How to Save Stamp Duty & Registration Charges

How to save stamp duty and registration charges is a tricky question. Before discussing the same, lets understand what is stamp duty. According to wikipedia, Stamp Duty is a tax that is levied on documents. At the time of transferring ownership of property i.e. Registering Sale Deed, the buyer need to pay stamp duty & registration charges to Govt. The Stamp duty and Registration Charges vary from state to state. Some states offer discount on Stamp Duty e.g. if the property is registered in the name of a woman then you can save stamp duty. In Delhi stamp duty to be paid is 6% but if the property is registered in the name of a woman then stamp duty to be paid is 4% of Total Sale Deed value. Thus you will save stamp duty to the extent of 2% of Sale Deed Value. For the benefit of readers, I am listing down the current stamp duty charges in various states. These charges are indicative and may change. Also some state govt levy different stamp duty charges for different areas like urban & rural.

Chandigarh: 0%

Gujarat: 3.5%

Uttarakhand: 4%

AP, J&K, Punjab, Haryana: 5%

Delhi, UP, Bihar, Jharkhand, West Bengal, Sikkim & All NE States: 6%

Maharashtra, Karnataka, Kerala, Goa, Odisha: 7%

Chhatisgarh: 7.5%

Rajasthan, MP, TN & Himachal Pradesh: 8%

It is mandatory to pay stamp duty as per the stamp duty valuation fixed by the Registrar of your area under the stamp duty act of your state. Registration Charges are over & above Stamp Duty and is levied @ 1% of Total Property Value as per sale deed. Now lets understand how to save stamp duty and Registration charges with the help of following example.

Mr A is buying a 1000 sq ft flat in Delhi for Rs 1 Cr. Here 1 Cr is Market value of the flat. Now the sale agreement should be executed for total amount i.e. 1 Cr but you can save stamp duty by registering the property at circle rate or govt guidance value. Circle Rate or Govt Guidance Value is the minimum value at which the property can be registered. In laymen terms Govt Guidance Value or Circle Rate is the market value of property as per State Govt. It is always lower then the existing market value of property. In this example, Circle Rate or Govt Guidance value is Rs 6500 psf therefore according to Govt the Circle Rate or Govt Guidance Value of the property is 65 Lacs whereas actual market value is 1 Cr.

By registering the property at Circle Rate or Guidance value you can save substantial amount in stamp duty & registration charges. If you register the property @ 1 Cr then you will be paying 6 lac as stamp duty & 1 Lac as Registration charges in Delhi therefore total payout is 7 lac for registration.

In order to save stamp duty, you decided to pay stamp duty and registration charges @ Guidance Value or Circle Rate then you will register the property @ 67 Lacs (65 Lacs as Circle Rate + 2 Lac for Car Parking). It is mandatory to include Car Parking charges in Circle Rate or Guidance Value to arrive at final registration value. Therefore stamp duty to be paid is  4.02 Lac and Registration Charges of 0.67 Lacs. Total Payout is 4.69 Lacs.

Total saving on stamp duty and registration charges in this case is equal to 7 Lac – 4.69 Lac = 2.31 Lac.

Now 2 big questions, to save stamp duty you will register the property at guidance value or circle rate but (a) How to convince the Seller for same & (b) How will you show the transaction of balance 33 Lacs i.e. 1 Cr – 67 Lacs.

Answer is if the seller agree to register property at Guidance Value or Circle Rate then he will save on Capital Gain Tax therefore he will not mind registering property at circle rate or guidance value. Regarding transaction of balance 33 Lacs, as the Sale agreement is signed for 1 Cr & property is registered for 67 lacs. Buyer can sign another agreement with seller which is called Deed of Transfer of Rights (DOTOR). Balance transaction of 33 Lacs can be shown in DOTOR, which will complete the financial transaction. I will discuss about DOTOR in more detail in my next article.

The only flip side of registering property at Guidance Value / Circle Rate to save stamp duty is that some Home Loan Providers like SBI will only provide Home Loan of upto 80% of Sale Deed Value not the Sale Value e.g. In this case if buyer avail home loan from SBI then SBI will provide maximum loan of 53.6 Lac i.e. 80% of 67 Lacs (excluding stamp duty & registration charges). Whereas in case of other lenders like HDFC, loan will be 80% of Sale Agreement Value i.e. 80% of 1 Cr = 80 Lacs as Home Loan.

This method to save stamp duty is very much legal and you can save good amount of money for your home furnishing :). Hope you liked this post. Please share your inputs/feedback through following comments section.

Copyright © 2011-2013 Nitin Bhatia. All Rights Reserved.




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  • Jagan Tarigoppula

    Really good article. Keep publishing such informative as well as money saving articles.

    • Haresh

      Dear nitin,

      • haresh

        apologize for not posting the message. Can you please elobarate any issues in registering a plot with some activity happened on the plot, than registering it as semi finished?

        LIC is offering a loan even if the plot is registered inspite of some construction activity happened on the land, where as SBI is offering only on semi finished registration document only. But with LIC offer, substantial amount of registration amount is been saved, can you please elobarate any hidden/known issues regarding this, my personal opinion is how can they register as plot when some construction activity happened?

        also how is LIC HFL loan, if I wanted to make extra payments every month other than the EMI compared to SBI, presently I have loan with SBI and I’m very much satisfied with SBI transperancy.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Legally, i will not suggest to register it as a plot.

          If construction activity is going on and you register as a plot then construction activity will be considered as encroachment. I can’t comment on any hidden issues without going through property documents but just to save some amount in stamp duty, i will not suggest to register as a plot.

          Personally i will not recommend to transfer your loan from SBI from LICHFL.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the post & sharing your feedback. Happy Reading :)

  • Kamlesh Kumar

    Dear Sir,
    Very good idea to save on stamp duty and registration charges but what if the deal is for investment purpose only.
    In case we are selling the same property within three years, if appreciated good enough, diff will be noted as short term capital gain which will attract huge tax.
    In case it is for residence purpose there is no harm in registering at govt circle rate.
    I have seen in smaller cities like kanpur, plots at outskirts areas are still avaiable at almost same rate as circle rate set by govt. Even in case someone can negotaite and do plenty of research he can get a lower price.
    Regards,
    Kamlesh

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I agree that Govt is trying to match the Circle Rate and Market value but only in very limited/few pockets specially in outskirts where land acquired is a agriculture land. There is a political compulsion to match circle rate and market rate so that farmers get best rates for their land.

      If both sale and purchase registrations are done at Circle rate then capital gain tax loss will be taken care :) I agree if purchase registration is at circle rate and sale registration is at market value then it will attract huge capital gain tax.

  • Deb

    Hi Nitin,

    Need some advice. I’m buying a property/Flat at Bangalore which cost me Total 36Lacs and I’m taking a Loan from SBI. Now the question is SBI mentioned Property should be registered as per the value indicated in the agreement. Now my builder response if we register as per the agreement value ( which is 36 Lacs) then I need to pay another 1 lac for Registration, where as If SBI are willing to register as per Guideline value, then I’m closing the deal in 36 Lacs. Please advice what are advantage and disadvantage..

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You have not mentioned Guidance value in your query, i am assuming it to be 30 Lacs.

      Now It depends how much loan you need. SBI will sanction the loan on Registration value not on agreement value. Its a catch 22 situation. If agreement and Registration value is same i.e. 36 Lacs than you need to pay high Registration charges at the same time your loan sanctioned will be high i.e. 80% of 36 Lacs.

      If you go for registration at Govt Guidance value than you will be saving on Registration charges but your loan sanctioned will be 80% of 30 lacs.

      Depending on your loan requirement, you may take a call. As i mentioned in my post that Its perfectly OK & legal to register property at Govt Guidance value instead of Agreement Value.

      • Deb

        Thanks for your advise Nitin. I have taken 25 Lacs loan from SBI which is sanctioned last week :) and rest 11 Lacs I’m paying from my pocket. The guidance value of the property is 1350 Rs per sf/ft and my sales agreement value is 6,54000/-. Now I understand from the bank that property has to be registered as per the value indicated in the sales agreement and the value would be around 17Lacs for 1189 sq/Ft area… In this situation will I be paying anything extra/ more than 36L?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You need to check who will pay stamp duty and registration charges. In normal scenario it is borne by the buyer i.e. you need to pay this cost or is it mentioned in your cost breakup sheet with builder.

          Besides this you need to check whether VAT and ST is included in your agreement with builder or it is also additional. I don’t think so you need to pay anything else besides these 2 components.

  • Samara

    Hi Nitin

    This is fantastic thread but i have a question for you. I am looking for a property of market value 1 Crore while Guidance value is 45 L. Seller is OK to just accept Guidance value on Sale Deed. Now my problem is how will private banks issue loan (for amount say 70 L) if my Sale Agreement shows only 45L. My assumption is bank must be given Sale Agreement document & they record this for legal purposes as well as auditing of house loan. So how is this possible ? This also leads to me to ask questions like

    1. Could we make 2 sale agreements ? One for registration and another for bank loan.

    2. Will banks validate that Sale deed should be registered with same pricing as what we showed them in Sale Agreement ?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale Agreement & Sale Deed can be 2 different documents. Private banks consider Sale Agreement Value for Loan eligibility and PSU banks like SBI consider Sale Deed Value. You need not to register Sale Agreement with Registrar but Sale Deed must be registered. You can execute Sale Agreement of 1 Cr and your loan will be approved based on this agreement. You can execute Sale Deed at 45 Lacs. This arrangement will solve your problem.

      1. You will not execute 2 sale agreements but 1 sale agreement and another sale deed. I have explained this in 1st para. I will not suggest to execute 2 Sale Agreements of different value as it will put you in legal trouble.

      2. No, Banks are not particular on this point. Only imp point to note is that Home Loan eligibility is decided based on Sale Deed Value by PSU bank and in case of Pvt Banks Sale Agreement value is considered for loan eligibility (It is not applicable for all).

      • Samara

        Thanks for response but won’t this cause below 2 issues

        1. Pvt banks issue loan using 1 Cr (& ofcourse based on their valuation) using Sale Agreement document which itself is not a govt registered document. Also in this case , assuming bank gives the check in the name of Seller , i assume Seller will be at loss as this whole of money becomes white now via Bank Check

        2. Isn’t this case (where i took more loan on Sale Agreement but registered for lesser which mean less taxes to govt) cause tax evasion from govt. perspective ?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          1. Sale Agreement will be executed on stamp paper of 0.1% of Loan Amount i.e. for 1 Cr Home Loan, your Sale Agreement will be executed on Rs 10,000 stamp paper. If the Home Loan requirement is 1 Cr than entire money will be in white only.
          2. Govt tries to match Guidance Value/Circle Rate with Market value. It is perfectly legal and fine to pay stamp duty @ Guidance Value/Circle Rate. The stamp duty is paid for basic structure i.e. bare shell house but house might be furnished and comes with other amenities in case of flat. Don’t worry on this part. You can pay stamp duty at Govt Guidance value/Circle rate.

          • Samara

            Thanks Nitin.

            On #2 , would that work even for a plot ? Plot’s guidance value is 45L and Market Value is 1Cr. I am looking for a loan from banks for 60L. How much should my Sale Agreement & Sale Deed (This drives the stamp duty and fees i pay to govt) be ?

            • http://www.nitinbhatia.in/ Nitin Bhatia

              Yes, its applicable for plots also. As i mentioned in previous comments pls let me know from which Bank/HFC you are planning to avail loan as rules are different for PSU banks and HFC. Bank will give you loan on lowest of Sale Agreement value or Sale Deed value. Ideally both should be same if you are availing loan from PSU bank whereas in HFC’s, these values can be different and you can get loan on Sale Agreement value though Sale Deed value can be Govt Guidance Value.

              • Sreenath

                Nitin

                I am planning to buy a plot & looking to consider banks where pre-payment charges are zero. I am considering Bank of Baroda & Axis Bank. How does these banks function wrt Sale Agreement & Sale Deed value.

                Also does banks offer home loan for buying a plot ?

                • http://www.nitinbhatia.in/ Nitin Bhatia

                  As per my understanding BoB will approve loan based on Sale Deed Value and Axis Bank will consider Sale Agreement Value. You need to check with banks as they have different criterion depending on project.

                  HFC’s provide loan for buying a plot but banks are providing composite loans i.e. for buying and construction. The products keep changing from time to time. Request you to check with banks regarding the same.

  • Samir

    Nitin, Excellent article. A derivative question which arises is this:

    Lets say the sale agreement value is 60 Lacs and sale deed value 45 lacs.

    Do I need to deduct TDS (section 194) since sale deed value is 45 lacs ? What is taken into account as consideration value for deducting TDS under the newly introduced section 194 ? Sale agreement or sale deed value ?

    Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      For the purpose of deducting TDS, Total Sale Agreement value will be considered i.e. 60 lacs in your case.

      • Samir

        Thanks a lot Nitin.

        • Sreenath

          Nitin – If my sale agreement is not visible to Register office or Tax bodies , what enforces us to pay TDS based on Sale Agreement ? What if i chose to pay TDS based on Sale Deed value ?

          Secondly – Will Sub registrar / Registration office enforce us to show the TDS receipt before registering it ? Or its not their job to mandate that.

          • http://www.nitinbhatia.in/ Nitin Bhatia

            Though Sale Agreement is not visible but total transaction value is visible to everyone and TDS is on total transaction value therefore TDS is on Sale Agreement Value if it is higher than Sale Deed Value

            Sub-Registrar office is not bothered about TDS as it is tax liability of buyer. TDS is sole responsibility of buyer and should be deposited within 7 days from the end of month in which TDS is deducted therefore TDS can be deposited after registration if you are receiving payment at the time of registration.

  • Neeraj Patil

    Hello Nitin,
    To share a point:
    In my case, i have gone for Home Loan with SBI.
    Total value of of property (Apt) is 60 lakhs. (including reg)
    Bank has asked for 2 docs (Construction agreement & Agreement of Sale)
    Agreement of sale is : 40 lakhs
    Construction cost is : 17 lakhs.
    Registration charges will be applied only to Agreement of sale amount i.e 40 lakhs.

    Bank has agreed to disburse the loan (80%) of the total amount i.e 60%.

    As you have mentioned that PSUs disburse 80% on the Sale Agreement.
    Can you pls clarify if your words are based on older procedures being followed up by PSU or recent updates?

    Thanks!
    Neeraj.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Just to correct PSUs disburse 80% of the Sale Agreement or Sale deed Value whichever is lowest. Ideally both should be same.

      Rules are different for under-construction and re-sale property. For under-construction property, disbursement is on total amount as rule says that construction cost is not included in the registration. Stamp duty is paid only on Agreement to sale but banks consider construction cost for loan if the buyer has signed agreement to build with builder i.e. builder is constructing the house on buyers behalf. In under-construction property by default sale deed value and sale agreement value are same.

      For resale there is no construction cost therefore stamp duty should be paid on total sale consideration but there is guidance value which is fair value of property as per Govt therefore in re-sale property, sale deed value is considered as sale value therefore PSU banks disburse only 80% of sale deed value i.e. what you are reporting to Govt. Actual sale might be at higher value.

      • Neeraj Patil

        thank you for clarifying the difference.

  • Priyankur Saha

    Thanks for this wonderful article.
    I am currently in this Catch 22 condition as I am planning for loan from SBI.
    I am looking for a flat of 1085 SqFt with market value of 3150/sqft and guidance value of 3070/sqft. Additionally, I need to pay 350000 for car park and amenities, 190000 for Electric and Water connection, 8.6% of Tax. Could you please tell how much loan can I get from SBI?
    Builder informed that SBI will provide loan for 80% of (1085*3070)+350000.
    But, I will be paying (1085*3150)+350000+190000, which is almost 43L except registration and stamp value.
    Does it mean that I will be paying more from my pocket in case I go with the SBI loan??
    Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You will be paying extra from your pocket to the extent of {3150-3070}*1085 = Rs 86800. Anyways no bank or HFC will finance 1.9 Lac for Electric & Water connection + VAT or ST (these components you need to arrange on your own).

  • Rohit

    Hi Nitin,

    Need some advice.I have purchased a Flat at Bangalore which cost me Total 37Lacs and have taken a Loan(25 Lacs) from SBI. Now the question is SBI mentioned Property should be registered as per the value indicated in the agreement. I will be paying 1 Lac extra if I go through SBI rule, and if I register through guidance value (i.e 1800/sft) then I will save at least 1 lac for Registration, is there any way, can go for guidance value registration?

    Please note 37lacs includes VAT+ST.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      For under construction property, 2 agreements are executed with builder i.e. Agreement to Build and Agreement to Sale. Total Value of Property equals to sum value in these agreements. Property is registered as per value in Agreement to Sale & this amount is normally as per Guidance Value.

      It seems in your case agreement to build is not executed with builder i.e. based on 1 agreement entire transaction is being executed. In short, you need to break the total cost into 2 parts so that you get loan on total value but the registration should be done as per Agreement to Sale (at guidance value). Please discuss with your builder.

