Home Loan Stamp Duty and Registration Charges

Quite a few formalities take place when purchasing a house. These formalities can be anything from financial obligations to legal paperwork. Having clear and crisp paper when buying a home is mandatory as you will require these legal documents for multi-purposes for the longest period. You should take care of stamp duty, registration charges and other related tasks on priority. A delay or in case of an issue with them can cause a great deal of trouble for you. The article will give you a brief overview of the stamp duty and registration charges associated with property purchases that you should know about.  

What is stamp duty on Home Loan? 

Stamp duty is a specific type of tax levied by the state government on monetary transactions. All property buyers are mandatorily required to pay the stamp duty charges. Failing which, they will not be regarded as the lawful owner of the property. This Tax Act came into effect under the Indian Stamp Act of 1899. 

To explain stamp duty in simple terms, it is the tax paid by you to claim the conveyance deed, title deed, sale deed and power of attorney paper. The exact duty payable on each document is determined by the actual value and the nature of the property you are purchasing. The amount is calculated on the higher value of the property. 

Since the state government decides the mortgage stamp duty, the amount payable differs from state to state. In addition to the state policy, several factors influence the stamp duty of a property. 

Factors influencing stamp duty: 

  • The location where the property is located 

  • Age and gender of the property buyer 

  • Usage of the property 

  • The type of property in purchase 

  • Project amenities 

What is the property registration fee in India? 

The registration fee is the charge you pay to the government to get a property registered under your name. This fee amount is paid over and above the stamp duty charges. The law of registering a property came into effect under the Indian Registration Act of 1908. 

The registration fee is set by the central government of India and hence, uniform throughout the country. The fee is generally 1% of the total property value. However, note the fee amount may differ depending upon the type of property you are purchasing. 

Does Home Loan cover stamp duty charges and registration fees? 

No, since stamp duty and registration charges are overhead charges, they are not covered by Home Loan. And hence, it is important that keep enough funds aside to meet these expenses beforehand to avoid inconvenience. 

You can now calculate the stamp duty on your property easily using the stamp duty calculator. This online tool gives you an approximate idea of how much will the stamp duty cost you by simply a few details. Enter your state of the property and the total value of the property to calculate the amount applicable. 

What are the tax benefits on stamp duty and registration charges? 

The tax exemption on your registered mortgage stamp duty and registration fee come under Section 80C of the Indian Income Tax Act. You can claim a tax exemption of 1.5 lakhs in your income tax return filing as per the tax policy. You can also claim tax benefits under Section 80EE for interest on your Home Loan.

If you hold the property with another co-owner, both of you can claim a tax rebate in your respective tax filling. However, the upper limit for tax exemption in joint ownership continues to 1.5 lakhs. 

Now that you have a clear idea about the stamp duty charges for a Home Loan agreement and the importance of getting your property registered. Make sure that you keep these points in mind when buying your dream home. 

Apply for a Home Loan with HDFC Bank and embark on your journey of buying your dream house effortlessly. Click here to get started!

*Terms and conditions apply. Home Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.