Demystifying Stamp Duty & Registration Charges in Delhi

Investing in real estate plots in India has always been akin to investing in a golden goose and is considered a sure-shot method of creating wealth. But, if you are not familiar with the tricks of the trade, your opportunity to make significant profits can turn into a nightmare. Compliance with regulations is particularly important in this context as it can turn a simple investment into a gilt-edged investment.

Pay to secure your investment

When it comes to investing in upcoming properties in India or any real estate properties, many people invest their life's savings with the hope of doubling their money in the years to come. Others dream of owning a big home or a commercial complex – a property they can either use personally or to generate a monthly income. Yet others look at investing in real estate as a means of securing their wealth and earning profits from it. No matter what the motivation, realty investors are required to pay certain additional costs to the government in order to establish legal rights related to real estate. Of these charges, the two foremost are stamp duty and registration charges.

Stamp duty and registration charges

Pondering about buying a property or plots in Delhi or have already decided to buy a resale property in Delhi? While figuring out the overall cost of the property in any city, it is important to determine its stamp duty and registration charges. Stamp duty can be defined as the tax levied on the property by the state government on the basis of its market value, whereas, registration charge is the charge levied for keeping the record of sale of property for future references. These compulsory charges may vary from state to state according to the local laws.

Present rates in Delhi

The stamp duty in Delhi levied by the local government varies, depending on whether the buyer of the property is male or female. For males, the stamp duty charge is 6% as against 4% for females. The charge for joint purpose for both male and female is 5%. Some people try to work their way around the system in an effort to avoid having to pay stamp duty and registration charges, but doing so is illegal and undermines the value of the property in the long run, not to mention creating legal tangles.

Determining the market value of a property in Delhi

To determine the market value of a property in Delhi, different zones labelled under A to H categories have their own circle rates according to particular criteria that determine the market value of a property in Delhi. The stamp duty and property registration charges in Delhi are thereby determined accordingly. Now, these rates are revised from time to time. However, there is no specified time for their revision. In recent times, it has been noticed by some experts that these rates have been revised twice during the last two years.

Over the past five years, the market value of a property was calculated by the unit area method. This easy method uses simple arithmetic. According to this, property tax is calculated on the part of building covered, and area tax is calculated based on the category of the locality the property is situated in. It is for the same reason that Delhi has divided into eight categories, namely A to H. Only after determining the market value of a property are the stamp duty and registration charges in Delhi determined.

E-registration facility adds to convenience

Now, Delhi property owners can use the facility of e-registration. This will simplify the process of collecting the charges levied by the government and local bodies. E-registration eliminates unscrupulous intermediaries and touts by connecting the applicant directly with the designated authorities, and is much better in terms of functionality as compared to the conventional method of collecting charges in person.