Stamp duty, also known as a stamp tax or documentary stamp tax, is a tax levied by the Tamil Nadu government on legal documents. And typically related to the transfer of property or other assets. These documents are often required to be stamped before they can be legally enforced.
The main purpose of stamp duty is to:
Generate revenue for the government.
Deter fraudulent property transactions by making them more expensive.
Act as a record of the transaction by leaving a physical mark on the document.
Types of documents subject to stamp duty:
Property sale deeds: When buying or selling real estate, the sale deed requires a stamp duty payment.
Lease agreements: Long-term rental agreements may also be subject to stamp duty.
Mortgages: Borrowing money to purchase property usually incurs a stamp duty on the loan agreement.
Gifts: Transferring ownership of assets through a gift deed may involve stamp duty.
Business contracts: Certain types of business contracts, such as share transfer agreements, might be subject to stamp duty.
Stamp Duty:
Here’s an updated breakdown of stamp duty and registration charges in Tamil Nadu:
Residential Property:
First sale of the flat: 7% of the property market value or agreement value (whichever is higher).
Resale of the flat: 7% of the property market value or agreement value (whichever is higher).
No concession for women on stamp duty for property registration.
Plot Registration:
7% of the property market value or agreement value (whichever is higher).
Gift Deed:
7% of the market value of the greater value given and received.
Simple Mortgage:
1% (on the loan amount) subject to a maximum of Rs.40,000/-.
Mortgage with Possession:
4% on loan amount.
Registration Charges:
1% of the property market value or agreement value (whichever is higher).
Summary:
The charges are calculated based on the higher of the property market value or the agreement value stated in the sale deed.No separate registration fees are levied. The 1% registration charge covers both registration and stamp duty collection. Some municipalities in Tamil Nadu might have additional charges like water tax, drainage tax, etc payable during property registration.
It’s advisable to consult with a lawyer or a property tax consultant for accurate calculation and specific information applicable to your case.
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