A Guide To Stamp Duty And Registration Fees For Sale Deeds

stamp-dutyApart from the price of the property there are a number of other costs involved while purchasing real estate. Stamp duty and registration are two such costs that can make a big difference to your budget.

1. What is Stamp Duty?

Stamp duty is a form of tax levied on documents or transactions. Stamp duty fees differ from state to state. In Bangalore, for sale deeds, the current stamp duty is 5.65%, including surcharge and cess, of assessable value.

2. What is registration fee?

Registration fee is levied for the registration of documents under the provisions of Registration Act, 1908. The registration fee for a sale deed is 1% of assessable value.

3.What is the assessable value of the property

The assessable value of the property has 4 components

  • Saleable Area value – It is calculated by multiplying the guidance value of the area with the size of the property depending on whether it is an apartment, an independant house or a plot.

  • Car Park Value – Calculated on basis of saleable area value

  • Floor Rate Value – For units located on the 5th floor or above

  • Amenities’ Value – For units located on the 5th floor or above

All these add up to the assessment value of a property.

4. How is the saleable area value different for apartments, plots or individual houses?

Saleable area value is calculated differently for each:

  • Individual flat – Super built up area of the flat X Guidance value

  • Plots – Sq. ft. area of the plot X Guidance value

  • Independent houses – Total area on which the house is constructed X Guidance value

 

5. What is guidance value?

Guidance value is the per sq. ft. Value fixed for a particular road/ area, below which you cannot register a property.

6. Does the guidance value change areawise? And how often is it revised?

Yes. The guidance value changes depending on where the property is located. Rural areas tend to have higher guidance values. It is set by the committee constituted by the Inspector General of Registrar and is reviewed and revised when required.

Apart from the price of the property there are a number of other costs involved while purchasing real estate. Stamp duty and registration are two such costs that can make a big difference to your budget.


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53 thoughts on “A Guide To Stamp Duty And Registration Fees For Sale Deeds”

  1. Dear Sir
    need your opinion of pricing there a small project in RT nagar Bangalore, for 9 apartment but only 8 units has car parking since there is possibility of car parking for last apartment due lack space, just need to understand what could be discounting in price for the apartment which is without car-park its mid segment project the apartment which was sold with car park in the complex was for 60 approx and what relaxation can given in stamp duty for such cases
    Pl advise.

    Regards
    Sajid

    1. Hi Sajid

      The price of the car park is mostly fixed by the Builder and you can consider that amount is not charged to you. Stamp duty is calculated based on the area that you are going to purchase (either of guideline value or stamp duty calculated based on purchase area, which ever is higher).

  2. Hi ,\r\n\r\ni am trying to purchase a flat in harlur road , bangalore. as per the agreement its mentioned as below .\r\n——————————————————————————————————————————————————————————\r\n14. WHEREAS the Vendors have offered to sell the Schedule ?B? Property free from all encumbrances and the Purchaser relying on representation made by the Vendors have accepted the said offer and have agreed to purchase the Schedule ?B? Property free from all encumbrances, for a total sale consideration of Rs.56,00,000/-(Rupees Fifty Six Lakhs Only), subject to the terms and conditions hereinafter appearing. On above mentioned Rs.56,00,000/-(Rupees Fifty Six Lakhs Only), as per UDA share 513 sqft of sale consideration is Rs.10,00,000/- and super built-up area price is Rs.46,00,000/-.\r\n\r\n—————————————————————————————-\r\nthe land owner is saying during registration 46lacs will be applied . so that i have to pay less registration amount and less tax .when i have asked why not total amount .\r\nas per my knowledge if the amount is more 50 lacs buyer has to pay 1% tax . but my confusion is why seller is interested not to go for registration for the 56lacs instead of saying to go for 46lakhs .\r\n\r\nis there a problem in feature . why seller wants to show less amount during registration . Also is it mandatory to show the amount for the UDS amount in agreement .\r\n\r\nwaiting for your valuable response as earliest . thanks in advance .

