Know more about Stamp Duty & Registration

Stamp Duty & Registration

What are the taxes applicable on various types of properties and what is the amount that home buyers need to pay, by law? We simplify this confusing process


Goods and Services tax GST is an indirect tax applicable throughout India which has replaced multiple cascading taxes levied by the Central and State Governments. The money collected from the tax is given to the Government via all the business entities. In India GST is recently come into form and Earth Group can help you through this effortlessly with their matchless knowledge with regards to GST related to Construciton & buying homes. GST has been levied on goods and services in India from 1st July, 2017. Its new in India but Lodha Global has the complete knowledge to get you through this.

Stamp duty

Stamp duty is payable to the state government. Payment of this duty denotes the legal status of the transaction. A sale agreement that is not appropriately stamped, is not acceptable as confirmation in the court of law.

Goods & Service Tax (SGST)

SGST is payable to the State (SGST) government. This charge is only applicable for under construction properties. SGST is charged at a specific rate on the basic cost of the property (cost of land and construction) and at a different rate on other cost items, such as preferential location charges, floor rise charges, initial maintenance charges, club house, etc.

Registration Charges

The agreement executed between the buyer and seller (owner/developer) of a house property, should compulsorily be registered, as per the Registration Act. If the agreement is not registered, it is not admissible as evidence in a court of law.

Goods & Service Tax (CGST)

CGST is payable to the central government. This charge is only applicable for under construction properties. Service tax is charged at a specific rate on the basic cost of the property (cost of land and construction) and at a different rate on other cost items, such as preferential location charges, floor rise charges, initial maintenance charges, club house, etc.


Who should pay these charges?

“Payment of stamp duty and registration charges is the responsibility of the buyer. However, due to poor market conditions in recent times, some developers have offered to bear this cost. With respect to service tax and VAT, it is the responsibility of the developer to collect it from the buyer and deposit it with the concerned department,” informs Nishant Agarwal, MD, Avighna India.

If the stamp duty and registration charges are not paid, the registration procedure itself will not be complete and therefore, the property would not be legally transferred in the name of the buyer.

Are taxes the same for all classes of home buyers?

According to experts, most of the above taxes and charges are applicable on a similar basis, to all categories of home buyers, except for service tax. The service tax brackets are as follows:

  • If the value of the house property is more than Rs 1 crore, then the service tax chargeable is 4.50% on the sale consideration and 15% on floor rise and other charges.
  • If the value of the house property is less than Rs 1 crore, then, the service tax chargeable is 3.75% on the sale consideration and 15% on floor rise and other charges.

Taxes on an under-construction Vs ready-to-move-in home

Agarwal further explains, “From a tax perspective, the following points are important for home buyers

  • In the case of an under-construction property, all the taxes are applicable.
  • In the case of ready-to-move-in homes, where the buyer is buying from a developer and the occupancy certificate and completion certificate have been received, service tax is not applicable.
  • In the case of ready-to-move-in homes, where the buyer is not buying from a developer, service tax and VAT are not applicable.
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