  • Anil

    hey Nitin,

    I would like to say thanks to this wonderful post and very informative, precise and clear details.

    great work, great content.

    Keep up the good work which helps many land/property/house buyers.

    Thanks
    Anil S

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog. Keep Reading !!!

      • Anil

        Hi Nitin,

        I was thinking over, what benefit does the seller have.

        Lets consider an example of 1 cr house for resale,

        1. i will make an Agreement of 20L (20% of total to get loan of 80%)
        2. then i will do registeration and stamp duty at Govt Guidance value which is say 60Lac(for a 1 Cr property)
        3. so buyer makes profit on lower value

        so my queries are as folows:

        1. will seller be taxed (Capital Gains)on Final Sale Deed (which shows actuals ie 1Cr) Or he will be taxed for the amount on registration.

        if its amount on registration then how will he justify the 1 Cr in his account after deal is done.

        2. Also, while we do Stamp Duty and Registration, do we do weneed to show Sale Agreement (which has 20Lac mentioned) or will the officer ask for Final Sale Deed (which will mention entire amount 1Cr) Or the Registration office dont look for Agreement or Sale Deed Amounts(or they dont even ask for these)

        Thanks in Advance

        Anil S.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          The sale agreement value will be 1 Cr and sale deed value will be 60 Lacs.
          1. Seller will be taxed on Registration amount i.e. 60 Lacs (Sale Deed Value). You can make Deed of Transfer of Rights for the rest amount i.e. 40 Lacs. Click on following link

          http://www.nitinbhatia.in/real-estate/deed-of-transfer-of-rights/

          2. Registrar office is not concerned about Sale Agreement value and will not ask for same. Tell your lawyer to put intelligently in sale deed that you have paid rest 40 lacs for Home furnishing etc.

  • shrikantg

    I have completed the registration of my flat in a co-operative hsg society in Pune, in 2005. Under amenities the builder has provided us a gymnasium in a flat in the building. Now the society has applied for conveyance of the property with the local authorities. The authorities are asking the society members to pay stamp duty and registration for the gymnasium. Are common areas liable for stamp duty?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      No, Society members are not liable to pay any stamp duty on common area. It is builders fault that he has not declared the Gymnasium in Master Plan and evaded stamp duty on same. Any additional stamp duty for the property should be borne by the builder not by society members.

  • ag

    Dear Sir,

    i am buying a flat a resale flat in maharashtra
    property age is 7 months (from date of possession)
    will it be possible to get the discount in stamp duty, as property transaction is resale type?

    waiting for reply

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty is paid as per Govt Guidance Value / Circle Rate therefore discount is not feasible even if it is resale.

      • ag

        thanks sir,
        i have few queries related to that
        i am doing the things as per above article, only DOTOR is pending
        1) whether in registration fee, can we get such type of benefit?
        2) i have seen the first owners agreement with builder, it specify the car parking, but registration document won’t mention it exclusively
        they are having separate allotment letter from builder for parking allotment
        what should i do in this case?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          1. The benefit is available for both stamp duty and registeration fees.
          2. Any car parking allocated by association/builder to 1st owner should be mentioned in sale deed else you cannot claim it in future. Though he cannot sell the same but since it is allocated to him therefore he has to legally transfer exclusive car parking rights in your name by mentioning it in sale deed. You should also mention car parking no in sale deed to identify your parking space.

  • Brijesh bhatt

    Dear Sir,,

    I booked one flat in vadodara gujarat. Builder ace octve..Now flat is ready.

    He is saying that for dastavej i have to pay him 47000 rs….

    My flat cost is 20 lack rs.. Sir i am not understanding why this much less amount they are taking..

    I asked to builder then he replied to me this is under construction so only 47000.. if u pay once site complate then u have to pay nearly 1.25 to

    1.5 lakh..

    Sir this issue i am not understaning..

    I am stying in kuwait outside india..

    When i asked him… i have come there for dastavej .. so he replied no need to come…. just sign papers which he sent me..

    I asked him no need my photo to take in goverment office ?? then he replied no need.. only seller should be there.. no need buyer..

    Sir pls give your best advise to me.

    brijesh bhatt

  • http://www.nitinbhatia.in/ Nitin Bhatia

    Dastavej is nothing but agreement to sale/sale deed. Dastavej fees in Gujarat is 6% therefore you need to pay only Rs 12000 on 20 Lac. You may check with builder why he is asking more.

  • DD

    Dear Sir the vendor and purchaser have entered into Articles of Agreement in respect of a property (certain constructed area), the plan for which is yet to be sanctioned. The Parties entered into another separate Articles of Agreement for additional amenities. Stamp Duty is paid on Agreement for constructed area which is registered. Both the documents are cancelled by the parties by two separate Cancellation Deeds, before the plan could be sanctioned. Now the Stamp authorities are claiming Stamp Duty on Agreement for additional amenities,which is unregistered. How to convince the authority that the stamp is not required?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty is paid at the time of registration. If the amenities are not constructed & not registered than stamp authorities cannot demand stamp duty for non existent structure i.e. for amenities.

      As i understand correctly, stamp authorities are not asking for stamp duty on amenities but for vacant piece on which amenities will be build. If you have a property partially constructed and partially vacant than you cannot register only constructed area. The whole parcel of land + constructed area is referred as survey no should be registered and stamp duty should be paid. The stamp duty is paid for entire piece/survey no to stamp authorities. In your case, you have registered constructed area but not paid stamp duty for vacant land. It is different matter that later you can construct additional amenities on vacant piece & get it registered separately.

  • shyamal pal

    sir,
    i have purchased a flat at 34 lakhs but govt valuation is 24 lakhs.can i register my flat at govt value?

  • Kapil

    Dear Nitin,

    I have purchased a property of total value 78 Lakhs and executed an agreement with builder.

    I have following two queries –

    1. If I pay 1% TDS on all payments to the builder and declare the actual property value onto form 26QB, then in future will I be bound to register the property on declared value?

    2. Guidance value might come less than 50 Lakhs (not sure), so can i avoid TDS payment?

    3. On property loan from Bank, will bank deduct 1% TDS on all dispersement?

    Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. No, you can register property at Govt Guidance value. TDS under section 194IA has nothing to do with property registration.
      2. No, TDS is paid on total sale/consideration value.
      3. You need to check with bank. Some banks deduct TDS but it is buyer’s responsibility to deduct TDS if bank is not deducting.

  • DD

    Thanks Sir…

  • priya

    Hi Sir,
    I have acquired a property from my father and now have given the same for reconstruction with the agreement to construct g+3 building. In return I will get 45% share by the way of flat in 1st floor and 2 parking space and for the remaining area in the 45% share I will get cash.
    now my problem is that I want to know Few of the tax implications like:
    1) When will my Capital Gain Tax arise?
    2) How will I calculate FVC? will FVC be only the cash portion which I received?

    Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Capital Gain Tax arise at the time of Sale of any asset

      2. FVC or Full Value Consideration is total consideration for the sale of asset / property. It can cash or kind or both in exchange of an asset/property. In your case, it is both i.e. in kind and in cash.

      In case of exchange of an asset, for calculating Capital Gain you need to find Fair Market Value of the asset / property (granted in exchange).

  • AV

    Nitin, thanks for the excellent, informative post!

    We are evaluating purchase of an existing flat in Bangalore for 60 lacs. The guidance value for the property is around 32 lacs. The builder is requesting payment of roughly 40 lacs to an assignor, and 20 lacs payable to him (the builder.

    Are these payments subject to TDS even though I am not paying any single party more than 50 lacs?

    Secondly, should I be worried that builder wants me to split the payment in this manner i.e. between him and an asssignor who originally purchased the flat?

    Finally, at some point in the future when i go to sell the flat will the value shown in the DOTOR (60 lacs) be used as the cost basis for calculating capital gains,,, even though the property was registered for GV of 32 lacs.

    Thanks… And I look forward to your future posts.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Transfer fees to be paid to the builder is normally Rs 150 to Rs 200 per square feet. I am sorry to say this but Builder is fooling both buyer and seller.

      Irrespective of break up of payment, your transaction value is more than 50 Lacs therefore TDS is applicable.

      Split payment is not an issue provided its through cheque/DD and builder issue payment receipt for same. Secondly, it is clear in payment receipts for what the payment is being made to the builder.

      DOTOR is just a way to save Stamp Duty. it will be considered as cost to acquire property as total transaction value will include amount paid through DOTOR thus will help in reducing capital gain tax in future :)

  • RV

    Could you clarify if Stamp Duty on apartments is based on Market Value OR if the Government is satisfied if the duty is calculated on the Guidance Value even if the price paid is much higher. Is it any different for re-sale of apartments versus property developer selling to the first buyer?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is legally ok to pay stamp duty on Govt Guidance value.

      Stamp duty Rule is different for under-construction and re-sale property. For under-construction property, construction cost is not included in the registration therefore Stamp duty is paid only on Agreement to Sale / Sell with the builder. There is no stamp duty on Agreement to Build.

      For resale there is no construction cost therefore stamp duty should be paid on total sale consideration. The guidance value which is fair value of property as per Govt therefore in re-sale property, registration can be done at Govt Guidance value also.

  • Naresh Thakur

    In case of Builder allotting some flats to Land Owner ( Legal Heir ) towards agreed proceeds, is it necessary to registered those flats also ?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Yes, Builder allotment to Land owner is in kind in lieu of Land given by Land owner. It is mandatory to register the flat in your name.

  • ashish kumar

    Dear Sir,
    I have been reading your excellent posts on property related topics and today I have got a query
    I have selected a land for home construction in Lucknow, agreed price is 81 Lakh. Circle rate of the land is 35 Lakh.
    Now the issue is fund management, I have 35 Lakh available and need to take home loan for rest.
    Kindly answer the following
    1. Can I declare correct agreement value to the bank to get 50 Lakh loan and still pay stamp duty on circle rate of 35 Lakh
    2. Bank will transfer the money to whose account, mine or the current owner ?
    3. I am going with SBI, will they give me loan on circle rate or agreed rate?

    Please recommend me how should I manage the funds

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Answer to your queries
      1. YES
      2. Current Owner
      3. SBI will give loan on Sale deed value i.e. circle rate (If you decide to register property at circle rate to save stamp duty). In short you cannot avail loan from SBI if you are planning to register property at circle rate.

  • Blany Rosario

    Hi Nitin,

    I am planning to buy a flat in Bangalore the seller has not yet registered the flat.She bought it for 38lakhs during launch in 2010 and now I am buying it for 69 as now the flat is ready to occupy.

    The guidance value is around 45 lakhs in that area for that flat.Can I have a deed of transfer of rights agreement signed for the remaining 24L (69-45=24L).The flat has not been registered yet and there are no other miscellanous fittings in that apartment added yet.

    Kindly advise If I need to pay stamp duty on 69 Lakhs or can show only 45 Lakhs legally

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As flat is not registered therefore you cannot execute deed of transfer of rights. Yours is a transfer case.

      In your case, you will be signing tri-party agreement between builder, you and seller where flat will be transferred by current owner in your name. For under-construction property, construction cost is not included in the registration therefore Stamp duty is paid only on amount mentioned in Agreement to Sale / Sell of current owner with the builder. There is no stamp duty on Agreement to Build.

  • Sreenath

    Hi Nitin

    Thanks for these blogs and it’s wonderful to read some of hidden things which are not explained anywhere else.

    Say i have a situation (as buyer) where Sale Agreement is recorded for 1 Cr (Market Value) & i am registering for guidance value (60 L). Hence i end up paying Stamp duty and registration charges only for 60L.

    My questions are

    1. Does Govt (Registration Office , RBI or Income Tax) has visibility into the Sale agreement and money disclosed in that (1 Crore) ? I presume RBI has because banks issued loan based on Sale Agreement.
    2. Above leads to another question , does Seller needs to pay Capital gains based on Sale Deed (60L) or Sale Agreement (1Cr) ? I saw your response in other thread that it’s based on Sale Deed money but isn’t 40L visible to govt showing that Seller has evaded Capital gains ?
    3. Seller agrees to registering at Guidance value (60L) but what are the reasons why seller wouldn’t let me disclose higher amount in Sale Agreement (1 cr) ? Essentially i need more loan and hence i need to disclose more amount in Sale Agreement but what are the reasons why they wouldn’t agree for something like that.

    • Sreenath

      Hi Nitin

      Appreciate if you can respond to these questions.

      Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Income Tax Department & RBI has visibility to total transaction value that is why i suggested to execute DOTOR and notarize the same. As you are not hiding any fact from Govt and complete transaction is in white therefore there is no problem.
      2. 40 Lacs is not for cost of property but for furnishing of house (DOTOR) which is not included in cost of property. Sale Agreement is not transfer of title. Title is transferred through Sale Deed which is considered for capital gains.
      3. He would not like to show rest 40 lacs in white.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Income Tax Department and RBI has visibility to total transaction value that is why i suggested to execute DOTOR and notarize the same. As you are not hiding any fact from Govt and complete transaction is in white therefore there is no problem.
      2. 40 Lacs is not for cost of property but for furnishing of house (DOTOR) which is not included in cost of property. Sale Agreement is not transfer of title. Title is transferred through Sale Deed which is considered for capital gains.
      3. He would not like to show rest 40 lacs in white.

  • Vineet

    Hello Nitin,

    Great blog. I have a few questions:
    1. How do I find the guidance value of a flat i am planning to buy in Pune
    2. The flat I am buying is in resale, but is raw, so no woodwork or anything. How do I do a DOTOR on that
    3. When I sell it in the future (say that I buy it for 1 cr, 80 laks is Sale Deed and 20 is DOTOR). How much will be my cost of the flat for Capital gains, will it be 1 cr or 80 lakhs.

    Thanks…

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog..To answer your queries
      1. You will get the guidance value / circle rate from the sub-registrar office where the property is registered. It will be in psf. Add another 2 Lac for car parking to it.
      2. It is subjective, you can execute DOTOR
      3. One Cr

  • Shiv

    I bought a under construction flat on resale within 3 months of launch of the project and singed an Agreement to sell and got it endorsement from builder. Now my query is what is the stamp duty applicable on this property. is it on circle rate or agreement to sale

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Agreement to Sale or Circle Rate whichever is higher

  • Rajneesh

    Hi Nitin,

    In case of property transfer by execution of WILL of the deceased, will there be any stamp duty applicable?
    Location : Delhi

    Thanks in advance!

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty is NOT payable in case property is transferred through the execution of WILL irrespective of the value of the property

  • RAJU

    Hi, I just came across this enlightening article.
    I am buying an under construction flat in Gujarat for around Rs 25 lakh. builder has provided me the following agreements
    a) Agreement for sale : Rs 9.5 Lakhs
    b) Agreement for construction : Rs 8.5 Lakhs
    My doubts are :
    1) Can i show the remaining amount i.e. 7 lakh against DOTOR?
    2) Would my sale deed amount consists of “Agreement for sale + Agreement for construction+DOTOR”?
    3) Do i have to pay stamp duty on “Sale deed ” or “Agreement for sale”.

    Thanks in advance

    • http://www.nitinbhatia.in/ Nitin Bhatia

      To answer your queries
      1. Remaining amount cannot be shown against DOTOR. The remaining amount must be charged towards ST, VAT, Amenities, Registration etc which cannot be justified under DOTOR.
      2. For under construction property, Builder register property @ value in “Agreement to sell”
      3. As i mentioned property will be registered @ “Agreement to sell” value therefore sale deed stamp duty will be equivalent to stamp duty on “Agreement to Sell”

  • Parama

    Hi Nitin,

    Please provide your suggestion on a situation , where a seller is ready to sell a flat at a cost which is less than the guidance value for that apartment in that area ( because of the age and size of the property ) . Guidance value is around 5,500 psf and selling price is around 4,500 psf . So registration/ stamp duty charges will be high if we register at a guidance value . How can this be handled to save registration/stamp duty charges and also about the documentation, in case we are availing a bank loan for the purchase.

    Thank you,

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As per the rules, Property cannot be sold below Govt Guidance Value. Only solution is that you can appeal to Deputy Commissioner (Valuation) Revenue Department of your respective state under corresponding Stamp Duty Act of your state. If you will be able to justify that Govt Guidance value is high compared to market value due to XYZ reasons than Deputy Commissioner (Valuation) may allow you to register the property at lower value. For making this appeal you need to present the Sale Deed for registration in Sub-Registrar office and than refuse to pay Stamp Duty/Registration fees as per guidance value.

  • Guest

    Hello Mr. Nitin,

    Its worth to see all posts in this blog.

    I have purchased a flat in Ahmedabad and executed sale agreement which is registered at sub-registrar office. Due to some disagreement over various issues this deal is cancelled.