    1. Hi Birupakshya\n\nThe seller wants to show lesser value to avoid coming under the 1% TDS bracket (Rs.50 lakhs and above). The onus of remitting this 1% TDS to the government lies with the buyer and once this done, the transaction is trackable from the tax department. The seller possibly wants to avoid this.\n\nFor flats, it is mandatory to show what is the UDS (Undivided share) and it also protects your interests because it allots a right to you in the land on which the apartment sits. If you are taking a loan and are OK with paying the registration fee in full, then you can insist on registering at full value. However, it is adequate if you register at either the guideline value or more. If you intend to sell the property in the near future, then register at full, if not registering at guideline value will be sufficient. This is because the value at which you register matters for computation of capital gains when you sell.

    1. Hi Ravi\n\nThere is no difference in the process of registration. However, there is a small premium attached to it and hence the guideline value is increased by 10% as against a normal plot that is not a corner site.

  3. Hi,\r\nI planning to buy a property of 1200sft with 790sqft of house.Previously(by 2013) they have registered for 18lac in guidance value .This area is Ramamurthy Nagar dasappa Layout.I approached one lawyer nearby.he told some to for 44L.Full confusion.his calculation is 1200*Guidance value + 790*Guidance value.Please help me to understand the proper value to register.

    1. Hi T S Raja,\n\nThe calculation is correct. The guideline value has gone up and right now from 1st April the guideline values have again gone up in some places. So the current rate at Dasappa Layout for land as per estimate is around Rs.2000 to Rs.2260 per s.ft. The cost of building will be calculated at about R.1500 to Rs.1650 per s.ft based on the type of tiles used, ceramic, marble or granite.\n\nSo roughly it comes to about Rs.40 lakhs but there are other factors that will be included which could take the value up such as car park etc. So it is best to check with the local sub-registrar office before you got for registration.

      1. Dear Admin, Thanks! for such a nice article. \r\nI have one doubt here, at the beginning of the article you mentioned like this\r\n\r\n1) “Independent houses ? Total area on which the house is constructed X Guidance value”, general understanding of this term is that if I have 1200 sq.ft land with 1500 sq.ft (750 sq.ft in each floor) built-up area, then I should calculate the registration value as 1500*Guidance value.\r\n\r\n2) But for the question Raja asked here you have mentioned (1200 + built-up area (house constructed area)) * Guidance value. Which one is correct? Please clarify.\r\n\r\nAlso I have a house in MUNNEKOLALU, which I’m planning to sell, that has the 1200 sq.ft land with 1500 sq.ft (750 sq.ft in each floor) built-up area, that R.C.C Roof, with cement brick mortar, Flooring with tiles / Marble , wooden doors, already tenants are staying with all the facilities like Cauvery water meter connection. \r\n\r\nCan you please let me know potential Guidance value of this property / sq.ft as per govt.records and also clarify which is right way (option 1 or 2) of calculating the complete sale value of property

        1. Hi Kumar\n\n1) That was generic information taken from a newspaper article. For independent house, it is taken as the value of the land plus the value of the building and not on the basis of a composite guideline value as applicable for apartments.\n\na) Value of guideline value of land will be computed for the 1200 s.ft.\nb) Value of building will be computed for the 1500 s.ft of building. The value taken for first floor will be slightly lower than that of ground floor. For ex: RCC, Sheet, Brick Wall, Granite, Flooring/ Teak Wood Windows is approx Rs.1600 per s.ft. while RCC, Sheet, Concrete/Brick Wall, Mosaic/ Vitrified/ Ceramic Flooring/ HonnewoodWindows is approx. Rs.1400 per s.ft.\nc) These both put together will become the guideline value of the property.\n\nIf you want to sell the property, then you shouldn?t be worrying about the guideline value because registration cost is borne by the buyer. However, if your goal is to compute total cost of ownership for a prospective buyer, then it makes sense. Always do check with the local sub-registrar office on the exact stamp value before going in for registration.

