The overall estimate of stamp duty can either be a fixed amount a certain percentage of the overall amount which will be mentioned in the document. States like Karnataka owns 10% stamp duty rate of the actual market value on properties that are situated within the metropolitan sectors.
Stamp Duty Payments and Penalties
There is no fixed rate on stamp duty as the figure seems to fluctuate every year with the government releasing new charges. One can use a stamp duty calculator for generating the current rate specified by the government. The estimate usually varies on the area the property is bought.
The stamp duty payment is liable for both the buyer and seller before the property documents are signed up. Both the parties need to provide a signature with a cross on the stamp for safeguarding and making it unusable on other documents. Following a delay can cause the price to rise up by 200%.
Impact of Stamp Duty on Income Taxes
To understand the effect of stamp duty rates on incomes taxes you have to consider three stages.
- In case the specified amount of a property is lower than the rate offered, the buyer is liable to pay the latter amount. It is termed as the circle rate.
- If the mentioned price is higher than that of the seller’s rate, the buyer has to pay the amount mentioned within the sales agreement.
- The tax rules will vary in cases of properties that are rented out or other residential outlets. For making the necessary purchase one can show the principal amount as well as the claims of interest on home loans. The estimated stamp duty rate can be known by any party if they use a stamp duty calculator.
Reference Read: Stamp Duty Rates in India: Why They Matter