    Now my questions are:

    1. What are the cancellation charges involved in cancellation of registered sale agreement .

    2. Can this agreement be cancelled by a single party (seller or buyer individually) or need to be cancelled jointly, pls brief impact of registration charges. Also advise how to save on registration charges which is 1% of declared property value as per sale agreement.

    Thanks in Advance…

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog !!!

      To answer your queries i am assuming that Sale Deed is not signed yet.
      1. To cancel registered Sale Agreement. You have to execute Deed of Cancellation in Sub-Registrar office on Stamp Paper of Rs 100. There are no other charges.
      2. No, it has to be mutual. Both parties should agree to sign Deed of Cancellation. Reg Registration charges, I think you are referring to stamp duty paid for registration of Sale Agreement. The stamp duty paid for Sale Agreement is Non-Refundable.

      • Guest

        Thanks for your reply.

        So I do not have to pay a registration charges @ 1% for cancellation of registered sale agreement, right?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Yes you are right, you need not to pay 1% for cancellation. As i mentioned Deed of Cancellation can be executed on Stamp Paper of Rs 100.

  • neel

    Hi Nitin,
    I have bought a flat in 2012 from builder @ price of 28 Lakhs. But now when i will get possession then its value will be around 40 Lakhs. So stamp duty will be charged on 28 laksh or 40 lakhs.
    We have joint ownership of me and my wife. Now while registering can we do it only on the name of my wife. What is the rate rightnow in rajasthan for stamp duty and registration.

    Thanks in advance.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You must have signed 2 agreements with builder i.e. Agreement to Build and Agreement to Sell. Under construction property is registered at value mentioned in Agreement to Sell. You need to check value in Agreement to sell and also what is the current circle rate of the area. The registration value will be higher amount between Agreement to Sell or Circle Rate.

      You can change/transfer the ownership in builders record from Joint to your wife’s name. After this you can register property only in her name.

      Stamp duty in Rajasthan is 8% and Registration charges are 1% (Max 50,000)

  • S Chakrabarty

    Hello Mr Nitin, I have entered into a sale agreement with the builder for Rs 60 lakhs. But I want to register the property on guideline value, which is much less. Won’t there be a problem in the future if I want to sell the property, since there are two different values in the two documents?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Normally 2 agreements are signed with builder (a) Agreement to Build / Construction Agreement and (b) Agreement to Sell or Sale Agreement. The property is registered at Sale Agreement value which is normally guidance value. In your case, it seems builder has clubbed the two agreements, possibly property is ready to occupy.

      In resale property, you can register the property at lower guidance value and show the balance amount under DOTOR but in case of builder i don’t think so you can register at guidance value as you cannot show difference amount between sale agreement and guidance value under any head i.e. how will you justify the balance amount.

      • S Chakrabarty

        Hello Mr Nitin, I do have two agreements. But the Agreement to Sell value is much less than the Agreement to Build value and is also much less than the guidline value. The builder has agreed to getting the property registered at the guideline value but is getting a letter signed by me saying that I have decided to register the property on guideline value and that they are not responsible if there is any future problem. Cant I insist on a DOTOR from the builder as all my payments are white.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As i mentioned you cannot execute DOTOR for under construction property. In my opinion, you should go for full value registration to avoid any legal hassle i.e. cumulative value of transaction.

  • Avanish Gupta

    kindly answer..i ve booked one flat about 2 yr ago..but due to some
    approval issue builder was not able to complete the construction..now
    since he got the approval..he has issued the allotment letter , property ready to move in 2 month and value of the property mentioned in the allotment letter is same at what rate we have booked..but while showing the payment stages in the allotment letter (10%+95%+5%) he has taken past date at the time of
    booking…when asked he told, i coz your prop. was booked at that time
    and circle rate at that time was less compare to now..so we are trying
    to save some stamp duty…can you elaborate what he actually try to
    do..if i pay stamp duty on old rate and if i want to resale it,will i
    have to pay more capital gain tax or what other consequences . pls clarify.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Just to check, Have you signed any agreement with the builder? If yes then these agreements are registered or not. Also you signed these agreements recently (back dated) or 2 year back. I don’t buy builder’s justification that he is doing this to save stamp duty. Whenever you will go for registration you have to register property at circle rate even if the booking was done 2 years back at amount less than circle rate.

      • Avanish Gupta

        i have not signed yet..it Rs 100 stamp paper letter containing allotment
        ,possession & payment related things which i would sign. in this under the
        down payment installment payment plan of 95%, 5% they have mentioned the
        old date & year at the time of booking & down payment of 10%.
        when i asked they reply what i mentioned in earlier post. also kindly tell is it
        possible to register the sale deed with old circle rate since booking
        is done 2 year back as builder stated trying to do to save stamp duty
        and by this way is it not become my deemed income under IT Act based on
        recent amendments.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          If you accept old dates as payment dates then builder may impose penalty for delayed payment or may cancel your booking on account of non-payment. I am sure, he would have arranged back-dated stamp papers. Legally you will not be able to prove that back-dated agreement was signed on current date.

          The sale deed cannot be registered @ old circle rate. whenever you will go for registration, it will be at current circle rate. I am not in agreement with the justification of builder in this regard.

          • Avanish Gupta

            but allotment letter i received mentioned the current date of allotment and demand notice is also of current month..plus builder has approval issue thats why bank was also not funded at that time…dont u think these are enough evidence…but what actually their intention for back date is not clear??

            • Avanish Gupta

              one more thing at 2012 when 10% paid for booking circle rate was 2000psf which is now 2900psf…so at present property value at which we r going to purchase from builder is lower that stamp value based on present circle rate…so what value stamp authority take to register today when property cost (not FMV) is even less than stamp value??

              • http://www.nitinbhatia.in/ Nitin Bhatia

                Even if property value is lower then circle rate, the stamp value for registration will be considered at current circle rate by the sub-registrar office.

            • http://www.nitinbhatia.in/ Nitin Bhatia

              As i have not gone through documents therefore cannot comment why builder is taking this approach or what is the intention behind this move. You can check with builder regarding the same.

  • Rakesh

    Hi Nitin,
    I just came across your blog while looking for assistance online and I find it interesting to see your active support :)
    I am planning to buy a commercial shop in vadodara as a resale old property.
    I Want to what all government charges are applicable to me for this deal.
    Also, should I go ahead for DOTOR since the difference is good in actual value and guidance value because of old property.

    Thanks,
    Rakesh Motwani

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog. You may go for DOTOR. You need to pay stamp duty and registration charges. The rules related to transfer of commercial property are different for different states. I suggest you to hire a local property lawyer who can help in this transaction.

      • Rakesh V Motwani

        Thanks Nitin
        Should I go for posting an advertisement regarding purchase of the property since there is no link in between me and seller.
        And it should only be in vernacular or English or both?
        Also how much does it cost for stamp duty and registration in gujarat if a property will be purchased by a female.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          My apologies but i could not understand why you would like to place advertisement in newspaper. A “title certificate” from lawyer is sufficient.

          For stamp duty and registration charges, i would request you to visit the sub-registrar office. They will provide the complete details. Stamp duty charges vary from state to state.

  • manu

    Hi Nitin
    i am looking for an apartment in bangalore .
    heard that any transaction above 50 laks would attract 1% TDS

    The 50 lakh mentioned is agreement value or sale deed (Registration )value

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You are right. For any property transaction > 50 Lacs, the buyer should deduct 1% TDS. The TDS is applicable on agreement value (consideration value).

  • KARADIA

    Hi Nitin,
    I have my flat in out area of Pune-Maharastra. It is coming under rural area.
    We submitted papers and documents to one lawyer. He took some 3 months to tell us what are the charges. The apartment has not yet formed. The building has 8 flats. The lawyer now says the cost will be Rs.14000/flat. I.e. Rs. 11000 as registration fee per flat and Rs. 3000/flat as lawyer’s charges. The things seems fishy to me. Any idea about it.

    Thanks,
    Prithveesingh.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Please let me know the sale deed/registration value.

  • Nayan Chavda

    i am having property in Gujarat dist. jamnagar tal. kalavad i am going to transfer to my brother

    then how can i save stamp duty it nearly comes 2.5 laks at the rate of 5.90%

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can save stamp duty by executing gift deed or relinquishment deed in favor of your brother. The following conditions should fulfilled

      1. Property is not ancestral
      2. There is no money transaction/exchange involved
      3. You are Hindu by religion

      Stamp duty payable in Gujarat is according to Bombay Stamp Act, 1958 as applicable to the State of Gujarat. As per Article 28 of Schedule I of the Act, the stamp duty on gift deed is 3.5% of the market value of the property

      If above conditions are not met then you have pay 5.9% stamp duty.

  • Naresh

    I agreed to purchase a flat in delhi. A registered agreement to sell was executed. possession was handed over. Necessary stamp dulty was paid on the registered agreement to sell. Now the sellor has received the permission to transfer this flat from DDA. I want a regular sale deed to be executed in my favour. The question is whether full stam duty (payable on sale deed) is payable by me. Or i can pay only the difference value of stamp payable on sale deed minus stamp paid on agreement to sell.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      The stamp duty for sale deed is paid by the buyer. If the agreement to sell was duly registered then you may approach sub-registrar office to adjust the stamp duty paid on agreement to sell from stamp duty to be paid for Sale deed. After the approval from Sub-Registrar you may adjust.

  • khan

    Hello Sir,
    I have recently made sale agreement of 47lakhs for BBMP land in Bangalore for which LIC told they will give me only 70% (35 lakhs) of the final value including stamp duty. But The guidance value is only 32 lakhs, I will make sale deed next week.
    1. Can I make sale deed of 32 lakhs?
    2. Or If I decide to take only 30 lakhs loan from LIC, Can I register at 40 lakhs?
    Please guide me to save the registration charges.
    Thank you
    Khan

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. You can execute sale deed of 32 lakhs i.e. you can register the plot at guidance value
      2. This is also possible. You can register plot at any value between guidance value and sale agreement value.

      To save registration charges, you can register plot at guidance value

      • khan

        Thank you Sir for the quick reply, Appreciated.
        Whether LIC will agree? because they are giving me the loan of 35 lakhs which is more than the guidance value.
        Thanks in advance

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Loan will be approved based on sale agreement value i.e. 47 lacs. It is common practice in Bangalore. Sale deed value can be less then loan value. You may keep LIC informed about same. I don’t foresee any issue. All the best.

  • Pradeep Khare

    I am planning to buy a flat in Pune for 75 lakhs .I have verbally agreed to pay Rs 60 lakhs by cheque and Rs 15 lakhs by cash.The sale agreement will be for Rs 75 Lakhs only( I will pay Rs 50000 as token advance at the time of agreement) but the sale deed will be for Rs 60 Lakhs.Should I get the sale agreement registered or is it enough to get it notorised on Rs 100 stamp paper,and finally get the sale deed registered for Rs 60 lakhs

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can notarize Sale Agreement or can execute on stamp paper of 0.1% of property value. I will not suggest any cash transaction as it might create problem in future e.g. if you execute sale agreement of 75 lacs and register property for 60 lacs (15 lac in cash). In future the buyer may claim 15 lac again as there is no proof of cash transaction. I mean he may claim that 15 lac payment is pending.

    • Pradeep Khare

      Thanks a lot for your prompt and valuable reply.

  • Ashish Paroha

    Dear Sir,
    Greetings !!!
    Sir, i have recently booked a flat @1152 sqft in indore location. My final amount is going on 25Lakh, I have applied a home loan from SBI & as per my salary, bank decided to give loan upto 1740000 Rs. But my builder is asking up to 17000 Rs for complete loan process & 10000Rs for property insurance,So kindly suggest these last two amounts (Rs 17000 & Rs 10000)

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Property insurance is required by some banks but it is not mandatory to buy from builder or same bank. You can buy online property insurance on your own by paying just 2k-3k. You inform builder that you will insure property on your own after receiving possession.

      For home loan process, you may ask for breakup of Rs 17000. Once you will share the breakup, i will let u know what all you need to pay. Also you should pay directly to bank not to builder.

  • Samkit Shah

    Dear Sir, I have purchased the flat in Surat ,Gujarat for a consideration of Rs. 25 Lakhs and paid a part payment of Rs. 15 Lakhs. I have registered the agreement of sell with subregistrar, Surat. Now I want to cancel the said agreement to sell,
    what are the fees and penalties to be charged by the registrar

    Regards. Samkit Shah

  • Kushal

    Hello Sir, Recently I want to buy flat in surat, gujarat for approx price 0f 20 lakhs but builder is giving only registry of 12 lakhs if I want to increase registry can I do? And one more thing is remaining amount how to show?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      With builder sign 2 agreements i.e. agreement to build and agreement to sell. The property is registered on agreement to sell value and rest amount can be shown in agreement to build.

      • Kushal

        Thanks Sir

        • http://www.nitinbhatia.in/ Nitin Bhatia

          My pleasure :)

  • Sonya

    I want to ask our property is under redevelopment and our builder is putting a blame on us that he has gven uss 50 lacs cash and we r nt going wid him gr deed of cancellation an he putting a wrong blame on us he is showing one xeror paper wid our sign an done only notary an he is telling us ths so any suggestion wat we can asking were we can go an verify that these r fake documents he is making against us

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As i understand, you entered into a redevelopment agreement with builder but now he would like to cancel the same through deed of cancellation. You have not mentioned on what grounds he is seeking cancellation and also you have not mentioned the content of letter which he is showing to you. Also let me know whether you actually signed this letter or it is forged.

      • Sonya

        Itts abut the flat wich was gven to our builder fr redevelopment .but nw he blaming us that he has gven us 50lacs cash an flat has been soled to him but we have nt done that he is showing a xeror paper wid notary stamp an our signature is there but we have nt taken the mny he is lying an we r telling him to show the orignal he is dineying on that pls suggestions

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Don’t worry, a property can be sold only through Sale Deed. Any notary paper does not have any value. Also i requested you to share content of this letter and whether you signed it or not.

  • Raja

    I am planning to buy a flat at uttarpara municipality area and the approx value of the flat (inc car parking) is 40 lacs.What amount I need to pay for stamp duty and registration fee.Is there any option to reduce the amount.Please help me on a priority basis.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You need to check with Local Sub-registrar office. The stamp duty and registration vary even within same area.

  • soni khetan

    Hi Nitin,
    I bought a flat in Pune location and the market value of the flat is 47L and the circle rate is around 40L. we have paid around 2.4L as a stamp duty and 30K as registration charges.
    Could you please let me know where i can show the stamp duty and registration amount to get the tax benefit.
    As i googled , i found the only way to show it is 80c, is it?
    and 80c limit is only 1L that covers LIC and all investments already that is already exceeding.
    Is there any other way to show these amount to get its tax benifits?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can claim deduction on stamp duty and registration charges under section 80C for FY in which property is registered.

      Unfortunately you can claim these deductions only under section 80C

  • Ashwin

    Dear Nitin,
    Thank you very much,
    I have a question. My bank ICICI has agreed to give me loan on 80% of sale agreement value which is very good but also wants me to register my sale agreement at 0.1% of total sale value. I have heard that once we register the sale agreement at a certain value then sale deed must also be done at same value is that true? In such such case I would be caught up again.

    Thanks
    Ashwin

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale agreement is executed on stamp paper of value equivalent to 0.1% of total sale value. It is not registered.

      Only PSU bank like SBI insist that sale deed and sale agreement value should be same. In private banks like ICICI Bank, Sale Agreement is executed solely for the purpose availing Home Loan. You can register property at lower value i.e. sale deed can be executed at value lower than sale agreement value.

      Don’t worry on this part.

      • Ashwin

        Yes that seems to be case…Thank you…

  • Sonya

    Dear sir as we have already frwded my case tu would like to clarify once more on the issuse.itts a property wich was on old paggry system wich was discuss wid 12members &the owner an the builder to go fr redevelopment. We had a extra demand frm the builder frm the builder finally he aggred on 10lacs rupess as extra demand .The property’s common Mou was signed by all the members .Before signing ths wen we demanded are extra amunt (Agreed fr only our flat) he convinced us to sign the Mou quietly near the others as the other members should nt demand frm him.Later as ant wen were flats were vacceted he started ruining the enitre building structure (Note we made extra demand as our parents had paid fr the property to vacceted the earlier resdience who were are relatives but the other members who were staying frm last 40-50 years had almost nt paid rent ever since the live an the benfit offered to us an them.were the same.) Further we were the last onces reaming in the building to vaccet the house and nw the builder approach us and told us the extra ammunt would pe paid on the registratioon day we should nt further delay him and we should sign peaceful surrender off the said property widout writting on the possession letter that the property is surrender fr redevelopment and maid a sign his own drafted possession letter wich we signed an gave him in good faith and got a rent plus a relocation in a neary by area twolacs fifty in cash and Ten lacs as two chq was five lacs each and two lacs fifty thousand s a deposit amunt fr the relocation (Note he named Ten lacs as consideration fr the flat bank security instate) On our acceptence of these fifteen lacs rupess an leaving the house he immediately demolished the building in next two days.We nw started demanding fr the individual agreement fr the flat but he kept on postponing and also started sending us the rent in cash until four mnths.Nw wen we protested insisted to register the aggrement he stop picking our calls and blocked us onn all social networking sites.An gradually stopp paying us rent frm the fifth month then we file the RTI and sent him alegal notice through a lawyer but he didnt receive itt. Ths has been almost one and half years nw that we have nt receive rent yett but have received all RTI papers require .Recently four mnths back he has alleged on us that we have had a transaction of 12.5 lacs in chq and has presented in the police station and the bmc ward office forged sale deedof cancellation of property showing further cash transaction of 50 Lacs ( Note all in Photo Copy including showing my brother in law and his wife’s signature on a simple revenue stamp receiveng the same ) This property was intended to be in my brother in law his wife name. WE would like to guided by you on hw to gett law fully registered fr the said property and ur technical expertise wich will law fully bring the builder on are termsand loop holes of the builder in the above case plss guide uss..