  4. helo sir\r\nI am buying an old house in Battrahalli , KR puram limits. I am buying it single floor for 40 lacs and planning to register at same value.\r\nMy question is do I need to pay service tax and VAT or only stamp duty and reg. charges? Is there any change in these rates from APR 1 2016? pls adivce.

    1. Hi Abilash,\n\nIf you are buying an old house, there is no applicability of VAT and service tax. That applies only to sale of apartment, villas by developers and builders when it is a first sale.\n\nThe guideline values were expected to change but if the guideline value is much lower than the value you are registering it at, then you don?t need to worry because the stamp duty and registration charges will be applicable on the value of registration.\n\nStamp duty is calculated at 5.6% inclusive of cess and surcharge. Registration fee is 1%.\nSo total cost will be 6.6% of the value of registration.\n\nPlease refer to this article on stamp duty and registration.\nhttp://support.homeshikari.com/blog/guidance-calculated-bangalore-3-1664/

  5. Hi Admin \r\n\r\nThe above post was very helpful , but still have some doubts regarding the property I am buying :\r\n\r\nBackground : Guidance Value of the area is 2130/- per sqft , but my actual sale cost is Rs 3500/- per sqft . I am planning for a 6th floor apartment (Area :1340 sqft). Its a ready to move in property and only amenities is being installed in the property as of now . \r\nCar Parking : Rs 200000\r\nAmenities: 1,50,000\r\n\r\nQuestions :\r\n\r\na) Will the Stamp Duty,Registration be calculated on the Actual Sale Cost or the Guidance Value\r\nb) What % of the total cost of amenities will be used to calculate the Stamp Duty and Registration . \r\nc) Will aspects like (Electrical Works/Advance Maintenance/Cost Of Power Backup) be a part of amenities . \r\nd) As this is Ready to Move in Property (all blocks are completed except for landscaping and some amenities) , is the builder correct to charge Service Tax and VAT for the same . \r\n\r\nRequesting your views on the same . \r\n-Arpit

    1. Hi Arpit\n\n1) Stamp duty and registration will be calculated on the higher of the guidance value and the sale deed value.\n2) Amenities are calculated not on the basis of their cost but on what is included in the project. Amenities are divided into 14 groups and if your project has 4 group of those amenities OR less, then no extra charges are levied. If it has 5 group of amenities, then it is 0.75% of value calculated as per guidance plus higher floor additional rate and this goes all the way up to 14 groups or more, where it will become 7.5% of the value, at which point it is capped. Since your apartment is on the 6th floor, higher floor additional rate will be applicable at 0.5% of the value.\n3) Electrical works, Advance Maintenance, Sinking Fund Deposit, Cost of Power Backup etc. are not considered amenities.\n4) This is a very contentious issue and it depends. It is best that you seek advice from a Chartered Accountant based on the stage of construction. However, service tax will be calculated on labour and other services while VAT will be applicable on the materials and sale and there is a specific way to calculate it based on type of project and your agreement with the builder.\n\nMeanwhile, given the no of queries cropping up on the guidance value we plan to do a post that simplifies this to the extent possible. Watch out for that post in the next couple of days. That should answer all your queries.

  6. Hi,\r\nIs the registration and stamp duty charged on whichever is higher of “guidance value” or “Sale Deed value” or “Sale + Construction value – which is the total cost”? This question is regarding a flat in a community, under construction right now near Rayasandra Lake.

  7. what is the guidence value for apartment in Brigade gardenia in Jp nagar? what about CAR parking and clubhouse charges to be included for registration?

    1. Hi Guest\n\nThe indicative base guideline value in that area for such an apartment should be in the range of Rs.5400 s.ft. Yes, There are a list of 14 group of amenities categorised which include clubhouse that will be considered for valuation. If the amenities fall within 5 groups, then 0.75% extra will be computed on value of property and it goes up to a maximum of 7.5% for 14 groups.\n\nSimilarly car park is taken between Rs.1.5 lakhs to Rs.2.5 lakhs for covered park and this depends on the value of the property. The value will vary between Rs.1.35 lakhs and Rs.2 lakhs for open park again depending on value of property.\n\nBest that you refer to this post that explains how valuation is done (http://support.homeshikari.com/blog/guide-stamp-duty-registration-fees-sale-deeds-1099/). But at the same time, these are only indicative and you are requested to go and check with the sub-registrar office with all details before registration for an accurate estimate.

