Stamp Duty And Registration Charges In Mumbai

Stamp duty and registration charges in Mumbai remain one of the biggest sources of revenue for the state government of Maharashtra. In fact, the government has been banking on Mumbai's real estate boom to fuel growth and development.

While the city was exempted from the state-wide hike of one per cent in the stamp duty in October 2017, the municipal corporation of Mumbai in November 2017, has passed a bill to levy 1 per cent surcharge on stamp duty for Mumbai property buyers only. The total stamp duty to be borne by the homebuyer in the metro city of Maharashtra has been raised to six per cent and additional Rs 30,000 as registration charges.

In April 2018, the stamp duty for affordable housing projects under Pradhan Mantri Awas Yojana has been capped to Rs 1,000. 

In March 2015, the Maharashtra government decided that stamp duty need not be paid on the transfer of immovable property — land, house or flat — to one's own children or blood relatives. For such transfers, the total stamp duty, including local taxes is Rs 200. "As per Article 34 of the Maharashtra Stamp Act, for Gift Deed of Agricultural or Residential property and is in favour of Husband, Wife, Son, Daughter, Grandson, Granddaughter or Wife of deceased son of property within the limits of the Mumbai Municipal Corporation, the total stamp duty, including local taxes is Rs 200," says the website of the Department of Registration and Stamps, Maharashtra.

Stamp duty on gift deed in Maharashtra

Recently, Maharashtra Cabinet revoked the order to hike stamp duty on gift deeds. The state legislative assembly on August 10 passed an amendment to the Maharashtra Stamp Duty Act to increase the stamp duty on gift deeds to three per cent of the market value of a property. The existing stamp duty stands at Rs 500. Earlier, the cabinet had approved a stamp duty of three per cent on prevailing ready reckoner rates on gift deed transactions where the immovable property is being transferred to blood relatives including children, husband, wife and sister. 

No hike in ready reckoner rates in Mumbai

Maharashtra government has stayed the hike in ready reckoner rates for land in Mumbai. Ready reckoner rate is the market value of a property, determined by the government for stamp duty estimation, directly impacting the real estate project construction as municipalities collect several premiums and charges which are directly proportional to these rates. Moreover, the government has not altered the stamp duty for conveyance deed in Mumbai city but has raised it in rural areas by one per cent.

A gift deed in favour of any other family member, however, attracts stamp duty at the rate of two per cent of the transaction value. Similarly, five per cent of the transaction value is charged as stamp duty if a gift deed is signed in favour of someone outside of the family.

How much stamp duty and registration charges you need to pay in Maharashtra?

To put it in a nutshell, for residential property transactions done until December 31, 2014, the registration charges were Rs 25,000. From January 1, 2015, onwards, this has gone up to Rs 30,000. The stamp duty is charged at a standard five per cent across Maharashtra and additional 1 per cent as surcharge for Mumbai property buyers. 

Stamp duty on conveyance deeds

On August 10, the assembly also approved an increase of one per cent to the stamp duty on conveyance deeds in rural and peri-urban areas.

Moreover, the stamp duty on conveyance deeds in gram panchayat areas is now set at four per cent of the land value in the amendment, up from the current three per cent. The stamp duty in peri-urban areas governed by municipal councils was also increased to five per cent from four per cent.

How to calculate stamp duty and registration charges on your property?

The purchaser has to enter into an agreement with the seller of the flat and the stamp duty is computed as per the agreement value. The agreement value should not be less than the ready reckoner rate, or the guideline value as fixed by the government. In certain cases, the agreement value can be the market value, but whichever is higher is taken for stamp duty computation. Once the stamp duty amount is computed, the purchaser has to take a pay order in favour of the Stamps and Registration Department. Finally, the parties have to be duly present and sign the agreement before the registrar for completing the property transaction.

Suppose you buy a 200 sq m flat near Dr Homi Bhabha Road in Colaba, where the Ready Reckoner rate for residential property is Rs 264,200 per sq m. Assuming the property's agreement value is the same as the Ready Reckoner Rate in the locality, your property price calculation will be as follows:  

TOTAL COST
Suppose you buy a 200 sq m flat near Dr Homi Bhabha Road in Colaba
A. Area of the flat	200 sq m
B. Ready Reckoner Rate	Rs 264,200/sq m
C. Price of flat (AxB)	Rs 5,28,40,000
D. Stamp Duty (6% of C)	Rs 31,70,400
E. Registration fee (1% of C or 30,000, whichever is less)	Rs 30,000
F. Total cost (C+D+E)	Rs 5,60,04,400

 

Recently, the department of registration and stamps in Maharashtra has announced that cashless payment options for property registration in the state will be launched after Diwali. According to media reports, the department is testing the new payment platform. The department will set up point of sales machines that will be integrated with a central software for payment of document handling charges. Once launched homebuyers will be able to use the Government Receipt Accounting System (GRAS) to make online payment for registering the documents but they had to visit the office physically to pay in cash the handling charges of Rs 20 per page.