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Law will go by the written agreement between you and the builder. Any oral commitment of payment etc cannot be proved in court of law.

      If property is in your brother in law and his wife’s name & builder has payment receipt that payment was made to your brother in law and his wife then unfortunately you cannot take any action as the builder is claiming that payment is made through cheque.

      If you feel the documents are being forged then as per law, it is your responsibility to prove the same i.e. on what grounds you are claiming the same i.e. signature is forged or you signed document under coercion etc.

      I suggest you to hire good property lawyer who can help in this regard.

      • Sonya

        Dear Sir , I think there is misunderstanding on ur side regarding thr recipet of chq ,we have recved only two chqs of rupees 5 lacs each and 2chqs of 1.25 each that’s all the chqs of 5lacs were as gven bank guarantee and chqs of 1.25 was gven fr relocation deposit apart frm ths there is no other check recvd frm the builder .builder has made a forge document of rupess 50 lacs as cash given in the name of my brother in law an his wife’s name

        And pls I request u to suggest name an number of a good property in mumbai chembur area..

        • http://www.nitinbhatia.in/ Nitin Bhatia

          If the signatures of your Brother in law and his wife are forged on payment receipt then your brother in law and his wife may file a case of cheating and forgery against the builder in local police station.

          • http://www.nitinbhatia.in/ Nitin Bhatia

            You have to file single case and make all concerned as party in this case.

        • Sonya

          Thanks fr replying sir.
          we have taken ths police station step but thehe have done all the manages in our area police station we went there to file a fir against this forge case but the investgation officers is telling that I have filed ths case as a Civil suite .Since there is no criminal activity sd by a police inspection incharge.
          So is itt possible to file a case again the landowner who is supporting builder as he signed in a police station as witness that we have taken 50 lacs frm a builder .

  • mubashir

    GOOD

  • Neel Patel

    Dear Nitin

    For example say if I am selling my property at 3 crores, but the seller insists on doing the registration at the circle rate which is 1 crore. So on paper, the property is 1 crore but the market rate and the transaction is @ 3 crore.

    Now there are two situations:
    1. Buyer pays me 1 crore in cheque and 2 crore in cash.
    2. Buyer pays me 3 crore in cheque.

    What would be implications for me and for the buyer in both of the above situations? Can I show entire 3 crore as my capital gains in both the above situations? I want everything in white and want to pay tax, but not finding buyers who wants to pay full white.

    Your views appreciated!

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I will suggest option 2. Assuming you are going ahead with option 2. If you are holding property for more then 3 years then you can take advantage of indexation benefit and capital gain will be Long term capital gain tax else capital gain will be short term capital gain tax. STCG will be taxed according to your income tax slab.

  • Mayank

    Sale deed charges and lease deed charges (for 30 years) are same or different in Chhhattisgarh? Please guide.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You may get this information from local sub registrar office.

  • Sunil

    Hi Nitin very informative article…I have a specific query that needs to be answered urgently:
    In UP, If I paid stamp duty today on the basis of prevailing market rate, but want to register my property on a later date after circle rate goes up next month.Will the stamp duty paid today be treated valid at that time? please reply. thanks in advance

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty cannot be prepaid for future registration. It is applicable as on date of registration.

  • Amol

    Dear Nitin,
    Who suppose to pay 1% Maharashtra VAT (MVAT) on cost of property registration , purchaser or builder? Also I’m bit confuse about who to applicable VAT on property under construction, builder or purchaser? there is SC verdict on Builder cannot impose VAT on purchaser – could you please help me understand it. Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It depends on agreement between builder and buyer. If nothing is mentioned in the agreement then registration cost will be borne by the buyer.

      VAT is payable only for under construction property. If the flat is ready to move in then VAT is not applicable. There is a legal loophole in this. The VAT is paid by the builder only but builder recover this amount from buyer and buyer sign the agreement to bear this cost. If builder and buyer mutually agree for this that buyer will pay the VAT cost to builder then Supreme court cannot do anything in this regard. If nothing is mentioned regarding VAT in your agreement with builder then builder will bear this cost.

      • Amol

        My agreement didn’t use word VAT in it but it has a following quote as a part of terms & conditions

        “The Purchaser hereby agrees that in the event o! any additional amount becoming payable, at any lime. by way of levies or premium o.r service lax or any other tax. by ‘whatever name called to the Central and for State Government and or a local Municipal Corporation and for any other authorities or bodies the same shall be borne and payable by the Purchaser only as and when levied. The said amcunt will be determined by Owner and such determination wall be final, Conclusive and bindìng on the Purchaser.”

        So I guess, this cover everything related to taxes, am I correct? I was not aware about this SC verdict on VAT or else I would have surely raised this concern at the time of booking. :(

        • http://www.nitinbhatia.in/ Nitin Bhatia

          This clause can be interpreted either ways…You can also interpret that it talks about any tax payable by buyer will be borne by buyer. VAT is payable by builder so you are not liable to pay VAT.

          Builder may interpret that any govt tax liability is of buyer.

          Legally you are not liable to pay VAT and you can challenge the same.

          • Amol

            Thank you Nitin, I will raise the VAT issue to builder.

            Another, do builder ever issues a proper “receipt” a one having a Service Tax, VAT no. printed on it? In my case, what I have so far received under “receipt” is receipt of Cheque and amount I have given.. “subject to realization of Cheque” –with a sign on revenue stamp. But builder haven’t given me any receipt stating “payment received”. This is a township by Mahindra lifespace in Nagpur, Maharashtra.

            I hear, Mahindra lifespace seems to have quite a good reputation in market , how legitimate their work is? You have any comment on them?

            • http://www.nitinbhatia.in/ Nitin Bhatia

              Builder will issue 2 separate receipts for VAT (Tax Invoice no and TIN) and ST (Tax Invoice No and ST registration no) details. Mahindra is a good builder.

          • Amol

            This is what I received as reply from developer.

            ” It is developers/builders liability to pay VAT / MVAT for bookings done from 2006 to 2009/10.
            The MVAT payment is owners’ responsibility as the property is owned by the person who has purchased the unit.
            Hence you are liable to pay the MVAT towards the registration along with the Stamp duty and Registration fees.
            Hope this suuffices your concern.
            Regards,”

            Should I push them further, to produce such documents stating VAT purchaser responcebility? How one would really fight / stand against a developer like Mahindra lifespace?

            What would be your sincere advise, stand against to pay VAT or just give up and listen what Mahindra dictates?

            • http://www.nitinbhatia.in/ Nitin Bhatia

              As per supreme court ruling, builder cannot pass VAT to buyer. Please check following link

              http://www.dnaindia.com/mumbai/report-builders-cant-pass-on-vat-to-flat-buyers-supreme-court-1894455

              In my opinion, you pay and buy the flat else builder may trouble you. Insist on separate payment receipt for VAT as i suggested earlier. Once you are through with purchase, send a legal notice citing Supreme Court Judgement to refund the amount collected as VAT.

              I am also shocked with the response of reputed builder like Mahindra.

              • Amol

                Thanks Nitin..

                They have put a clause in Sale Agreement that purchaser agrees to VAT and MVAT. And I am objecting and asking to remove this clause.

                Problem is I have already paid booking amount to Mahindra. I was late to come across your blogs :(.

                Even to the booking amount ..I haven’t received a receipt with Invoice no. and ST No. . but only a receipt of Cheque received.

                • http://www.nitinbhatia.in/ Nitin Bhatia

                  Unfortunately if you agree to pay the amount to builder then it is legally binding. You should insist on separate payment receipts for future reference.

                  • Amol

                    Yes, but now its time to sign “Agreement to Sale” and Register it. So my fight is to a remove clause of “purchaser agree to pay MVAT” to which Mahindra Lifespace is not responding properly.

                    Also, I’m raising issue of giving me a legitimate receipts of payments made. I never ever thought that a reputed corporate like Mahindra is also doing things same as crook local builders.

  • a k

    Suppose A bought a property in Rs 1o lacs in the year 2012 however that time basis on circle circle rate property cost was 6 lacs. now he is selling his property in 9.5 lacs to some other person B and cost of the property based on circle rate is 7 lacs. can B make registration of it on 9.5 lasc?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It can be registered at 9.5 lacs

  • Parag

    As you mentioned, the way of saving tax like this: by paying registration and stamp duty only on Guidance value is PURELY LEGAL , as we give rest of the money by cheque. Can you please confirm as I would like to purchase resale flat in bangalore and have a similar situation.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You should pay entire consideration value through cheque only.

  • ak

    Dear Nitin,

    I have finalised a vacant residential plot in Bangalore (under BMRDA Limit) and have paid the amounts by cheque and in white. The developer has given the option of registering:

    1. for the guidance value for Rs 750/- or
    2. for the actual price for Rs 1500/-

    Is there is any advantage other than saving the registration charges and stamp duty if I register for guidance value? What is the impact/advantage on income tax incase if:

    a. I sell this plot for > Rs 1500/- before 3 years
    b. I sell this plot for > Rs 1500/- after 3 years.

    Which is the better option (to go for guidance value or actual price), incase I wish to sell this plot, after 3 years/before 3 years and save income tax.

    Please help and advise, thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Except for stamp duty savings there is no other advantage of registering property at guidance value.

      If you sell before 3 years then you will be paying short term capital gain tax as per your income tax slab and if you sell after 3 years then it will be long term capital gain tax and you can by take advantage of indexation.

      Registration at guidance value will not help to save capital gain tax as total consideration value is Rs 1500. If stamp duty is not a concern then it advisable to register property at actual sale value.

  • Amol

    Dear Nitin,

    NIce article!
    One quick question, what if the land on which construction happening is lease one say for 99 years? In this case, Stamp duty is applicable, if yes why is it so? Thanks!!

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty is applicable as the stamp duty is paid for the transfer of title of property. The stamp duty for land lease is different.

  • Hemant

    Hi Nitin,

    Found your article very useful.

    I have a few questions regarding the numbers that will be considered for Tax calcualtions, especially the Long term capital gains (LTCG )tax

    Say A bought a house and registerd it for 30 lakhs 3 years back. A is now selling it to B for 50 lakhs.

    Now B is registering sale deed only for 40 lakhs.The figure 50 lakhs is present only in a sale agreement document .

    A receives the amount as 45 laks cheque and 5 laks cash.

    A does not want to get into any kind of legal issues with the IT depatment, so what would be the correct approach while calculating tax?

    a) A has to pay LTCG tax calculated with 30 lakhs and 50 lakhs .

    b) A has to pay LTCG tax calculated with 30 lakhs and 40 lakhs, 10 lakhs is considered as income and will be taxed in the normal high bracket

    c)A has to pay LTCG tax calculated with 30 lakhs and 40 lakhs, 5 lakhs is considered as income and will be taxed in the normal high bracket, the remaining 5 lakhs becomes unaccounted black money.

    d) A has to pay LTCG tax calculated with 30 lakhs and 45 lakhs , and 5 laks will be taxed in the normal high bracket

    e)A has to pay LTCG tax calculated with 30 lakhs and 45 lakhs , and 5 laks will be unaccounted black money.

    Please advise if any other situation is possible !!!

    also,In the eyes of IT department and in calculating tax does the sale agreement which is an unregistered document carry any value.??????

    regards,

    Hemant.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I never suggest any cash transaction to my readers. If a sale agreement is of 50 lacs then entire amount should be paid through cheque. For calculation of LTCG, 50 lac will be considered as Sale value.

      Though sale agreement is unregistered but all transactions are recorded by bank which should be justifiable.

  • Amit

    Hi Nitin,

    Nice Article,
    Kindly confirm the stamp duty percentage if case of registration in name of women (as single owner) in Ghaziabad, UP.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty is 6% flat in Ghaziabad irrespective property is the name of female or male. Registration charges are extra.

  • Vikas Dhumal

    Hi Nitin,

    In 1998 that is 16 years back We had paid the stamp duty and also have a registration receipt for a property but the document was not registered that time due to the unavailability of the builder and my father was also busy.Can we register the same document now if the builder is ready to come. We have a sign copy of agreement by the builder on the stamp paper.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If stamp duty and registration receipt is available the document must be registered. As per existing rules, an agreement should be registered within 4 months. You may approach Sub Registrar office to discuss your case, if Sub-Registrar allow then you can register.

  • sumit

    Hi Nitin,
    I have booked a flat with 15% booking amount of total flat value at Boisar, Thane dist , At present flat is under construction stage 60%. at this stage Builder is asking to do the registration of flat whereas but i have to avail bank loan from SBI, but necessary document like builder buyers agreement etc is not submitted to me for the processing of home loan as reqd. by SBI.
    What to do shall i go for the registration of flat without loan approval from SBI bank. Is it the correct procedure to do the flat registration without completion of the constructive building/flat PL suggest.

    Sumit

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is advisable to get your Home Loan approved first before registration. In normal scenario, property is registered either at the time of possession or when it is nearing completion i.e. 90% completed.

  • sumit

    Hi Nitin,
    To get the home loan approved bank is asking for buider buyer agreement copy for the processing of loan, same has been communicated to builder.But Builder is is not providing the same after lots of follow ups stating in Maharashtra state buider buyer agreement is being not done & required, only registration is being done prior to bank loan approval. what to do.
    Sumit

    • http://www.nitinbhatia.in/ Nitin Bhatia

      2 agreements are signed with builder i.e. sale agreement and construction agreement. Bank need both documents to process Home Loan.

  • Bikash Bhanu Roy

    Hi Nitin,
    Can you give some idea about a gift deed and the rates for the same in West Bengal…..and is there any provision for saving the charges…
    Bikash

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Gift deed is transfer of rights and interests in movable or immovable property voluntarily without any consideration.

      In WB, If gift deed is executed in favor of family member then stamp duty is 0.5% of the market value of the property. In case beneficiary is non-family member then you need to pay 5% (Panchayat Area) or 6% (Municipal and cooperation areas) + 1% if property value is more than 25 Lakhs.

      You have to register gift deed and stamp duty cannot be saved.

  • Amiya

    if sum1 pays stamp duty as per the old circle rates,which section of indian stamp act is violated?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      A Lawyer can help in this regard as i am only into consultancy service.

  • Dipak

    Hello Nitin Sir,
    Can i get refund of stamp duty and registration fee if agreement to sell got cancelled?
    if yes then what is the procedure for that?
    Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty & registration fees is refundable provided Stamp paper is not used at all in any manner or nothing is written on it. It seems, In your case sale deed was registered therefore stamp duty is utilized. In such a scenario, Stamp Duty & registration charges are non-refundable.

      You may recover the loss from seller through civil suit but it will depend on what grounds the sale deed was cancelled.

      • Dipak

        Thanks for information.
        Its Regariding resale flat.
        Actually we did agreement to sale in last month. but actually due to some technical isssue home is not getting sanction or approved. issue is bulider made some changes once plan was sanctioned. Physically 1RK is there but in the blue print 1BHK is present. Current owner is paying tax is current area (1Rk) . other documents are clear(Collector NA TP sanctioned…). now banks are not providing loan due to this issue and asking for revised plan. but we had discussion with owner about this but he told it will take time and its very costly to reproduce to blue print.
        Can you please suggest us how to get loan.
        If you know any finance company name to provide loan even this blue print issue.
        we have paid 2.5 lc. to owner and also paid 1,40,000/- for stamp duty + reg. fees. This stamp duty and reg. will get refund?
        Please let me know your thoughts on this.
        Thanks.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          It seems there is major deviation from approved plan therefore availing Home Loan is very difficult.

          You have not mentioned whether stamp duty and reg charges are paid to govt or not. If they are paid to registrar office and property is not registered, you can claim the refund.

          If you have paid the stamp duty and reg to owner and property is not registered then you can claim refund from owner.

          • Dipak

            Hello Sir…
            Could you please tell me about GRUH finance ltd.?
            They told me that they will provide me home loan(ROI 10.50%)?
            Can i go with GRUH finance?