  8. So , that means that calculation for registration , stamp duty, etc are done on the guidance value. Is my inference correct?\r\nI had another doubt – can i be charged for car parking (around 3 lakhs) in an apartment type for four floors?

    1. Hi Ashwathi\n\nCalculation of stamp duty and registration is done on guidance value, but if your sale deed is for a higher value then the stamp duty payable will be on the whole amount.\n\nIf you are asking if it is normal to get charged Rs.3 lakhs for a car park in an apartment. Well, it all depends on the value of the property and how premium it is. The cost of the car park as per guideline value is taken Rs.1.5 to Rs.2.5 for covered parks and between Rs.1.35 to Rs.2 lakhs for open park. How much a builder will actually charge will depend on several other factors? And in our estimate, if it is a budget apartment then the cost seems a bit on the higher side, but if it is a premium one then it seems reasonable.

  9. I want to know the current Guidance value of the area Hari Nagar, near JP NAgar 8th Phase? Is there any proposed increase in the Guidance value in recent future as I will registering a flat in this area in the month of March/ April 2016. Please suggest.

    1. Hi Amit,\n\nCould vary anywhere between Rs.3200 to Rs.4500 per s.ft for flats. These values are only indicative and based on base guideline value. It is expected to vary based on the type of building (budget / premium), the builder, the flooring used, the amenities etc. You are requested to check with the respective SRO for an accurate estimate before registration.\n\nGuideline values in some parts of the city are expected to be revised from 1st April 2016. We do not know if your area falls under that category right now.

  10. Hi,\r\n\r\nI am buying a flat in Kodihalli@ 50 L..but the guidance value for same is at 66 L…\r\n\r\nNow, the sale value is @50 ..but I assume registration has to be done at 66L+car parking rate..So, I would be paying stamp duty on 50 but registration would be on 66L+Car parking ? Is this allowed ?\r\n\r\nHow can I proceed with this transaction ?

    1. Hi Rohit\n\nIn this case, the actual sale value is lower than the guidance value which is pretty rare unless it is distress sale. However, if the actual sale value is lower than the guidance value, then you will need to still pay the stamp duty for Rs.66 lakhs while the sale deed consideration could be Rs.50 lakhs. This means that you are paying extra stamp duty and registration fees than you normally would. But that cannot be avoided and this is the only way to keep the transaction legal in all aspects. For property sale value of Rs.50 lakhs or more, a 1% TDS will need to be deducted by the buyer and remitted to the government on behalf of the seller.

  11. Hello admin\r\n\r\nCan u clarify how the guidance value for a second car park is calculated\r\nWhat is the guidance value in Haralur area, Shobha classic\r\nThanks\r\nAnil

    1. Hi Anil Vasudevan,\n\nThe guidance value for Sobha Classic in Harlur is in the range of Rs.3750 per s.ft. (indicative) There is a draft for guidance value amendment which is up for review, once approved it will come into effect. The proposed rate is in the range of Rs.4150 per s.ft. (indicative)\n\nThe value of the car park (covered) is calculated @:\nRs. 1.5 lakhs for properties that are valued up to Rs.50 lakhs. (10% less for open car park) Rs. 2.0 lakhs for properties above Rs.50 lakh and up to Rs.1 Crore (25% less for open car park) Rs. 2.5 lakhs for properties above Rs.1 Cr. (20% less for open car park)\n\nIf you have 2 car parks then the value may increase accordingly or sometimes the sub-registrar office could also put some median value. It is best to check with the sub-registrar office to get an accurate and updated guideline value before you proceed for registration.

