If you have ever purchased a house or intend to buy one soon, you must be familiar with the concept of Stamp Duty. Defined under Section 3 of the Indian Stamp Act, 1899, Stamp Duty is a tax levied on the sale of a property or transfer of a property’s ownership.
How Is Stamp Duty Determined?
The quantum of Stamp Duty that you are required to pay depends on several factors, including:
- The state wherein you are buying the property
- The state wherein you are acquiring the ownership of the property
- The value of the property as stated in the Agreement of Sale
- Your Age
- Your Gender
Although the percentage of Stamp Duty varies from one Indian state to another, it typically falls within 4 to 7 per cent of the value of the housing property being purchased. Since Stamp Duty is a mandatory charge that accompanies the legal purchase of a property, it has a substantial impact on the overall cost of the property for you. Therefore, you must acquaint yourself with the prevailing Stamp Duty rates in the state you are buying a property in.
Stamp Duty in Maharashtra
The rates of Stamp Duty In Maharashtra are governed by the Maharashtra Stamp Act, 1958, and changed from time to time by the Government of Maharashtra. If you are looking to buy a property in the state, the Stamp Duty you shall have to pay will depend on the value of the property as well as the type of area where the property is located, that is, urban or rural.
The quantum of the Stamp Duty payable in Maharashtra includes the Stamp Duty as per the applicable rates and an additional cess amounting to 1 per cent of the value of the property. Furthermore, the purchase of properties in Nagpur attracts another cess that is 0.5 per cent of the property’s value.
Stamp Duty in Maharashtra – Recent Trends
In April 2020, the Government of Maharashtra announced a reduction in the Stamp Duty in Mumbai by 3 per cent till December 31, 2020, and by 2 per cent till March 31, 2021. This change was effective from September 1, 2020, and effectively brought down the Stamp Duty in the city from 5 per cent of the consideration value of the property in August 2020 to 2 per cent till December 2020 and 3 per cent till March 2021.
In addition to the reduction in Stamp Duty in Mumbai, the state government also announced a reduction in Stamp Duty in other regions of the state. The Stamp Duty in Maharashtra (areas other than Mumbai) was reduced by 2 per cent from September 1, 2020 to December 31, 2020 and by 1.5 per cent from January 1, 2021 to March 31, 2021.
Let us understand how the above fall in Stamp Duty in Maharashtra has affected the cost of property for homebuyers. For instance, Ms Neerja purchased a property in Mumbai with a consideration value of ₹2 crores. Since she had purchased the property in August 2020, she had to pay ₹10 lakhs in the form of Stamp Duty (5 per cent of the value of the property).
On the other hand, Ms Aaravi, who had purchased a property amounting to ₹2 crores in Mumbai, had to pay only ₹4 lakhs as Stamp Duty. This is because she purchased the property in November 2020 when the Stamp Duty in the city stood at 2 per cent of the consideration value of the property. Ms Rutuja purchased a property in Mumbai in February with the same consideration value and had to pay ₹6 lakhs (3 per cent) as Stamp Duty.
Therefore, a property with the same consideration value in Mumbai cost Ms Neerja ₹1.10 crore, whereas it cost Ms Aaravi ₹1.04 crore and Ms Rutuja ₹1.06 crore. This variance in total property cost was because of the varying rates of Stamp Duty prevailing at the time of the purchase. These examples shed light on the impact Stamp Duty can have on your overall budget to buy a house.
Stamp Duty in Maharashtra – Present Rates
Presently, the Stamp Duty rate prevalent in Maharashtra is as follows (applicable from April 1, 2021):
|Mumbai (City and Suburban Areas)||5.0 per cent of the consideration value of the property|
|Nagpur Municipal Corporation||6.5 per cent of the consideration value of the property|
|Other Urban Areas||6.0 per cent of the consideration value of the property|
|Rural Areas under NIT Area and Within the Influential Zone||4.5 per cent of the consideration value of the property|
|Rural Areas under NIT Area and Beyond the Influential Zone||5.5 per cent of the consideration value of the property|
|Rural Areas Under the MMRDA||5.0 per cent of the consideration value of the property|
|Other Rural Areas||4.0 per cent of the consideration value of the property|
You can use the Sarathi Tool of the Department of Registration and Stamps, Government of Maharashtra, to calculate the Stamp Duty payable on the property purchased by you. You must enter the area and the consideration value of the property to arrive at this computation. It is now possible to make the payment of Stamp Duty online.
Book Your Home At Piramal Realty
Now that you know how important a role the prevailing rates of Stamp Duty play in the determination of the total cost of a property, you can revisit your housing budget and incorporate the impact of Stamp Duty therein. If you are looking for a luxury home in the Mumbai Metropolitan Region, Piramal Realty is where your search must stop.
With our well-designed residential projects in South Mumbai, Thane, and Mulund, you can have an abode that is at once well connected and secluded, luxurious and tranquil. You can check out our projects and make your booking online now.
Here are the housing projects of Piramal Realty spread across the MMR.
- Piramal Mahalaxmi – South Mumbai
- Piramal Vaikunth – Thane
- Piramal Revanta – Mulund
- Piramal Aranya – Rani Baug
Disclaimer – This article is based on the information publicly available for general use. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.