            Thanks

            • http://www.nitinbhatia.in/ Nitin Bhatia

              In my opinion, you should approach banks like SBI, Bank of Baroda, ICICI Bank or Axis Bank for Home Loan.

  • Ram

    Dear Nitin Sir,

    Thanks for your valuable blog. My query is:

    I have bought a villa at Rs.46 Lakhs, and I requested medications to basic plan and the total value of the villa came to Rs. 61 Lakhs. The plot area is 1450sqf & Built-up area 2500sqf. The villa comes under Bangalore outskarts where the guidance value for land is: 450psqf & guidance value for builtup area: 990psqf. If we go with the guidance value the total villa value would be around Rs. 30 lakhs. I have seen some people registering only the land and not the built up area, even though they have constructed the villa on the land. Is this practice legal?

    My sale agreement has villa value as Rs.56Lakhs and buildup area as 2500sqft.

    Request your valuable inputs on how I can save money with the registration.

    Thank you,

    Ram

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I am assuming that it is gated community with villa plots. Please let me know who is constructing the villa, builder or buyer.

      • Ram

        Thank you sir for the response. Yes, it’s a gated community. The builder has constructed the villa. Requesting your inputs.

        Thanks.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Great..since it is being constructed by builder then in all probability you must have signed 2 agreements with builder (a) agreement to sell / sale agreement and (b) agreement to build / construction agreement

          Normal practice is that property is registered on value in agreement to sell which is usually cost of land. The construction agreement value is not included in registration therefore if you have signed 2 agreements with builder then it is perfectly fine to register only the land i.e agreement to sell and you can exclude value of agreement to build / construction agreement from registration.

          In case you have signed only 1 agreement with builder then i will suggest you to register the property at total value in your agreement with the builder i.e. include construction cost for registeration.

          • Ram

            Yes, I signed only 1 agreement..so I guess I have pay more for the registration
            Thank for your answers…they really cleared lots of confusion.

  • Dinesh Goyal

    Dear Nitin,
    Do I need to pay stamp duty / registration charges on EDC/IDC & car parking in Gurgaon ?
    Is it written somewhere in HUDA guidelines ?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      EDC or External development charges is levied by the developer from the buyer for developing infrastructure within the complex whereas IDC or infrastructure development charges is levied by the govt on the developer and developer in turn pass on to the buyer.

      Though there is still no clarity whether to include EDC and IDC charges while calculating stamp duty and registration charges. Some builders like OMAXE is not including whereas BPTP is including these charges along with BSP.

      In my opinion, property can be registered by paying stamp duty and registration charges on BSP + Car Parking + PLC. EDC and IDC can be excluded from stamp duty and registration charges.

      • Dinesh Goyal

        Dear Nitin,
        Thanks for the information.
        Does it mean that there is no clear guideline from Haryana government on the same ?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Yes

  • Shetal Shah

    Dear Nitinbhai,

    I have bought a flat at Vadodara. We need to do sale agreement of Rs. 31,00,000/-. Can you guide me how much will be the Stamp Duty Fees and Registration for the said amount. Flat is in my name, so no incentive expected. Please guide.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp duty in Gujarat is 4.9% and registration charges are approx 1%.

  • pinak

    Dear Sir,

    I am buing a property in guwahati, the seller is staying in chennai, my q is that , can i do the sale agreement in chennai , and than do the registration of the propery in guwahati. And will the seller would be able to get sale permision from guwahati , assam on the basis of sale agreement register in chennai.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale agreement should be executed where the property is located i.e. in guwahati

  • Roshan

    Dear Sir, My friend purchase one row house in sindudurgh, Maharastra for 35 lacs market value,. he paid 30 lacs by cheque and 5 lacs by cash to builder. He paid stamp and registration duty only on 30 lacs. One week later his neighbour purchase next to him for 35 lacs (same carpet and build up area as per my friend) and all payment he made by cheque. Even he paid stamp and registration duty only on 35 lacs. My question is, Their will be any problem for my friend or the builder? Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I don’t suggest cash transactions in property purchase. I don’t foresee any legal problem as such.

  • Amit Singh

    hi nitin I ant to ask what is stamp duty and regsitration rate in Noida UP

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Recently stamp duty and registration charges are revised in UP. According the revised rates registration charges are 2% of the total cost and the stamp duty is 12.50%

  • mukesh agnihotri

    dear sir, what would be amount of money required to get the housed transferred under gift deed from father to son for a registered house in ghaziabad?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      The stamp duty vary from state to state and also differ if gift deed is executed between blood relation. You may approach sub-registrar office to find out exact stamp duty applicable in your case.

  • gvivek

    Dear Nitin, Can you please answer a few of my queries. I have bought an aprtment with sale agreement (~28 lakhs) and construction agreement (~22 lakhs + around 10 lakhs for amenities, VAT, service tax, etc) = total 60 lakhs.
    1.) Do I need to register only for value in sale agreement (28 lakhs)?
    2.) If yes, then after a year, if I sell it for 60 lakhs, then actually I earned nothing, but still as the buyer will register at 60 lakhs, do I have to pay tax on captal gain on (60-28 = 32 lakhs)?
    3.) If yes, then is there any way to save this ingenuine capital gain tax?

    • gvivek

      Just to add into above question, the apartment bought is in Bangalore, area comes under BBMP.
      4.) If answer to Q1 is yes, then, Is all the registration and stamp duty only on sale agreement? Or is there anything to be paid on construction agreement also (apart from VAT and service tax)?

      • http://www.nitinbhatia.in/ Nitin Bhatia

        4. Stamp duty and registration charges will be applicable only on sale agreement.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Not necessary. You can register at full value also
      2. Cost incurred on construction will also be eligible for tax exemption under Section 54 of the Income Tax Act therefore your STCG will be Zero.
      3. NA

  • Shilpa

    Hi Nitin, I have a villa under construction and have applied for a home loan from HDFC. I have paid processing fees and am getting ready for the first disbursement. HDFC now says that Stamp Duty is payable as per the Karnataka Stamp Act at the rate of 0.1% of Loan Amount subject to
    minimum of Rs.500/- & maximum of Rs.50,000/- at the time of or before first disbursement of Loan by submitting a Non-Judicial stamp paper/e-stamped paper purchased in the name applicant. I had previously taken a home loan from AXIS Bank and they did not ask me for it.

    Can you please give me more clarity about the stamp duty.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It seems you are referring to MODT (Memorandum of Deposit of Title). Memorandum of Deposit of Title Deed (MODT) is an undertaking by the borrower that he has deposited the title documents of the property with the bank at his own wish and will, in order to secure the financing obtained from the bank. Govt levy stamp duty on this document to register the same…Charges vary in Karnataka are 0.1% Home Loan amount. Stamp duty for MODT is borne by the Borrower.

      • Shilpa

        Nitin, Is this required for a house under construction? I still have not got the position of the house and the registration is not yet done in my name although the e-stamp of the property has been done at the taluk, HBA signed and a tripatriate agreement. Is signing a MODT really necessary? Why do other banks not ask for it?

        On the other hand, if i pay stamp duty now will it be adjusted against the stamp duty to be paid at the time of property registration?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          MODT has no co-relation whether property is under-construction or resale. It relates to mortgage status of property. Executing MODT is absolutely necessary as it also safeguard the interests of borrower in case of any future dispute.

          All lenders charge for MODT, some smartly club it under processing fees and others like HDFC show transparency and charge separately.

          Stamp duty towards MODT cannot be adjusted against stamp duty to be paid for property registration.

          • Shilpa

            Thank you Nitin.

  • Puneet Makhija

    Hi Nitin, we bought a flat in crossing republik in Panscheel . 1430 sqft. It is a new property under my wife’s name . Single owner . The builder gave us the registration amount as 306400. He said that by paying cash the work will be done in 3-4 days and if we go with demand draft will take 10 days . Please provide your guidance …

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I will not suggest cash dealing. You pay through DD. You have to prepare 2 DD’s i.e. one for stamp duty and second one for registration charges. DD should be directly in favor of Sub-Registrar. Also seek payment receipt from builder issued by sub-registrar office against payment of stamp duty and registration charges of property.

      • Puneet Makhija

        thanks Nitin. How to find The correct circle rate of crossing republik ?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You will get from local sub registrar office.

  • meenag

    Hi Nitin, I purchased a under construction apartment for 95 lakhs + service tax. About 90% of this amount has been paid to the builder with the remaining 10% due by the time of possession. I wanted to deduct TDS @1%, but the builder is saying that TDS is payable only on the guidance value of approximately 60 lakhs. Can I land in to problems due to this?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      TDS is applicable on consideration value to acquire immovable property. Property can be registered at lower guidance value but TDS should be deducted on consideration value of property only. You can exclude only Water, Electricity, Maintenance, Service Tax and
      VAT from total value to arrive at final consideration value. The total
      consideration value will include charges paid towards amenities.

  • Mohsin

    Hi Nitin, l want to ask you that how I save stamp duty on a purchase of flat….? (In Mumbai)

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You may check my above post.

  • abc

    Hi Nitin,

    i had purchased a property last year but had not registered it, rather It is on power of attorney.
    1. Kindly let me know what are the disadvantages.
    2. I am currently going to sell it to another party, will I need to get it registered first?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. As per ruling of Honorable Supreme Court of India, any property transaction executed through power of attorney is null and void therefore in layman terms you are not the owner of property
      2. You need to register in your name first.

      • abc

        Thanks Nitin for your response.
        Further, do I need to ask the builder from whom I had purchased to be available for registration process.
        Right now I am in the middle of the process for transferring of this property to someone else. Kindly suggest me what should I do right now.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Builder will transfer/register property in name of current GPA holder and after this transfer, current owner will transfer/register in your acquaintenace’s name.

  • Arti

    Dear nitin,
    Please guide me regarding stamp duty n registration and gift or sucession deed.
    My flat is registered on my name and my son is the joint owner. My age is 72 years and I want to transfer my share to my wife.how can I do it and can I do it through a sucesdion deed or gift deed to save some money.
    Please guide me into this.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      stamp duty and registration charges for gift and sucession deed vary from state to state. You may check the same from local sub-registrar office.

      • Arti

        Nitin can I do it through sucession deed even when I am alive

        • http://www.nitinbhatia.in/ Nitin Bhatia

          A succession deed cannot be executed when a person is alive. The cost effective way at this point is to execute a WILL in favour of your wife & register it.

          Fool proof way is to execute gift deed in favour of your wife and pay stamp duty.

          • sunil shinde

            Dear nitin,
            I am buying a new house and selling my old house in pune. I am getting 1 cr 5 lakhs for my house, registering it at 75 lakhs.
            I am buying the house at 1 cr 10 lakhs. Registering it at 80 lakhs.

            What all things i can do to save tax and stamp duty registration. And what income tax or any other tax i will be liable to pay.

            Also ppl told me i will have to deposit some money in bank which i can get as refund from income tax.

            I am a senior citizen my age is 72 pls tell me how can i proceed.

            Thanks

            • http://www.nitinbhatia.in/ Nitin Bhatia

              I have already shared in my post on how to save stamp duty by registering property at circle rate / guidance value / ready reckoner rate. For the property you are buying, you need to deduct TDS at 1% and deposit.

              Reg sale of property, to calculate capital gain i need details like date of purchase, date of sale, expenses incurred on sale and purchase, any expenses incurred on improvement etc. As you are buying a property therefore capital gain from sale can adjusted against investment in another property.

              I suggest you to go through articles posted by me on my blog as i have covered almost all the points mentioned by you through various posts.

  • Umesh

    Dear Sir,

    I purchased flat in 2012, August at 40 Lacs (36 Lacs + 4 Lacs Stamp Duty, Registration, Brokerage) in Navi Mumbai (Kharghar), now I am reselling this flat for 48 Lacs

    Please advise, how much I need to pay capital gain tax after selling this property.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As you are selling within 3 years of purchase therefore it will be short term capital gain/loss and you will not get indexation benefit. In this transaction you will incur a short term capital gain of 8 lakh. This amount will be taxed as per your income tax slab.

      • Umesh

        Sir, thank you for your reply. As per my research on internet, I found some articles where calculation of Capital Gain is calculated as below. Sir please guide if this is correct or wrong?

        Capital Gain = Sell Price – Indexed Purchase Price

        Indexed Purchase Price = Purchase Price * (CPI for current year / CPI for year of purchase)

        Indexed Purchase Price = 40 L * (1024 / 785) = 5217835

        Capital Gain = 48 L – 52 L = NIL

        Thanks in advance.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          This calculation is for long term capital gain and is applicable if you hold property for more then 3 years. As i mentioned in my comment since you are selling within 3 years of purchase therefore in your case it will be short
          term capital gain/loss and you will not get indexation benefit

          • Umesh

            Thank you sir for clarification

  • Amit

    Dear NITIN,

    I am about to purchase a resale flat thru an estate agent. The flat possession has still not been received by 1st buyer but he has a registration and sales deed. Plus this flat is less than a year old. Estate agent says I can get stamp duty exemption on this property as the buyer is agreeing to forgo it. Is this possible? What are the things I should consider here. The overall flat fixed cost is 74 lacs approx and stamp duty is approx 3.5 lacs. Pls advice. Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Agent is misleading you. Stamp duty exemption is not possible, its another case that seller will bear this cost. Also please check why the seller has not taken possession for 1 year. I have doubts on title of property.

      • Amit

        Sure NITIN. Thanks for the tip. I shall check. What docs I need to verify from seller in this case to ascertain true ownership etc. also, just to clarify the builder has just got OC and waiting for MSEB clearance before which possession can be given to seller. I have 2 options either to buy from seller or directly from builder. But surely seller is quoting lower price and also service tax and vat is not payable. Am I correct in my assumption? Also, is property tax payable at this stage? Please guide.

  • Prakash

    Dear Nitin,
    In Bangalore while purchasing an apartment if an agreement to sell ( for UDS /land) and an agreement to construct is entered into , and the actual sale deed getting registered in the registrars office is only for UDS and its value , does the agreement to construct have to be registred at the Registrars office as well?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Not necessary.

      • Prakash

        Thanks for the response Nitin, i have a further query , how will the title of the apartment get transferred if that is not getting sold in the sale deed ? and also the construction agreement is not getting registered.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Title transfer of SBA and UDS which is mentioned in the sale agreement.

  • Murali

    HI Nitin,

    I am planning to buy a individual house(resale) in AP(Telangana). It is of 200 sq. yrds land area and 2500 sft built up area. So, how can I calculate the registration charges for it.

    The govt cost for per sq yrd is around 7000 ruppees.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You need to check in local sub-registrar office.

  • Nitin

    Hi Nitin,

    I am planning to buy a resale property in Pune which cost me around 27 lacs, how much stamp duty, registration charges and extra charges I have to pay.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp Duty is 7% and Registration Charges are 1% in Pune.

      • Nitin

        Hi Nitin,

        What are the other charges and how much I have to pay if I buy this property.

        Thanks
        Nitin Ranjan

        Subject: Re: New comment posted on How to Save Stamp Duty & Registration Charges

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You may check your agreement. For registration only Stamp Duty and Registration Charges + Some miscellaneous charges for EC etc.

          • Nitin

            Is bank loan depends on circular rate of the property or what seller has fix for it?

            • http://www.nitinbhatia.in/ Nitin Bhatia

              Bank Loan will depend on Sale Agreement / Sale Deed Value. In case of SBI, if you register property are circle rate then SBI will approve Home Loan only on based on circle rate whereas Private banks will consider Sale Agreement value.

  • pawan

    I m going to purchage a second hand i10 car. Will u please tell how much i have to spent for transfer the ownership in punjab

    • http://www.nitinbhatia.in/ Nitin Bhatia

      My apologies, i do not have expertise in automobile segment.

  • Vipin Gupta

    Hi Nitin,

    Trust you are doing great.

    I’ve bought an under construction apartment in Bangalore for which possession is nearing and soon I would be doing the registration for the same. I got to know through your post that stamp duty+reg. charges in Bangalore should be around approx. 7% of the property cost.

    I’ve bought this apartment for 50 Lacs (breakup below):

    +2800 Rs/Sqft * 1500 Sqft = 42 Lacs (basic sale price at market rate)

    + Car Park = 2 Lacs

    + Club Charges = 1 Lac

    + SWS Charges (i.e. VAT+ST+Elect+Water) = 5 Lacs

    Total of 50 Lacs

    Case-1: SD+ Reg on Market Rate – Together it should be coming around 3.5 Lacs considering 2800 Rs/Sqft of market rate.
    – Q1: I need to know, if the calculation is for SD+Reg? Or do I need to consider add/delete something in calc’n above)

    Case-2: SD+ Reg on Circle Rate – Together it should be coming around 2.45 Lacs considering 1800 Rs/Sqft of market rate.
    – Q2: I need to know, though it’s a difference of 1.05 Lacs, which kind of registration is beneficial in a longer run (in terms of legality, hassle free, and from point of view of selling-off a flat after 5 years).
    – Q3: I need to know, does it really make any difference between 2 of these kinds? Kindly highlight pros and cons for both types if any?