    1. Hi Kumar\n\nUnless you specify whether it for a plot or apartment and if it is for a flat what kind of flooring is being used, the range of guideline values varies. Please specify to get proper information. In addition, any info we provide will only be indicative and you are requested to physically check with the Sub-Registrar?s office with the property details to get accurate and up to date information.

  12. GC Srinivasa Rao

    Dear Sir,\r\nI need to know the registration charges, stamp duty for a newly constructed house in meerpet for a value consideration of Rs.45,00,000/- and whether TD transfer duty is to be paid on this and total how much is to be procured before going for registration. Pl reply urgently. Thanking you in advance

    1. Hi Srinivasa Rao\n\nWe do not have accurate information on the guideline values for Hyderabad at the moment. You are requested to visit the http://registration.telangana.gov.in site for the latest guideline values.\n\nFurther it is suggested that you approach the local Sub-Registrar office and consult them for an accurate determination of the guideline value and the registration fees.

  13. Dear Sir\r\n\r\nCan you please advice whether Guidance Value of a flat which is 10 years Old at MAllewsaram at 18th Cross as the GV of a New Flat and OLD flat should be different???

    1. Hi Narayanan\n\nThere is no difference between the guideline value of a new and old flat in the same location. What matters is the flooring (mosaic / ceramic / vitrified or wooden / marble / granite) and also the amenities in the apartment complex.\nPlease refer to our post on guideline value calculation (http://support.homeshikari.com/blog/guide-stamp-duty-registration-fees-sale-deeds-1099/)\n\nThe approx guideline value at Malleswaram 18th Cross without taking into consideration amenities etc. is Rs.6540/- per s.ft of super built-up area for mosaic / vitrified / ceramic as against Rs.6670/- per s.ft for wooden / marble / granite flooring. Again you are advised to check with the SRO before you actually determine the exact cost of registration for preparation of DDs etc. The info provided here is only to be taken as indicative.

  14. Hi,\r\n\r\nI had purchased flat from land owner share of one venture. Registration was already done.\r\nNow during possession land owner is asking for extra charges for Amenities.\r\n\r\nPlease advise on this.\r\n\r\nThanks,\r\nRajesh B

    1. Hi Rajesh,\n\nThat is unfair. You should be reviewing the sale deed and whether it permits you to use all common amenities in the complex. If it does, then you should be consulting a lawyer, if they don’t allow use and demand money. However, if it is something that is being pooled by all flats as an extra charge for specific reasons agreed upon by everyone and accepted by the association then you should consider that.

  15. Hi, I am planning to buy a property total value of worth 67,51,000 (1400sqft*4000) + BWSSB, CarPark, KEB (6,00,000) + Tax 5,51,800.\r\nThis property is on the 3rd floor and has amenities like Swimming Pool, Gym, Children’s area and a party hall.\r\nI checked the guideline value – it is estimated at Rs. 2,100 per sqft\r\n\r\nI am confused what will be the total registration fee. Could you please help and let me know what will be the approx registration fee that i would need to pay.\r\n\r\nThanks for your help in advance.\r\n\r\nRegards\r\nShankar

  16. i am willing to buy an 2 BHK plot in and around the sahakara nagar and byatarayanapura, yelahanka. kindly tell me approximate price of the plot

    1. Hi Narasimha,\n\nWe don’t deal with plots and are unable to help you with information on this. The prices of plots will vary based on their approvals and jurisdiction. You are requested to check any of the online listing sites for such info.

