Stamp Duty in India – What It Is & How to Calculate It

When buying property in India, stamp duty is one of the biggest costs after the actual price of the property. But what exactly is stamp duty, and how is it calculated?

This guide explains everything you need to know—what stamp duty is, how it’s calculated, state-wise rates, and ways to save on it.

1. What is Stamp Duty?

Stamp duty is a government tax levied on property transactions to legally validate documents like:

• Sale Deeds

• Lease Agreements

• Gift Deeds

• Mortgage Deeds

It makes the property transaction legally binding and must be paid for registration.

2. Who Pays Stamp Duty?

• Buyer (in case of property purchase).

• Lessee (for rental agreements).

• Donor (for gift deeds, but sometimes the recipient pays).

3. How is Stamp Duty Calculated?

Stamp duty is calculated as a percentage of the property’s market value or agreement value (whichever is higher).

Factors Affecting Stamp Duty:

✔ Property value (higher value = higher duty).

✔ Property type (residential, commercial, agricultural).

✔ Location (urban areas often have higher rates).

✔ Gender of owner (some states offer discounts for female buyers).

✔ Age of owner (senior citizens may get concessions).

4. State-wise Stamp Duty Rates in India (2024)

State	Residential Property	Commercial Property
Maharashtra	5-7%	5-7%
Delhi	4-6%	6%
Karnataka	5-6%	5-6%
Tamil Nadu	7-8%	7-8%
Uttar Pradesh	7% (men), 6% (women)	7%
Telangana	5-6%	6%
Gujarat	4.9%	4.9%

Note: Some cities (like Mumbai, Bengaluru) may have additional municipal charges.

5. How to Calculate Stamp Duty?

Formula:

Stamp Duty = (Property Value or Agreement Value) × (Stamp Duty Rate)

Example:

If you buy a flat in Mumbai (Maharashtra) for ₹1 crore, and stamp duty is 5%:

• Stamp Duty = ₹1,00,00,000 × 5% = ₹5,00,000

6. How to Pay Stamp Duty?

Methods of Payment:

1. Physical Stamp Paper (from authorized vendors).

2. Franking (bank or franking agency stamps the document).

3. E-Stamping (online payment via SHCIL).

Steps for Online Payment:

1. Visit SHCIL or your state’s stamp duty portal.

2. Enter property details (value, location, type).

3. Pay via net banking/UPI/debit card.

4. Download & print the e-stamp certificate.

7. Penalty for Late Payment

If stamp duty is not paid on time, a penalty of 2% per month (up to 200% of the duty) may apply.

8. How to Reduce Stamp Duty?

✔ Register in a woman’s name (some states offer 1-2% discount).

✔ Buy in a lower-cost area (stamp duty varies by locality).

✔ Show lower property value (risky, may lead to legal issues).

✔ Check for government schemes (some states waive duty for affordable housing).

9. Difference Between Stamp Duty & Registration Fees

Stamp Duty	Registration Fee
Tax on property value (4-8%)	Fixed fee (0.5-2% of value)
Paid to state government	Paid to registrar’s office
Validates the document	Officially records the transaction

10. FAQs on Stamp Duty

Q1. Is stamp duty the same across India?

No, each state sets its own rates.

Q2. Can I claim stamp duty in tax deductions?

✅ Yes! Under Section 80C, up to ₹1.5 lakh can be claimed.

Q3. Is stamp duty required for resale property?

✅ Yes! Every property transaction attracts stamp duty.

Q4. What if stamp duty is underpaid?

The document may be considered invalid, and penalties apply.

11. Conclusion

Stamp duty is a mandatory cost when buying property in India. Key takeaways:

✔ Ranges from 4-8% depending on state & property type.

✔ Must be paid before registration.

✔ E-stamping is the easiest way to pay online.

Always verify the latest stamp duty rates in your state before purchasing property to avoid last-minute surprises!

Need help calculating stamp duty? Use online calculators or consult a property lawyer for accurate estimates. 🏠