    In my case (also as it happens in Karnataka) registration is happening post possession of an apartment and by this time the loan amount which has been availed as 80% of Sale Value (i.e. 40 Lacs) has already been disbursed to a builder by a bank.
    – Q4: I need to know, does this block an option of going ahead with Case-2 for me?

    Kindly advice. Also add in case if am missing on any nitigrities.

    Thanks in anticipation.

    Regards,
    Vipin Gupta

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Club Charges and SWS charges can be excluded
      2. Both are perfectly fine. There is no legal hassle if you register at circle rate or at market rate
      3. As i mentioned there is no difference between two
      4. No

      • Vipin Gupta

        Many Thanks Nitin.

    • Guest

      Many Thanks Nitin. Appreciate that :)

  • Harishankar

    Hi Sir,

    I want to know, to buy DDA flat scheme 2014 can i get 100% loan of total flat cost from bank.
    Regards
    Hari

    • http://www.nitinbhatia.in/ Nitin Bhatia

      100% Home Loan is not feasible from any of the banks.

  • sachin walke

    sir, it is neccessary to pay stamp dutty and registration amount online at single time?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Stamp Duty and Registration amount should be paid through DD or Banker’s name in the name of sub-registrar at the time of property registeration.

  • reshma

    hi sir
    i need advice my parents they sold the land and taken 15lakh for advance remaining will be taken during regostration thats after 3months now thy have decided to keep the land and sale the house..so is it possible to make deal.we are ready with the cash as we have sold the house to give them back thr money with little compensation but they are
    saying we have to give them double of what they gave as its mention in papers…pleas guide..how to save our land with less compensation

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You need to check the terms and conditions mentioned in the agreement between your parents and the buyer. If it is mentioned that in case seller back out from deal and he/she need to pay double the advance amount paid by buyer then you need to follow the same else it will be breach of contract. If nothing is mentioned in the agreement then you can cancel the deal by terminating the agreement and return the advance paid by the buyer.

  • Kalpesh

    Hello Sir,
    you have given awwasome information.
    I am staying in near pune and bought a row house in resale.
    Seller had bought the property on 30 march, 2014.
    Is there any rule in maharashtra that we need not pay any stamp duty if the privious sale agreement is done before completion of 1year.

    Thank in advance.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      There is no such rule. Stmap duty is applicable for all property transactions.

  • janarthanan

    Dear Nitin,

    We are about to purchase the ready to occupy flat in chennai, Situation here is :

    1. Seller booked the flat in 2010 at 21 Lakhs and its available for possession, Since he wants to sale the same, didnt registerd the property.

    2. But current market value of flat is 38 Lakhs and Bank has approved the 30 Lakhs, I need to pay remaining 8 lakhs as down payment via Check.

    3. Seller will initiate the Name transfer request with Builders once we execute the agreement, so that it will be register in my Name as first Owner.

    Now we are about enter the agreement with current market value 0f 38 Lakhs.

    My question here is

    Q1. Will the builder register the propery as agreement vale(38 Lakhs) or actual value (21 lakhs) at the time of booking.

    Q2. If it registerd at 21 Lakhs, Will the bank provide the whole approved 30 Lakhs by considering agreement value(38) or 80% of 21 lakhs.

    Q3. How much stamp duty needs to be paid agrrement value(38) or registered value (21)

    Q4. whether the bank issue check in the name of seller or the builder.

    Q5. Is it legal to do like registering the flat at 21 lakhs and the business value of the deal is 38 Lakhs.

    Kindly advise me What are the legal implications by executing this and Do’s and Dont’s.

    Regards

    Janarthanan

    • http://www.nitinbhatia.in/ Nitin Bhatia

      This is transfer case therefore You should not enter into direct agreement with seller as seller is not the owner of property tecnically. In this case, a tri-party agreement will be signed between you, seller and builder.
      1. In all probability builder will register at 21 lakhs to save stamp duty
      2. SBI will not provide but private banks will approve loan based on tri-party agreement
      3. You need to check with local sub-registrar office as stamp duty vary from area to area
      4. It will depend on share of builder and seller in this transaction
      5.Yes

      • janarthanan

        Thanks for your valuable reply

  • sgupta9

    Dear Nitin,
    First of all thanks for taking your time out to answer each and every specific query. Impressive indeed!
    I wanted to seek your advice re: a recent transaction I am current doing in Gurgaon. The case is that I have bought a property in resale from a seller who had this property in joint name (himself and younger brother). Since he wanted the money to only come to him from this transaction, he got his brothers name deleted from the agreement by giving documents to Unitech. To verify this, I had personally visited Unitech’s office and they confirmed the other name has been deleted and moreover in the sale deed I have got the point explicitly mentioned that younger brother will not have any claim on the property later and had him as one of the witness to the sale deed. I have two main questions:
    1. The safeguards I have taken to ensure that I do not have any problem due to joint names, are they enough? If Unitech confirms that one name has been deleted and moreover if they transfer it in my name, wouldn’t that cover me enough legally? Any other thing which I need to do?
    2. Stamp Duty : The seller bought this flat at 3,500 psf while I am paying 8,200 psf and also the circle rate is ~ 5,000 psf. Since this is a transfer case, the builder-buyer agreement remains the same and only my name gets endorsed as the owner. So, the question is do I need to pay the stamp duty at the time of possession (12-18 mon further) at circle rate or at 8,200 psf?
    Thank-you in advance,
    Sandeep

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. I would like to know whether seller has executed any addendum or revised agreement with unitech after deletion of his brother’s name. Secondly, is there any record of payment exchange between 2 borthers for this property. Thirdly, has unitech issued any written communication to you regarding change in ownership pattern.

      2. Stamp duty is applicable on value at which property is registered therefore you can discuss with builder. If unitech agree to register property at circle rate then you need to pay stamp duty on prevailing circle rate.

      • sgupta9

        Nitin – On the builder-buyer agreement, it has been “endorsed” by Unitech that the name of one brother has been deleted and the property remains in the name of the other brother. Since, I have not yet bought the property the new builder-buyer agreement was issued to seller who showed me a copy of that.
        No, there is no record of payment between the brothers and neither would they be willing to share it with me.
        Finally, in my last meeting Unitech has said that they will register it at the higher of circle rate or the rate at which property has been sold. So, I think I will have to pay the stamp duty at the higher rate since there is no cash component.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Prima facie everything seems good. To safeguard your interest, i will suggest
          (a) Include financial indemnity clause in your sale deed to be provided by seller. If not feasible to include in sale deed then take separate financial indemnity bond from seller for any claims arising from his family or legal heirs on property
          (b) Include the brother of seller as confirming witness in your sale deed
          (c) Take both buyer and seller agreements in original i.e. one executed between brothers and builder & second, new buyer builder agreement between current seller and builder.

          All the best

  • Abhijit

    Hi Nitin…
    Thanks for the nice artical , it’s really helfull to see we can save on Reg and SD.
    i have a flat which i bough for 25 lack in Dec 2011 and i got possesion in Dec 2013, now i am selling it for 38 lac, do i need to pay tax on capital gain as i am going to invest additional amount after paying banks loan to buy new flat for residance ( house for residance and i have no additional flat or house)
    Please advise.
    Thanks,
    Abhijit Thakare

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As the property is held for less than 3 years therefore you will incur Short Term Capital Gain Tax. Your Short Term Capital Gain is 13 Lakh and it will be taxed according to your Income Tax Slab.

      • Abhijit

        Thanks Nitin.

        can you please advise me what date is considered as date of acquisition to check if it is short term or long terms.

        i got to kow that Date of Allotment is considred as date of acquisition, but form my other reading i see diffrent View where it is mentoined date of Possesion or Date of Sale Agreement with Builder.
        In My case we did Agreement with Builder on March 2012, whic is registerd with all dues like SD and Reg chagrges, so if i consider this March 2012 as date of Acquisition then 3 years would be March 2015.
        Please let me know what date is conidred as date of Acquisition? Agreement to Sale ( Registerd and SD paied) or Date of Possesion ?
        Thanks,
        Abhijit

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Date of Allotment can be considered as Date of Acquisition. I agree that there are different views but there are enough legal references wherein Date of allottment is declared as Date of Acquisition by IT tribunal and courts.

          • Abhijit

            Thanks Nitin, this is really helful… keep doing this good work …there are many people in market who are there to make people full…and because of this form i think lot ot people get right information at Right time …….thanks Again !!!

  • Raj

    Hi Nitin, i have a query in selling a under construction flat. No loan.
    Flat is to be delivered in May 2015. I have the sale and construction agreement. Not yet registered.
    1.It is good to sell before the registration as the charges can be avoided, or, its mandatory to be registered to sell.
    2.Does the transfer incur any charges.
    3.And the transfer is documented as a tripartite agreement between me, buyer and builder.
    Am i correct on this and any other things to be of concern in selling a under construction flat.

    Please advise, Looking forward
    Thank you

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. You may sell before registration
      2. Yes, you may check your agreement with builder. It is mentioned in agreement. Normally it is Rs 200 psf
      3. Correct

  • Prem

    Hi Nitin,
    I am planning to buy a property at 75 Lacs whereas the guideline value is 50 Lacs.
    1. Is it legally accepted to register at 50 Lacs when sale value is 75 lacs
    2. whether seller has to pay capital gains for 50 lacs or 75 lacs
    3. If legally acceptable, you had advised DOTOR. Can you elaborate this.
    4. Should I give single payment instrument for 75 lacs or two paymwnt instrument for 50 lacs and 25 lacs respectively?
    5. In this case can I consider 75 lacs for my capital gains computation as I am buying this property based on the sum received from sale of property
    6. Is there any other tax implications for buyer.
    Pleas advise. Thanks
    Prem

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Yes
      2. 75 Lakhs but if DOTOR of 25 lakhs is executed than 50Lakhs
      3. Please check my post on DOTOR
      4. If you are registering at 50 lakhs then 2 cheques of 50 lakhs and 25 lakhs else one cheque of 75 lakhs will do
      5. No, If you are executing DOTOR of 25 lakhs then your cost of acquisition will be 50 lakhs for capital gain calculation. If you wish to consider 75 lakhs to save capital gain then register property at 75 lakhs only which will be cost of acquisition of property.
      6. TDS at 1% should be deducted and deposited by you

  • Ashok Kumar

    Hi Nitin,

    I am planning to buy a flat and the builder has told me that the particular flat I am planning to buy is that of an Investor and he explained me about some AGPA to GPA conversion. He said that the investor who is the seller is doing this for tax purpose. So I am supposed to pay 6% Registration and Stamp fees but the builder asked me to make 2% DD and 4% in cash. Does this sound right?? Currently in EC I see the sellers name(Investor) appearing as the CL. I understand that the 6% goes to govt so if I give cash how is it going to Govt?? Please help

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Its a complex case. AGPA is basically agreement of sale cum GPA. Objective behind AGPA to GPA conversion is not clear. If sellers name is appearing in EC which means property is already registered in his name then what is the role of builder in this whole tranasaction.

      I suggest you to hire a competant property lawyer who can help in this case. Personally i will not suggest any cash transaction as it is not required at all.

      • Ashok Kumar

        Thank you so much for replying. I as m really obliged. Nitin the builder is facilating the whole process and I am certain he is not gaining anything out of it. He told me that during registration the investor paid 6% registration fees and this is a legal way of him getting 4% of it back when transferring the ownership in my name. So if I decide to buy the flat then I would have to pay the regular 6% registration fees. The builder is just keeping me in the loop that registration would be done with 2% fees and the rest 4% I should hand over to the investor under whose name the property is now. Does this make more sense now? My major concern is this GPA and AGPA conversion. How is it going to impact my ownership on the flat?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          As the property is registered in seller’s name therefore now there is no case of refund of registration charges to seller. You can pay your stamp duty and registration charges directly to sub-registrar office. You may inform builder regarding same and tell him that you are not liable for any registration fees refund to seller.

          Regrading AGPA to GPA conversion you may hire a property lawyer.

          • Ashok Kumar

            I did that already. Thank you again. Regarding AGPA to GPA I was confused myself. So the seller has AGPA in his name so if I buy the flat I would get the sale deed in my name.

            • http://www.nitinbhatia.in/ Nitin Bhatia

              As the sellers name is appearing in EC therefore property is registered in his name. You need to check whether he executed seperate sale deed based on AGPA or he has registered AGPA in sub-registrar office. I don’t foresee any issue as such if documents is registered in his name by the builder.

              • Ashok Kumar

                So if the seller has AGPA and when I am buying the flat from him will the registration charges be less as compared to a normal registration. For normal it is 6% and for this it is 2% as per the builder.

                • http://www.nitinbhatia.in/ Nitin Bhatia

                  No, it will be same as normal registration charges. It seems he will transfer property through GPA which is illegal.

                  • Ashok Kumar

                    Thank you Sir.I have decided not to buy that flat. Thank you so much for your help. Really appreciate it

  • Sai Sudarsha

    Hi Nitin,

    I have Purchased flat in bangalore for 37 lakhs and in Sale agreement it is showing 654000 and in Construction agreement it is showing 3046000. Now i am going for registration and the builder has provided sale deed for 1750000 and the loan has been approved by SBI. i have checked with the builder on this difference they told it is the government rate currently going so we have mentioned that and if you want ypu can go for 3700000 also but you have to pay extra cost for the Sd and Reg. It will create any problems for me in future if selling for more than 37 lakhs or home loan interest showing in Returns.Please suggest.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is perfectly legal to register property at Govt Guideline / Guidance value which is 17.5 lakh in your case. It will not create any problem.

      • sai

        Thanks Nitin, You are giving Awesome Responses but final query suppose if i want to sell after some years there is difference in selling price against to the registered value then in that case what we need to do…

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You will not face any problem provided you have all original agreement and payment receipts.

          • sai

            Thanks Nitin , Now it gives me clear picture of this. Thanks a lot once again for awesome Replies.

  • Alka

    Hi Nitin,
    What is the stamp duty and registration charges in lucknow. I’m buying a property which is costing me 30 Lacs. How much aproximate stamp duty and registration fee I’ll have to pay. Its a property on society land. Regards Alka

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If the area is under U.P. Town Improvement Act, 1919 then 10% else 8%. Registration charges are 2% subject to max limit of Rs 10,000.

  • DGoyal

    Hi Nitin,
    I have a flat in Pune in my name but on behalf of my brother who has actually made all the payments for the flat. Now I wish to transfer the immovable property in his name and best way to do that seems to be by making a gift deed in his name as this would not have tax implications for both of us. As far as I know the stamp duty will be applicable on gift deed but not sure about the rate in Pune as well about registration fees, will that be applicable?
    Can you please suggest if gift deed would be the best or would there be any other way or legal mechanism to transfer the property to brothers name in the most cost effective manner.
    Thanks in advance for your advise on this.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Gift deed is only option and as the transfer is to your brother (classified as blood relative) therefore there will be no tax implications. Imp point is that there should not be any exchange of monetary/consideration value at the time of executing gift deed. Secondly if the property is inherited then you need to hire lawyer before exectuing gift deed as the rules and regulations are different for execution of gift deed which is inherited.

      Stamp duty on gift deed in Pune is 2% and registration charges are 1%.

  • Vivek

    I am purchasing a residential property in Thane, Maharashtra. Is it possible to save the stamp duty for under construction flats purchased from the builder ?
    If yes, please let me know how.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Register property at UDS (Undivided Share).

  • Dharmesh

    Hi Nitin,

    Really nice post. Easy to understand.

    I would like to know, how can I save stamp duty if my uncle want to give his land to my dad as gift deed?

    Thanks in advance.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I hae already answered this query

  • Dharmesh Patel

    Hi Nitin,

    Really nice post. Easy to understand.

    I would like to know, how can I save stamp duty if my uncle want to give his land to my dad as gift deed?

    Thanks in advance.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Unfortunately you need to pay stamp duty and registration charges for gift deed execution as per the rates fixed by local state govt.

  • Vijay Kumar

    Hi Nitin,

    I am buying a flat which is part of “Land Owner’s Share” and I am dealing directly with the Land-Owner (not with the builder). This is a newly constructed (ready for possession) apartment and it would be a first time registration on my name. The total sale consideration is 65 Lacs and Land-Owner has allowed me to do 1% TDS (i.e. TDS of 65K) on the sale amount. I am going for a 80% loan from HDFC bank.

    Now the questions that I have are:

    1). Can I register the flat for Guidance-Value/Circle-Value which would be around 40 Lacs (instead of registering it for actual sale value of 65 Lacs)? And if I do so, will it be considered legal/valid?
    2). If yes, then can I do so without executing a separate DOTOR for the difference of 25 Lacs? (I guess the DOTOR will not even be applicable in this case as it is a first time sale, but I am not sure).

    Thanks much for your help.

