How to calculate stamp duty payable for execution of various documents
Stamp duty is a government tax, which is levied on all legal property transactions. Stamp duty is, therefore, a tax which is evidence, as it were, of any purchase or sale of a property between two or more parties. Stamp papers, which have to bought either in the name of the seller or buyer is valid for 6 months, provided the stamp duty is paid without any delay.
Stamp Duty Calculator:
First step to calculate the Stamp duty is to identify which category the document or instrument falls under. There are three categories of transaction for the purpose of stamp duty calculation:
Under the first category, the stamp duty remains fixed no matter what value is mentioned in the document or instrument. Examples of such instruments are Administration Bond, Affidavit, Adoption Deed, Appointment in Execution of Power, Divorce, Apprenticeship Deed, Award, Article of Clerkship, Cancellation Deed, Duplicate, Charter Party, Copy of Extracts, Indemnity Bond, Power of Attorney, etc.
Under the second category, Stamp duty charges are dependent upon the value mentioned in the document. Such documents are Mortgage Deed, Lease Agreement, Title Deeds, Security Bond, Hypothecation Deed, Article of Association, etc.
Under the third category, the Stamp duty depend either on the value mentioned in the document or on the true market value, whichever is higher. Instruments like Conveyance, Agreement for sale, Gift exchange, Partnership Deed, Development Agreement, Transfer of Immovable Property, Trust Deed, Partition, and so on.
Rate of stamp duty:
Stamp duty on non-residential properties whether in a co-operative society or not is at a rate of 5% of the market value. Stamp duty on residential flats in a housing society and building covered under Article 25(d) of Schedule of the Bombay Stamp Act, 1958 attracts concessional rates depending upon its market value as follows:
- For up to Rs. 1,00,000 stamp duty is nil,
- Between Rs. 1,00,001 to Rs, 2,50,000 it is 0.5% of the value,
- Between Rs. 2,50,001 to Rs. 5,00,000 Stamp duty is Rs. 1,250 +3% of the value above Rs. 2,50,000
- Above Rs. 5,00,000 it is Rs. 8,750 + 5% of the value above Rs. 5,00,000.