How Is Stamp Duty Decided?

Stamp duty is a tax paid to the government on certain legal documents, especially property transactions. The amount of stamp duty is determined based on various factors, including the type of document and the property's value. Here's how stamp duty is typically decided:

Factors Determining Stamp Duty

• Property Value: Stamp duty is generally calculated as a percentage of the market value or transaction value of the property. Higher-value properties attract higher stamp duty.
• Location: Stamp duty rates vary from state to state in India. Urban areas often have higher stamp duty rates compared to rural areas.
• Type of Document: Different types of documents, such as sale deeds, gift deeds, or lease agreements, have different stamp duty rates. For example, sale deeds may attract higher stamp duty compared to lease agreements.
• Property Type: Residential and commercial properties may have different stamp duty rates. Some states offer lower rates for first-time homebuyers or women buyers to encourage property ownership.
• Ownership: If the property is being transferred to a family member, the stamp duty may be lower under specific provisions for family transfers or inheritance.

Summary

Stamp duty is determined based on factors like property value, location, document type, property type, and ownership. It varies across states and is calculated as a percentage of the transaction value or market value.