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.

About the Author Nitin Bhatia (180 Posts)

I am a Blogger, Credit Counselor, Reviewer and Author of write ups on Real Estate, Personal Finance, Financial Planning, Home Loans, Marketing & Current Affairs. I write blogs for leading web portals in India.

  • 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.

        • 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.

    • 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.

    • 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..

    • 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?

        • 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 ?

    • 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 ?

        • 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 ?

            • 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


                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 ?

                • 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 ?


    • 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.

          • 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?


    • 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??

    • 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.

    • 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.

    Anil S

    • 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.

        • 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

          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?

    • 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

    • 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?

        • 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

  • 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?

    • 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

    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?


    • 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?


    • 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.

    • 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?

    • 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 ?

    • 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

    • 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

    • 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.


    • 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.

    • 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.


    • 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

    • 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!

    • 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

    • 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,

    • 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…

    • 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?

        • 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.

    • 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?

    • 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.

        • 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
    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 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.

    • 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 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.

        • 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 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??

              • 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.

            • 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.

    Rakesh Motwani

    • 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.

        • 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

    • 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).


    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.


    • 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%

    • 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.

    • 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

    • 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

        • 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

    • 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)

    • 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?

    • 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

        • 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

    • 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

        • 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.

    • 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?

    • 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.


    • 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..

    • 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..

        • 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.

          • 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


  • 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!

    • 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.

    • 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

    • 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

    • 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. :(

        • 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?

            • 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.

            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?

            • Nitin Bhatia

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


              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.

                • 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?

    • 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.

    • 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

    • 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!!

    • 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.??????



    • 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.

    • 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.

    • 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.


    • 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.

    • 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…

  • Amiya

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