I Earn ₹50,000 pm, Should I Buy A Budget Home Now?

Feb 26,2020 / By Commonfloor / No Comment

If you’re like most people, investing in a house is undeniably a dream. It is thus no doubt that owning a home from your hard-earned money is the most extraordinary asset that you can have. However, investing in a house is time-consuming and money consuming. Thus, buying a budget home can unquestionably do you good. Nonetheless, the most fundamental component of purchasing a budget home is to do extensive and in-depth research. Before you impulsively plan to sign on the house agreement documents, understanding your budget is quite indispensable. Buying a home based on your monthly salary, i.e., Rs.50,000 unquestionably depends on your overall fiscal health. The following are some tips that can help you understand if buying a house with your salary is the right decision for you.

Analyze the house-hold income after eliminating the tax

In India, tax undeniably takes away a fair amount of money from our income. Thus, ensure analyzing your overall income after eliminating the tax to get a vague idea of the amount you can invest for the house. There are several calculating apps online for understanding how much money you will be left with after paying the appropriate tax.

Analyze your monthly expenses.

Household, Personal loans, and bills are a few of the most vital aspects of your living. It is best advised to take out time to jot down your monthly expenses such as insurance, bills, utilities, etc. Moreover, if you’re a family man, there are several other necessities and expenses, such as tuition fees of your children and groceries for cooking. Therefore, eliminating these expenses will help you analyze your expendable income. Making use of financial tracking apps can give you the maximal benefit of making a reliable and money-conserving investment.

Understand your budget

Purchasing a house under your budget of Rs 50,000 pm is possible, provided, you understand all your expenses and necessities. Make the required adjustments and cut down your unnecessary expenses so that you can increase your savings. Thus, this way, you’ll be making an economically wise decision.

Analyze your debts

It is best advised to either pay off your entire debts from earlier or to minimize them to a potential extent. According to experts, getting approved for a home loan and handling your mortgage payments becomes much easier if you pay off your debts. What’s more beneficial, you ask? Well, the most appealing element about paying off your debts is that it can enhance your credit score. The credit score is unquestionably one of the determining factors of purchasing a house. Therefore, minimize your debts and other expenses to have the best chance of getting a personal loan.

Do not be impulsive

We all know how exciting and overwhelming it is to buy a house. However, it is not the right step to impulsively buy a house without doing the necessary research. It is best advised to save up some money so that your deposit can be paid conveniently. Although, a deposit might seem like a hefty amount of cash, saving up and planning your income usage strategically will help enhance your chances of getting a home loan, and paying the deposit.

Have a realistic plan

There is no doubt that a fancy, large, and comfortable house can have your attention in minutes. However, this does not mean that you can impulsively choose a home that will take away years and years of your life to pay back the debts. Thus, ensure choosing an affordable home. Analyze additional expenses such as the maintenance cost, homeowner association fees, tax, etc. Moreover, it is best advised to consult banks to understand if you’re eligible for a loan.

Have options

Most of us make the mistake of investing in the very first home that we see. How is this disadvantageous, you ask? Well, having options will give you the benefit of analyzing if you’ll be making a wise investment. Checking similar houses can help you potentially bargain your way of making a smart and reasonable investment for yourself. Therefore, take out some time to properly analyze and search for houses.

Make use of a home inspector

Hiring a home inspector is the most primary yet imperative element of understanding any potential threats that you might need to deal with in the future. Thus, make sure to hire a reliable home inspector to detect any potential damage and other issues that this house might cost you.

To sum up,

The journey of buying a house is unquestionably exciting and infuriating. Nonetheless, don’t rush into making such a big decision. Take your time to analyze your financial health and choose a home accordingly. CommonFloor is a leading online portal offering groundbreaking services in the real estate industry for simplifying your property decisions. They are a distinctive company offering a multitude of remarkable services for sellers, real estate professionals, and home seekers.