  17. Hi,\r\n\r\nThx for the informative post. I have one request, could you pls put an example calculation for a flat say 1500 sq.ft area, some guidance value (say Rs.3000), 12 floor? Basically I am looking for the information on below points -\r\n\r\nThe assessable value of the property has 4 components\r\n\r\nSaleable Area value ? It is calculated by multiplying the guidance value of the area with the size of the property depending on whether it is an apartment, an independant house or a plot.\r\nCar Park Value ? Calculated on basis of saleable area value\r\nFloor Rate Value ? For units located on the 5th floor or above\r\nAmenities? Value ? For units located on the 5th floor or above\r\n\r\nWhat would be the car park value, floor rate and amenities value in this case? What is the “basis” of saleable area value that car park value calculated? Same way for floor rate and amenities value. Thanks.\r\n\r\nRegards,\r\nSonal

    1. Hi Sonal,\n\nThis is a difficult question because we need to ascertain what the purpose is.\n\n1) Is it to arrive at a market driven saleable value?\n2) Or is to arrive at a valuation driven by guideline value?\n\nIf you are looking for a market driven saleable value then the guideline value may not be the correct measure for it. In some states, like TN the guideline value is closely tagged to market value whereas in places like Karnataka, the guideline value may still be anywhere between 60% to 80% of the market value. And the market value usually factors in the value of locational advantage, brand, amenities and floor rise (better view) etc. Depreciation of value may also be calculated on old flats in such a situation.\n\nBut let?s take only the case of the guideline based value for illustration:\n\nIn this particular case, let?s assume the guideline value is Rs.3000 per s.ft. and the super built up area is1500 s.ft. Then the value of the super built area of flat based on guideline value is Rs.45 lakhs. As per government norms, the guideline values can differ based on the flooring used, marble, granite etc versus mosaic, ceramic tiles etc., I would say by about 10%.\n\nFor floor rise, upto 5th floor no additional value is charged but from the 6th floor there is an additional 0.5% value attributed for every floor rise. This is capped at 5% additional for 15th floor and above.\n\nAmenities as per Karnataka Stamps & Registration are grouped into approx 15 categories (you need to check grouping). No extra value is attributed upto a group of amenities in any 4 categories. If they exceed 4, then an additional 0.75% is attributed for each additional category. And it is capped at 7.5% additional for 14 or more group of amenities.\n\nThe car park value is calculated on the basis of Rs.1.5 lakhs for a covered car park if the flat is less than Rs.50 lakhs, Rs.2 lakhs for flat value is Rs.50 lakhs and upto Rs.1 Crore and Rs.2.5 for flats costing Rs.1 Crore and above.\n\nSo assume that the flat in question is on the 12th floor and has 6 category of amenities, then the value is determined as:\n\n1) Base value on super built: Rs.3000 x 1500 sft = Rs.45,00,000\n2) Higher floor value = 3.5% x Rs.45,00,000 = Rs.1,57,500 (12th floor – 5 plus 7)\n3) Amenities = Total of 1 & 2 x 1.5% = Rs.46,57,500 x 1.5% = Rs.69,862 (6 categories of amenities)\n4) Car park value = Rs.1.5 lakhs (flat value less than Rs.50 lakhs taking 1+2+3)\n\nSo total guideline value of the flat will be Rs.48,77,362. Again this is a back of the envelope calculation, one would need to precisely go through the details to fix the guideline value.\n\nHope that helps.

      1. Hi,\r\n\r\nMany thanks for the detailed reply. I was looking for #2. Valuation as per the guideline value and using the example you explained it very clearly and precisely! One more question, where can I find this information on online? I suppose there should be some Karnataka govt website detailing these rules about floor rise and car park etc. I could not find that, it would be great if you could point me to the same.\r\n\r\nAnyways, thanks again.\r\n\r\nRegards.

        1. Hi Sonal,\n\nThe information is available on http://www.karnataka.gov.in/karigr/, the official website of the Karnataka Stamps & Registration Department. However the site seems to be down today. Again some of the information here may be difficult to extract because it is in Kannada or in the form of pdf files. You can also look at a private non-government source, a site called http://www.guidevalue.com which is pretty easy to use. However, you should be careful about checking the information against the official source before using the values.