    Warm Regards,
    Vijay

    • Vijay Kumar

      Just to clarify further: I am having the above doubt because I am doing 1% TDS on 65 Lacs, but I am considering to register it for 40 Lacs. Now, based on TDS it will be clear to the authorities that total sale consideration is 65 Lacs. In such a case, is it still legal/valid to register the property at 40 Lacs (i.e. circle value)?

      I am in the final stages of going for registration, and am eagerly/urgently looking for your help.

      Thank you so much.

      Regards,
      Vijay

      • http://www.nitinbhatia.in/ Nitin Bhatia

        TDS is on total consideration value and registeration can be done at lower circle rates. It is perfectly legal and I don’t foresee any issue in your approach.

        • Vijay Kumar

          Sorry for bothering you with repeated questions :

          You said that “TDS is on total consideration value and registeration can be done at lower circle rates”. Now, I just wanted to double check on this : can I register at lower-circle-rate even without executing a DOTOR (or) DOTOR is a must if I want to register at circle rate (instead of total consideration)?

          Thanks once again.

          Regards,
          Vijay

          • http://www.nitinbhatia.in/ Nitin Bhatia

            You can register at circle rate without executing DOTOR.

            • Vijay Kumar

              Thanks Nitin for the response, I really appreciate your help.

              I’ve a follow-up question: if I do not execute a DOTOR then how the additional 25 Lacs would be accounted for? My sale-agreement is on 65 Lacs, I am doing 1% TDS on 65 Lacs and I am taking bank-loan also on 65 Lacs. Then if the sale deed alone contains 40 Lacs as the sale-value (in order to register at the guidance value), then won’t the authorities question the legality of additional 25 Lacs that was paid (whenever they find out)?

              Also, I was going through an article in ‘The Hindu’ newspaper, and a paragraph in it states that:

              ————————————————————————————————
              It is not permissible to show the guideline valuation as the sale price or for that matter any lower value than the real consideration. It would be violation of stamp law because of the lower stamp duty that is paid on the basis of lower consideration recorded in the document.

              Registering authorities on discovery of real consideration can impound the document at the stage of registration itself and levy ten times the difference between the stamp duty payable and the actual stamp duty on recorded consideration.

              If the reader obliges the purchaser to save his stamp duty by understating the consideration, but reports capital gains and pays tax on the basis of real consideration, there is violation only under the stamp law and not under the income-tax law.
              ————————————————————————————————

              So I am again confused. It would be really helpful if you could clarify further.

              Thanks,
              Vijay

              • http://www.nitinbhatia.in/ Nitin Bhatia

                You are mixing too many information points. As you are not hiding anything from govt or tax authorities therefore you will not face any issue. The news clip shared by you mention that property cannot be registered at value lower then guideline value. Any registration at guideline value or more than guideline value is perfectly fine.

                In layman terms, according to govt value of your property is 40 lakhs but you are ready to pay premium of 25 lakhs for property therefore buying it at 65 lakhs. Now govt’s concern is that stamp duty should not be underpaid therefore govt has fixed guidance value at 40 lakhs. Till the time you are paying stamp duty on 40 lakhs, Govt will not have any objection. Govt is not concerned how much premium you are paying for the property over and above 40 lakhs (value fixed by govt).

                In my opinion, if you have too many apprehension on paying stamp duty at guidance value then you may go ahead and register property at consideration value i.e. 65 lakhs only.

                • Vijay Kumar

                  Thank you so much for the clarification Nitin.

                  Another doubt that I’ve is : if I register my flat for 40 Lacs (even though the real consideration is 65 Lacs), then at the time of re-selling the flat in future, my capital gain would be calculated on 40 Lacs or on 65 Lacs?

                  Regards,
                  Vijay

                  • http://www.nitinbhatia.in/ Nitin Bhatia

                    65 Lakhs

                    • Vijay Kumar

                      Thank you very much Nitin, for patiently clarifying all my doubts. It was really helpful. You are doing a great job!!

                      Regards,
                      Vijay

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Firstly i will not suggest to deal directly with Land owner as you never know whether land owner has issued any POA to builder to sell land owner share flat on land owner’s behalf (it is very common scenario). Even if you are dealing directly then you may demand builder NOC for sale of flat directly by land owner and make builder as confirming party in your sale deed.

      1. It is perfectly legal
      2. If it is ready to occupy then you may execute DOTOR towards house furnishing.

  • Nirmal Kumar

    Nitin Ji,

    I am planning for participating in a e-auction. Reserved price is 63 lac. But as per circle rate, property cost will be around 30 lac max. As per bank, b’coz you are paying at least 63 lac, hence payable stamp duty will be on 63 lac. pls suggest me what is possibility to pay stamp duty on circle rate , not on transaction amount.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      I concur with bank. In case of bank auction, bank issue sale certificate to successful bidder which can be registered in sub-registrar office therefore there is only 1 value of the property which is the winning bid amount & amount paid to the bank therefore in case of bank auction it is not feasible to register property at circle rate. Property can be registered only at the value mentioned in sale certificate.

      • Girish

        Hello, Sir…
        I have purchased a house @ 17.31 lac at ahmedabad, Gujarat. I have already paid 2.31 lac & i got 15lac home loan… Builder tilda me that stamp duty chargrs would be 10%… But When i checked Online its showing that in Gujarat the stamp duty charge is 7.5%…
        Sir I have 2 qstn…
        1- How can i find what is the current
        Guidance value or circle rate of my property…
        2 – Where i need to go to apply this Guidance value or circle rate scheme and how much would be my savings in this way..???

        Desperately waiting for ur reply…
        Thanks & regards
        Girish

        • http://www.nitinbhatia.in/ Nitin Bhatia

          I have already answered this query.

  • Sneha

    Hi Sir,

    My Query is – We have booked flat on 3900 Rs/sqft in pune moshi area, the total value is 38 lack(except registration, stamp duty and all), and applied loan in LIC HFL, and they given loan sanction letter as well, on the basis of income.
    1.) for registration builder say’s it will be done on Gov. value not on booking value. but he want to collect money on booking amount for Stamp duty, Registration, VAT, ST.
    … so how can we get actual Gov value for this property— Should i keep mail to sub register office.?
    2.) If we do registration on Gov. val, will Bank gives the same sanction amount.?

    Thank’s Sneha

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. You may visit local sub-registrar office to check the Ready Reckoner or Govt value. If you have property details then you can also check online through following link
      http://igrmaharashtra.gov.in:8080/eASRCommon.aspx?hDistName=Pune

      2. PSU banks like SBI approve Home Loan on Sale deed value but private banks approve Home Loan on sale agreement value instead of sale deed value. If you are availing Home Loan from SBI you need to discuss this point in advance.

  • Samiran Biswas

    sir

    I have made sale deed to buy a house of 25 laks. But registering this property at 18 laks(valuation made by govt). I have to submit document of 25 laks transction as xerox copy of DRAFT(13 laks) to SBI ,because sbi issue only 12 laks loan.
    So my question is 1) whether i will involve in fraud case after transaction due register at lower price?
    2) Is there any income tax problem i have to face in future?

    please guide me as soon as possible, because dealing will be done on 29-09-2014.

    Thanking You
    Samiran

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. It is perfectly fine to register property at govt valuation. Sale deed will be of 18 lakhs therefore you need to make 2 drafts i.e. 7 Lakhs and 6 lakhs. The entry of 12 Lakhs (Home Loan) and 6 Lakhs (your contribution) will be included in sale deed. Whereas sale agreement will mention consideration value as 25 lakhs. Balance 7 lakhs can be shown as token amount or you can make sale agreement with entry of all 3 drafts i.e. 12 lakhs, 7 lakhs and 6 lakhs.

      2. No, till entire transaction is in white and is being declared you need not to worry.

      • Samiran Biswas

        Sir

        1) give me details how to show the balance amount of 7 lakls as Token amount ?
        2) If not shown in token amount (7 lakhs) and not made any sale deed of 3 draft i.e. 12 lakhs,7 lakhs,6 lakhs (though sale agreement of 25 lakhs ia already done)

        then what type of problem i have to face any in future ?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          1. I have already mentioned that you can execute sale agreement and total consideration value including balance 7 lakhs in sale agreement which can be notarized.
          2. You will not face any problem.

    • Samiran Biswas

      Please sir
      give me detrails how to show the balance amount of 7 lakls as Token amount ?

      • http://www.nitinbhatia.in/ Nitin Bhatia

        I have already answered this query

  • Shubham

    Dear Sir,
    Your post is really knowledgable and simple to understand and I really appreciate that.
    I would like to get an advice from you regarding the sale of my property. I purchased a flat in Bangalore in 2010 for 60 lacs for which the builder made a sale agreement of 20 lacs and another supplement/construction agreement of 40 lacs. The total deal was for 60 lacs (market value) for which I paid 10 lacs through cheque and 50 lacs I got loan from LIC. Hence, all the transaction was done in white and there was no cash amount involved. However, the property was registered (sale deed) for 20 lacs according to the guidance value. Now, my question is if I sell the property for 75 lacs will my LTCG for income tax will be considered as
    1. 75 lacs – (20 lacs * CII) or
    2. 75 lacs – (60 lacs * CII)
    Basically, I want to understand in case of 2nd option is this still appropriate to consider the actual amount of purchase for calculating the LTCG rather than the registered value of the property.

    Kindly, enlight me on this.
    Regards,
    Shubham

    • http://www.nitinbhatia.in/ Nitin Bhatia

      For Long Term Capital Gain you need to consider higher of 2 values i.e. 60 lakhs or 20 Lakhs therefore you will calculate LTCG on 60 lakhs. Secondly since you are selling after 36 months therefore you can also exclude any improvement cost incurred during last 4 years and can adjust indexation benefit on this improvement cost.

      • Shubham

        Dear Sir,

        Thanks for your reply. So just to confirm once more, there is nothing wrong in terms of taxation while considering the actual purchase price of 60 lacs for calculating LTCG even if the property is registered at the time of sale deed for 20 lacs ?

        Regards,

        Shubham

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Correct

  • SrK

    I would like to know about co-ownership. What are the advantages and disadvantages of adding a co-owner in a property.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Advantages and dis-advantages depends on who is the co-owner i.e. wife, parents, siblings etc. At macro level, you should not include anyone as co-owner till that individual is pooling an amount proportionate to ownership in the property.

      • SrK

        I am buying a property at 19.5 lacs. I have a preapproved loan of 18.4 lacs in which me and my wife are co-applicant. My anual salary is 4.32 lacs and my wife gross salary is 2.4 lacs. If i register the property jointly, adding my wife as a co-owner what are the benefits and pit fall in it. Can you please explain?

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Only benefit is that your wife can also claim Income Tax Benefit if is joint owner and co-borrower.

          If income tax benefit is not a concern then i will not suggest co-ownership. I cannot elaborate pit falls on public forum.

  • Pushkar Sharma

    Dear sir,
    i want to know that if i buy a property on loan and rent it to some another person for some time .
    what will be the effect on bank loan and tax saving ?
    thanks
    Pushkar Sharma

    • http://www.nitinbhatia.in/ Nitin Bhatia

      There will be no impact on Home Loan. As the property is let out therefore you can claim loss from let out property by declaring actual rent received.

  • Girish

    Hello, Sir…
    I have purchased a house @ 17.31 lac at ahmedabad, Gujarat. I have already paid 2.31 lac & i got 15lac home loan… Builder tilda me that stamp duty chargrs would be 10%… But When i checked Online its showing that in Gujarat the stamp duty charge is 7.5%…
    Sir I have 2 qstn…
    1- How can i find what is the current
    Guidance value or circle rate of my property…
    2 – Where i need to go to apply this Guidance value or circle rate scheme and how much would be my savings in this way..???

    Desperately waiting for ur reply…
    Thanks & regards
    Girish

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. Stamp duty in Gujarat is 8% + 25% additional for urban areas therefore 10% for urban areas. You may approach local sub-registrar office to check current guidance value / circle rate and applicable stamp duty

      2. Savings will depend on sale agreement value and registration value as per circle rate.

  • Sneha

    I have taken the property in Pune, PCMC Area,

    Property is under construction around 85 to 90 % work has been done, and possession is around Feb 2015,

    1.) Now my Question is Should i go for registration on Gov value/Guidance value Or Booking Value/Market Value to save Stamp duty and Registration coast.

    2.) As the Sale agreement can show my full value and the sale deed will give me the Gov Valuation of flat, and reaming amount can i show in DOTOR?

    3.)If i do like that will it effect to Loan? As applied in LIC HFL and got Loan Approved Letter, So is the Loan value is depend on Sale agreement for LIC HFL?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. You may go for property registration at Govt Guidance Value. it is perfectly legal.

      2. For under construction flat, it is not feasible. DOTOR is applicable for resale properties. If you have signed 2 agreements with the builder i.e. construction agreement / agreement to build and sale agreement / agreement to sell then it is perfectly fine to register property at Govt Guidance Value.

      3. Private lenders like LICHFL, ICICI Bank, Axis Bank etc approve Home Loan based on Sale Agreement value whereas Govt / PSU lenders like SBI, IDBI Bank, Bank of Baroda etc will approve Home Loan based on Sale Deed value. You are right, LICHFL will consider Sale Agreement value for Home Loan

  • rama

    Hi!! I am planning to buy a flat worth 55 lacs in pune in which 5 lacs is infrastructure cost. The builder considered infra 5 lacs also while calculating in stamp duty, service tax, vat. Is it right?? how to save these costs. I am planning to go for SBI home loan. Please advise me.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If Infrastructure cost is mentioned in your construction agreement / agreement to build with the builder then you have to pay for it. You need to clarify exact definition of Infrastructure cost with builder though it is loosely defined as charges towards amenities as mentioned in the project brochure.

      Depending on definition of infrastructure cost, we can take a call whether you are liable to pay VAT or ST on this component or not. In my opinion, stamp duty is not payable on Infrastructure cost and builder can avoid. You can register property on sale agreement value provided it is more than govt ready reckoner value.

  • Santosh

    Hi Nitin,

    I have an doubt reg guidance value and market value implication in long term. Let me first tell you about my scenario.
    1. Market value for my property is 50 , i am paying the same amount
    2. Guidance value is 20%

    My question if i go for guidance value then what will be the tax implication if i sell my flat in 5-10 years.
    What will be the benefit to the builder if i go for guidance value
    Is there any way in which i can go registration as per guidance value and also save the tax implication if applicable on long term sale.

    Regards,
    Santosh

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1.If you buy any property at market value say 50 lakhs and register at guidance value then for all tax related matters i.e. Long term Capital Gains Tax, Short Term Capital Gains Tax or TDS u/s 194IA the higher of 2 values will be taken into consideration. Therefore in your case acquisition / consideration value will be 50 lakhs irrespective of registeration value.

      2. Builder will pay less stamp duty & registeration charges thus savings for him

      3. Unfortunately not possible. As i mentioned, Market Value will be considered for any tax related calculations.

  • Pramod

    HI Nitin,
    I purchased a flat in PUne, maharashtra, in June 2013. I paid stamp duty (6%) + vat etc. during purchase of this under construction property. I got possesion in Oct 2013 and society has formed in April 2014. Now builder is saying to do the sales deed. My doubt is, wheather I have to pay extra for it?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You have not mentioned whether you paid stamp duty to Govt i.e. Sub-Registrar or to the builder. If you paid stamp duty to builder and you have payment receeipt then you need not to pay any stamp duty now as builder will pay on your behalf to Govt. In 2nd scenario, if you paid stamp duty to Govt then also you can adjust the stamp duty already paid against sale deed and can pay balance amount (if any) at the time of registeration of sale deed.

  • http://www.nitinbhatia.in/ Nitin Bhatia

    I will not suggest the arrangement suggested by you. Legally, owners name should appear in all documents and payment should be made by owner only. You cannot include your name / pay stamp duty on behalf of your wife as you are not co-owner.

    The best solution is, if you have marriage certificate then you may apply for new PAN for your wife with her new name (after marriage). Based on new PAN, open a new bank account and then make all payments from this account. You will receive new PAN in 10-15 days time and bank account can be opened same day.

  • Gurmeet

    Dear Nitin,

    I am buying a plot in Punjab (Zirakhpur). The total cost of the plot is 36L out of which is 28L loan from SBI.

    Just wanted to check how much do I have to pay as a registration charges + Stamp duty etc to government? Is there any concessions for PH? If yes how much?

    Thank you,
    Gurmeet

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Current stamp duty in Punjab is 6% and Registeration charges is 1%. It is fixed and for any concession for specific category, you need to check with local sub-registrar office.

      • Pradeep

        Thank you for the valuable information Nitin.

  • Rama Bangera

    Dear Nitin

    I have booked a 3 BHK flat in Mumbai sub urbs in 2011, paid 60% of the flat value already. Also, registered the flat in 2012, which cost me about 5 lakhs then. The project is very slow now, but the builder is giving me an option to change to another project nearby which is finishing soon.