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Is Indian Real Estate Sector Going to Revive in 2020?

Feb 11,2020 / By Prahalad Singh / No Comment

Real Estate Sector in India

The real estate sector in India has been witnessing weak sales for the last few years, resulting in a sharp drop in its significant contribution to the country’s Gross Domestic Product (GDP). Overall, the year 2019 proved to be a mixed year for the nation’s realty sector as the commercial sector flourished but that was not the case with residential real estate. However, some positivity has been seen in the market as a result of various announcements made by the government last year. Government announcements like NHB raising liquidity for Housing Finance Companies, relaxation of External Commercial Borrowings (ECB) funds, and approval of a Rs 25,000-crore alternate fund have all been made at a positive pace.

Nation’s real estate sector saw a fall after banks limited lending activity post the NBFC crisis in 2018 and the situation worsened further in 2019 to a sharp demand crisis. Not just the real estate sector but a large number of other industries indirectly related to the sector have also suffered the heavy winds of low demand.

Real estate developers, consumers, and investors have been facing the burden of the fall in the housing segment for the last few years. From unsold inventories to incomplete construction to delayed projects, the segments had faced a lot of difficulties that have been pointing to negative sentiments.

In spite of the government’s measures to revive the weak realty market, there has been no positive result except limited growth of just 1% in the year 2019 but far from reaching its full potential.

According to the International Monetary Fund, India’s economy grew by about 4.8% in 2019, a sharp drop from 6.8% in 2018. Similarly, unemployment rose to 7.5% in the last 3 months of 2019.

There is an urgent need to approach the challenge of liquidity suffered by the sector, especially after the NBFC cash crisis. Liquidity will improve sentiment in the market with a regular supply of ready to move-in homes. If the challenge is not tackled on priority, it will block the confidence of developers as well as buyers which may seriously affect the realty sector as well as the economic growth of the country.

Few bold govt measures that could revive the real estate market in the year to come including tax rebate hike, personal tax relief, higher liquidity, better land reforms and fast infrastructure development for raising homebuyer sentiments.

The industry body has also suggested the government to reconcile the Insolvency and Bankruptcy Code (IBC), GST and individual taxes to help increase demand for unsold properties, which increased sharply in 2019.

The reviving real estate sector would also improve overall demand as the sector employs a large number of laborers belonging to lower-income groups. As a result, it could lead to a strong rise in rural demand.

However, it needs to be noted that the measures are not yet sufficient in size and will not be able to cater to real estate developers (small and big) and players in Tier 2 and 3 cities. Most importantly, the measures need to be backed by other factors mentioned below to bring in a proper resolution. Instant step in terms of implementation of several schemes and processes is expected to bring momentum into the sector in 2020.

Budget 2020-21 Fails to Address Major Concerns of Realty SectorFreal estate

It offers a few solutions to revive the nation’s weak economy. The government’s $428 billion budget for 2020-21 considered a series of modest initiatives, including planned investments in new roads and airports and personal income tax cuts, along with an increase in bank deposit insurance to encourage customers worried by high-profile bank failures.

But it offered no large incentive plan to produce more jobs or money in the pockets of India’s 1.3 billion residents, most of whom rarely get their food through farming or work in the informal economy. Nor did the budget offer any additional support for the country’s weak financial institutions.

Few Govt measures that may put real estate back on track in 2020 includes:

Industry Status

For a long time, the real estate market demands an industry status that can help it with finances at a lower cost, especially at times when the availability of funding is a major barrier for the industry.

Single-window clearance

The sector, which is struggling to deal with multiple government offices for project approval, wants a single-window clearance facility to initiate the project implementation faster.

Removal of Multiple Rates or Taxes

Multiple rates or taxes need to be removed into a single standard GST rate.

Incorporation of Stamp Duty under GST

The cancellation of stamp duty or its incorporation under GST.