  18. Hello sir , I want to purchase a 8 year old 2 BHK Apartment ( Resale ) . What is the current Guidance Value in Kodihalli ? ….since the Apartment is 8 years old will the Guidance Value differ ? ….plz guide

    1. Hi Praveen\n\nIf the kodihalli you are talking about is near Indiranagar / HAL then the approximate guideline value will be around Rs.4500 per s.ft for apartments. Age doesn’t matter, there will be a slight differential between different flooring.\n\nAgain it is best to check with the Indiranagar Sub-registrar office with the correct survey no. and property details to get the exact guideline value.

  19. 1. Is service tax charged by the builder applicable on the following:\r\n (a) KPTCL / BWSSB Deposits and Connection Charges\r\n (b) Club House Charges\r\n (c) Generator Charges\r\n (d) Legal Charges\r\n\r\n2. Is the cost of the above four amenities / services to be included in the value of the property for estimating stamp duty and registration charges?

    1. Hi Kishore,\n1. Is service tax charged by the builder applicable on the following:\n(a) KPTCL / BWSSB Deposits and Connection Charges\n(b) Club House Charges\n(c) Generator Charges\n(d) Legal Charges\nAns:Service tax is applicable except sl No (a) and there also if any profit is involved that should come under service tax.\n\n2. Is the cost of the above four amenities / services to be included in the value of the property for estimating stamp duty and registration charges?\nAns : No these services are not required to be included for stamp duty and registration charges.

  20. Hi,\r\n How is the guideline value of a property arrived at? I am interested in buying a resale flat in Lal Bahadur Shastri Nagar, HAL area. The age of the property is 10 years old. What would be the approximate guideline value of the property?

    1. Hi Konwar\n\nThe guideline value of a property is arrived at by the Revenue authorities after review on a yearly basis which takes into account the highest registration value of properties in a particular locality as well as inflation and market prices collected from different sources. You can find out the guideline value of the property by going to the BBMP site and checking with the survey no. of the property and taking into account the type of building as specified. Or you can approach the local sub-registrar office with a copy of the papers to get a more accurate estimate of the guideline value.\n\nIf you need assistance, please mail us at services@homeshikari.com with the more details of the property.

  21. i have to sell my residential house which has a market value of rs 120 lacs & the buyer is willing/wanting to pay the full amount by cheque.\r\nAs per the govt. guidance value for my area the property is worth 80 lacs. . \r\nIf i make the sale agreement at 120 lacs , will i pay stamp duty at 80 lacs or 120 lacs??\r\nif i make the sale agreement at 80 lacs, how can i accept cheque of 120 lacs from income tax point of view. In this senerio, if i do, what is the implication / explanation of the difference amount of Rs 40 Lacs.\r\nCAn i get into 2 agrrements, i of 120 lacs from income tax point of view & another of 80 lacs from regn point of view ? will that be legal??

    1. Hi Ajay\n\n1) If you make the sale deed for the full transaction value, then you will have to pay stamp duty for the value of 120 lacs. But normally stamp duty for registration is borne by the buyer and it is in his interest to ensure that he registers the property at the full value that he is paying for, especially because he is paying you through cheque.\n\n2) You will have tax problems if you register for a lower value and collect a higher amount via cheque. if the taxman comes, you can’t explain the amount because it is pretty huge.\n\n3) Not advisable to do two agreements because though you may register at the guideline value to save on registration cost for the buyer, the extra amount you are being paid through cheque is traceable and cannot be explained in any other fashion, other than as income.\n\nOur suggestion is that you register it at full value. Registration cost is normally borne by the buyer. Do a capital gains / loss computation with the help of a Chartered Account if you intend to utilize the money elsewhere and pay the taxes if applicable. Normally if you have held the property for more than 3 years then it is deemed to be long term and the tax rate applicable is only 20% and it is also calculated after indexing with inflation. However, if you are re-investing the entire proceeds of the sale into another residential property within a specified period, then no tax will be applicable. For more info. http://profit.ndtv.com/budget/selling-a-house-tax-changes-you-need-to-know-588519

    1. Hi Banuprakash,\n\nValue varies from property to property, as per government guideline value for apartment on Hesaraghatta main road varies from Rs.1750 to Rs.2130.

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