to be paid for any sale or transfer of property. The stamp duty related to property is a state subject and the rates for the duty vary from state to stage. It is important to pay the stamp duty in full and on time to avoid penalty.
Stamp Duty Calculator
Here is a link to the stamp duty calculator which you can use to calculate stamp duty payable for any state in India.

Author: Editor
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