    In this case, can I swap the registration money etc paid to the second one, if I choose to swap?
    Thanks
    RB

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Any Govt duty or taxes paid cannot be transferred from one property to another i.e. VAT, ST, Stamp Duty or Registration Charges. Amount paid to builder can be transferred, if builder agrees for same.

  • Ren

    Hi Nitin,
    Quick question, if we want to transfer resi property under gift deed in Gujarat what would be total expense would be including govt. current taxes and levies? Is there is any lawyer or other fees payable? an outline would help.
    Thanks
    Ren

    • http://www.nitinbhatia.in/ Nitin Bhatia

      For gift deed following conditions should fulfilled
      1. Property is not ancestral
      2. There is no money transaction/exchange involved
      3. You are Hindu by religion

      Stamp duty will depend who is gifting residential property to whom i.e. whether gift deed is executed between blood relatives or non-blood relatives. Stamp duty payable in Gujarat is according to Bombay Stamp Act, 1958 as applicable to the State of Gujarat. As per Article 28 of Schedule I of the Act, the stamp duty on gift deed is 3.5% of the market value of the property

      If above conditions are not met then Stamp duty in Gujarat is 8% + 25% additional for urban areas therefore 10% for urban areas. You may approach local sub-registrar office to check current guidance value / circle rate and applicable stamp duty

      If you take help of lawyer then you need to pay lawyer fees.

      • Ren

        Thanks for your reply.
        So if we do sale did as per Gujarat Govt. (Jantri) i.e. at govt. valuation the duty will be 8%? or 3.5% ? also is there is any other admin fees like 1%?
        Please advise
        thanks
        Ren

        • http://www.nitinbhatia.in/ Nitin Bhatia

          Stamp duty will depend whether you execute Gift deed or regular transfer as i explained in my previous comment. You may register at Govt valuation or FULL value, its your choice.

          1% must be registration charges which is over and above stamp duty.

  • Santosh

    Hi Nithin,

    I am buying a Builder floor apartment from a company which built the apartment complex . They have not registered the apartment and now they are selling it off. The purchase value is for 80 lakhs. I want to register the property at the guidance value which is like 45 lakhs. I want to know which documents should be marked with the purchase value and which documents should be marked with guidance value. Also is there going to be any problems for either me or the company if I register at the guidance value.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Sale agreement will be at purchase value and Sale deed will be executed at guidance value. Take payment receipts for purchase value. Rest all documents does not mention consideration value. You may register at guidance value but since you are buying from a company therefore get all documents verified from lawyer.

  • Nikhil Sharma

    Hi Nithin

    I just purchased a apartment in Indirapuram Ghaziabad . The case was a allotment transfer case, a all white deal with i purchasing the property under Bank Mortgage . All the Transfer procedures have been done . Sale agreement was done for 1 cr. Now Builder at time of possesion told me that Consideration amount of the property is 60 lac i.e. Amount at which they had alloted to first allotte (from whom i had purchased).

    So registering authority told me that Stamp duty that i had to pay is either on consideration amount or circle rate whichever is higher (in my case 80 Lacs)

    But Bank is asking stamp duty on full 1 cr amount . i am ok to pay extra amount for stamo duty to get my property registered in 1 Cr. But registration authority say i cannot pay more stamp duty then circle rate . Is that correct ? My understanding is that User has to pay minimum stamp duty to get property registered . Why should they have objection in receiving more money

    Thanks
    N.Sharma

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Your understanding is correct. A property cannot be registerated at value less than circle rate but you are free to register at circle rate or higher value.

      • Nikhil Sharma

        Thanks Nitin

        Actually Advocate who is doing registry is appointed by builder and he is saying this . Can you point out if it is written somewhere in UP Stamp act

        Rgds
        N.Sharma

        • http://www.nitinbhatia.in/ Nitin Bhatia

          You should hire your own lawyer. Seems Builder is trying to save stamp duty

  • Uma

    Hi Nitin,

    Before I share my concern I would like to thank you for your selflessness effort in creating awareness among general people on various fields. Your blogs are too informative and always read it whenever I get free time. Keep up the good work

    Now my concern is that I had purchased a property in South Bangalore exactly a year back and am expecting to get the possession in next 2 to 3 months. Earlier I was planning to go for registration after possession itself because of obvious reasons. Builder has confirmed as he will be registering the property at prevailing circle rate.

    Now there are couple of things which is bothering me

    1) Delay in registration means I will not get full rebate on my Home Loan interest (2.5 L limit) which I have already declared, so by the end of financial year I will get shocker. Also I cannot claim post possession home load interest benefit for next five years because my yearly interest will be well above the 2.5 L limit atleast for another 6 to 7 years.

    2) Am also worried as there are speculations that circle rate in Bangalore is going to increase and it will be steeper one. I heard in Delhi and Mumbai , it has already happened. Now if it happens in Bangalore also in next 2 to 3 months, I will not just end up paying more for my registration but also loose tax rebate.

    3) In my property some people have gone for registration even without waiting for registration/hand over and am not seeing any delay as such in their apartments as such. There is certain delay visible but it’s overall delay in common areas.

    So keeping all above points in mind, I wanted to go for registration before actual handover. However before that I need your expert advice on this because I feel as something is missing in my evaluation. There are some important points which we need to taken care before going for registration, so would appreciate if you can advice on same.

    Many Thanks
    Uma

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Thanks for liking the blog. To answer your queries
      1. Any interest paid before possession is Pre-EMI interest and can be claimed in 5 equal installments from the FY in which the possession is received. Now the limit of interest deduction will be decided based on status of property. If the property is self occupied then the max interest dedcution available is Rs 2 lakh during FY (including 1/5th Pre EMI component + Interest Paid during FY). In case of let out property, you can claim loss / gain from let out property and there is no max limit on interest dedcution i.e. interest dedcution can be claimed on actuals including 1/5th Pre EMI installment. For self occupied property, If you don’t get possession of house within 3 Financial Years (FY) from the end of FY in which the Home Loan is availed then the max limit on interest dedcution will be reduced from 2 lakh p.a. to 30000 p.a. (incluidng pre EMI interest)

      2. These are just rumours spread by builders and agencts to close the hanging property deals or to ceate sense of urgency as Bangalore is going through rough patch in real estate market. As of date there is no govt notification in this regard and after notification it will take atleast 6 months to complete this process as govt will invite public opinion etc.

      3. It is advisable to register property on completion i.e. after receiving occcupancy certificate or completion certificate. In case of any deviation or dispute, the responsibility rests with builder till that time depending on T&C of the agreement.

      • Uma

        Hi Nitin,

        Thanks again for your usual support and your explanation against each point in details.

        Now since last couple of days am reading alot about increase in guidance value in Bangalore in national newpapers. Every.where they are telling same thing as by Nov , it will increase between 20 to 30 %.Now somewhere I read that this hike is only for plots and not applicable for Apartments. Is it true! And how can I get the exact information regarding this.

        Best Regards
        Uma

        • http://www.nitinbhatia.in/ Nitin Bhatia

          I cannot comment on rumors, Chinese whispers and speculations. You may check with sub-registrar office.

  • Pramod Chavan

    Hi Nitin Sir, I am purchasing a property ( Market value is around 70 Lacs) through one partnership firm (ABC). Current status of the property is as follows.
    1. This will be the fourth sale deed between me & Partnership firm.
    2. First deed is between Mr. X & Builder on 10/1/2011 .
    3. Second deal is between Mr. Y & Mr. Z on 5/6/2013. For this deed Mr. X has given POA to Mr. Y on Rs 500 Stamp paper & this POA is registered.
    4. Third deed is between Mr. Z & Partnership firm (ABC) on 4/8/2014.
    5. Society Share certificate is updated i.e. all names are appearing in Share certificate.
    Now I have following questions.
    1. In second deed POA is used for registration on Rs 500 Stamp paper. So is it OK ?
    2. While buying property from any partnership firm , what additional care to be taken ?
    3. I have seen there is section 29(2)(a) which says Society will not transfer the share in my name till one year as third deed has happened just 2 months back . Is this true OR Society committee has that much power & through which they can transfer share in my name ?
    Pl help me
    Thanks in adavance

    • http://www.nitinbhatia.in/ Nitin Bhatia

      1. As you mentioned POA is registered therefore its fine. You just need to check the content of POA whether Mr Y was authorized by Mr X to sell property through POA.
      2. A lawyer can help in this regard as i have not seen all documents therefore cannot comment
      3. As per Sec 29(2) of Maharashtra Co-operative Society Act, if there is any lock-in period on transfer of shares then any agreement executed during this lock-in period stands null and void. Though some lawyer might suggest you to take irrevocable POA for transfer of shares after lock-in period but legally any agreement during this period is not valid. If society is registered under Maharashtra Co-operative society act then even society by-laws or GBM approved proposal cannot over rule Sec 29(2).

      In my personal opinion, you should not buy this property till there is lock-in on transfer of share.

  • Aparna Gosavi

    Hi Nitin Sir,

    I am planning to purchase a resale property in Pune. Society is not yet formed for the same and owner is demanding for NOC amount worth Rs. 1lach which he will have to pay to builder. Is it authenticate and reasonable?

    Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Society NOC and any charges associated with it is sellers responsibility. As a buyer you need not to pay anything.

  • Maitrik shah

    Dear Sir,

    I am going to buy resale property in Ahmedabad.

    That property was build 20 years ago. The builder got permission of 2 flat on each floor for total of four floor.

    He constructed 4 floor instead of 2 on each floor. So, how much impact fee will be pay for regularise of construction.

    Extra build up construction was 600 sq. mt. & permission got 600 sq. mt. , so total now is 1200 sq. mt.

    In floor plan, he showed four flat on each floor with approval. but in commencement certificate, he got 2 flat on each floor.

    May this property be regularise? if yes, than how much amount should I paid?
    How to calculate impact fees?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You just check whether flat shortlisted by you is approved and legal or it is illegally constructed. If it is as per approved plan then you need not to worry about any other deviation. In case, your flat is illegal then i will not suggest you to buy the same. Regularization cannot be guaranteed as it depends on decision of state govt or local development authority. You may request the seller to get it regularized before you purchase.

  • Arjun

    But isn’t it illegal to Register a property at a lower price what we purchased?? We can easily get to know the Purchase prices based on the loan/bank statements right?? Additionally if we don’t pay the appropriate taxes for our property how will the govt generate revenue to meet public needs..

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can register either at sale value or at govt value / circle rate / guidance value. It is perfectly legal. You cannot register below Govt valuation.

  • Sreedevi

    Is there a tax that the seller needs to pay for the money that he gets out of DOTOR? If yes, what category does it come under?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You can declare net amount i.e. (amount received – amount spent) on furnishing as income from other sources and pay tax as per income tax slab.

  • satish

    I was given an offer of 7500000 at 3%interest P.A by a private finance. He is charging 1,55,500 as stamp duty and egal charges. Is it correct or wrong

  • Aditi

    I have booked one flat under construction and registered it also. Now the project is on hold. I want to dissolve the property and invest in other property. Can that registration fee be transferred to the new property registration charges?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      If registration fees is paid only to builder then you can ask for refund but if it is deposited in sub-registrar office then it is non-refundable and cannot be transferred to new property.

  • Gulab

    Hi Nitin,
    Can you please help me understand calculation of service tax for buying ready possession home directly from builder in chattisgarh? Cost of home is 25Lacs. Also what is VAT percentage in chattisgarh?

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is very complicated calculation. To calculate VAT & Service Tax or ST, There are 3 costs of a property i.e. Land Cost (approx 35%), Material Cost (approx 40%) and Labour + Service (approx 25%). Cost break up may change slightly from project to project. You can get this break up from builder. Land cost is exempted from both VAT and ST.

      VAT is applicable only on Material cost @ 14.5% and ST is applicable only on Labour cost & services @ 12.36%.

      Second method of calculation is VAT + ST = 8.59% of total cost (5.5% VAT + 3.09% ST). The 1st method is bit confusing for buyers therefore most builders calculate as per second method only as builder is not paying this from his pocket. 8.59% may go upto 9.5% as it depends how builder is calculating his cost.

      You may take break up of project cost from builder to calculate your Service tax component.

      Rules vary from state to state.

  • Abhay

    Hi Nitin,
    I had bought a under construction flat in Aug 2010 in Pune, registered agreement to sell in oct 10. I got the possession of flat in oct 13. Society is not yet formed and the project is still managed by builder. I would like to know, is there any need of sale deed and registration. What is conveyance deed, will I be required to pay any amount on these in any time in future. Thanks.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      As per ruling of supreme court of india, property transfer is legally valid if it is transferred through registered sale deed. Both Conveyance deed & Sale deed are related to transfer of right of ownership from one person to another. Only difference is that sale deed is executed in case of sale of property whereas conveyance deed is executed in case of gift, exchange, lease, mortgage or any other circumstance.

  • Suresh Kumar

    Sir,

    I am trying to sell my apartment in a very old building (35-40 years old), where the ready reckoner value comes to about 31 lakhs. However, nearby buyers are willing to give 20-22 lakhs only as building is very old and there are less chances of redevelopment in that locality.

    Is it legal to sell for below ready reckoner value? Is it going to invite income tax inquiry if I sell below ready reckoner price?

    Regards
    Suresh Kumar

    • http://www.nitinbhatia.in/ Nitin Bhatia

      You cannot sell property below ready reckoner value.

  • Ram

    Sir, I am thinking of selling my land which is located 82KM from Chennai and registered under local Panchyat office as Agriculture farm Land. The current guideline value is Rs250/sq.ft, however actual selling market price is only around Rs130 to Rs 150. We advertised many times and there are no takers at Guideline value selling price.
    Can you pl guide me what are the Legal and Tax implication of selling this below the guideline value. My area of land is 4800 sqft.
    I can sell this plot for Max Rs 7.2 lacs, as per the guideline value its value is 12 lacs.
    What is the stamp duty and Capital gain tax we have to pay (the purchaser and Seller)
    Thanks

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Unfortunately you cannot sell below guidance value. For stamp duty, you need to check with local sub-registrar office.

  • Nisha

    Nitin Sir, In your example, when buyer resells the the Delhi flat after five years, from Capital gains/losses stand point what would be his Cost Basis of the flat? Would it be 67Laks or 100 Lacks (67 from Sale Deed + 33 from DOTOR). Kindly clarify.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Cost of Acquisition will be cost of property i.e. 67 Lakhs i.e. Sale Deed value.

  • Ankit

    Hi Sir, I am buying a residential plot (2400 SQFT)from a builder at a rate of 2350 per SQFT. I have already paid 25% amount to builder through Cheque and rest 75% i would be paying through bank loan. The circle rate/ guidance value for the area is 700 per SQFT only. I would like to know if there would be any legal implications on me if I pay the stamp duty and registration charges at 700 per SQFT rate.

    Thanks for your reply

    • Ankit

      The property is in bangalore.

      • Ankit

        I also spoke with bank today and they said that they would provide two DD, one for the portion that would cover the registration part i.e. 700×2400 and other one in favor of the builder i.e. (2350-700)*2400 – 25% that i paid through cheque. This sounds more complicated. Would there be any legal problem in doing this.

        • http://www.nitinbhatia.in/ Nitin Bhatia

          The payment methodology suggested by bank is perfect and is standard payment process. All the best.

    • http://www.nitinbhatia.in/ Nitin Bhatia

      It is perfectly legal to register property at circle rate / guidance value. The stamp duty and registration charges will be paid accordingly i.e. Rs 700 psf in your case.

  • Mahesh

    Hi Sir,

    When I applied for Home Loan the LIC HFL person said me the Processing Charge is 10,000 and Service tax (12.36 %) the total amount was 11236, and need to given by cheque.

    Now after getting sanction letter he is telling, that need to pay Stamp duty, 0.2 % on Loan amount (6300), Legal fee (2700), Advocate and franking fee (2500), and central registration fee (2500), apart from above total processing fee he asking another 11500, and claiming that that is Sate Government fee, (Property is in Pune Maharashtra)

    Please clarify my query, I will be very thank-full to you.

    Thanks’ Mahesh

    • http://www.nitinbhatia.in/ Nitin Bhatia

      Among all charges mentioned by you, only 0.2% of Loan amount which is also called MODT charges will be paid to state government. Besides this you need to pay few hundred rupees for franking of your identity and address proof. Rest all charges will be levied by LIC HFL.

  • Aritra Nandi

    Hi Mr. Nitin,

    I just read few of your blogs, and they are very informative. Thanks for sharing such details over internet.

    I want to know a few things before going for a property.

    Is there anywhere, Where I can find the Govt. declared circle rate? So that I can negotiate a bit more with the builder.

    The builder is also insisting to get the registrations done before year end (by Dec.), becuase he is saying that Govt. increases rate every year in January, and prices will appreciate in Jan. Is it true?

    In Pune, what all can I save if I get the registrations done with my wife as first applicant?

    Thanks in advance for your inputs…