Lowering Interest Rates

In 2019, the Reserve Bank of India (RBI) reduced the policy rates (Repo Rate) by 135 basis points. But the registered commercial banks didn’t follow the procedure. So the average marginal cost of lending rate (MCLR) of banks has decreased by only 64 bps. The lower interest rates will benefit to decide the existing liquidity crisis and boost housing demand.

Rebate in Income Tax

Rebate in individual income tax will be another help to the sector as it will decrease the financial burden of the buyers and improve their expendable income.

Housing Loan Interest Rates to be Reduced

Interest rates on housing loans also need to be reduced to encourage demand and sales. Restoration of income tax gains on a 2nd home can benefit homebuyers in a big way.

Notional Rental Income

We expect the government to release organizations involved in real estate business from the burden of tax on notional rental income or the period of 1 year should be extended to 5 years. This is pushing buyers away from the market and affecting the sector as well.

Restriction on Home Loan Interest Paid

The govt should also remove the restriction of an additional deduction of Rs 1.5 lakh paid on a home loan up to Rs 35 lakhs with total values not exceeding Rs 45 lakhs.

The government should implement land reforms and amend the acquisition process.

People’s Expectations:

It is expected that the real estate sector will hopefully observe a growth story in 2020. Covering 1,600 projects with 458,000 housing units under the center’s announcement will help in raising buyer confidence and is expected to generate significant employment. We expect the govt to give full support to the sector not just in terms of the announcement but also implementation. The year 2020 needs a device to protect developers from the existing liabilities and stuck projects. It also needs to incentivize stressed projects in various ways.

At the same time, the central government has projected that the economic growth would rebound to as much as 6.5% for the current fiscal year.

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Section 80EE – Income Tax Deduction on Home Loan Interest

Jan 15,2020 / By Prahalad Singh / No Comment

Home loan tax benefit under section 80EE

What is Section 80EE and its advantage?

Section 80EE permits Income Tax benefits on the interest portion of the home loan taken from any public/private financial institution. The deduction permitted under this section is for the interest paid on a home loan for up to a maximum of Rs 50,000/fiscal. You can continue to claim the deduction until you have fully repaid the loan amount.

What are the features of the Section 80EE deduction?

Following are the feature of Section 80EE Deduction under Income Tax:

The deduction under section 80EE is available only for individuals. This means, if you are a Hindu Undivided Family (HUF), an association of persons (AOP), a company or any other kind of taxpayer, you can not claim any benefit under this section.
This deduction i.e. up to Rs. 50,000 is over and above the Rs 2 lakh limit under section 24 of the Income Tax Act.
To claim this deduction, you should not own any other house property on the date of the loan sanction from a financial institution.

What is the maximum amount of tax-deductible for a home loan?

The maximum tax-deductible under specified sections for a home loan is listed below:

Income Tax Act Sanctions	Nature of home loan deduction	Maximum amount deductible
Section 80EE	Additional home loan interest tax benefit for first-time homebuyers	Rs 50,000
Section 80C	Tax deduction on the principal repayment	Rs 1.5 lakh
Section 24	Tax deductions on the interest amount payable	Rs 2 lakh

How to Calculate Home Loan Interest?

Your home loan interest rate directly affects how affordable the loan is and how conveniently you can repay it. Considering your repayment is in the form of EMIs that include both interest and principal parts, a lower home loan interest keeps down your EMIs. Therefore, it is best to choose a lender who offers low home loan interest rates. It is always advisable to calculate your home loan interest rate before you submit your application.

How Home Loan Interest is Calculated in India?

In India, there are two types of home loan interest rates i.e. fixed and floating. When you choose a fixed interest home loan, the interest stays constant throughout the loan period. On the other hand, when you choose a floating interest rate, it changes from time to time. There are several factors that are taken into consideration to arrive at a value for either type of interest rate.

Can I claim tax benefits on home loan for an under-construction property?

The following rules apply for such deduction for an under-construction property:

If the construction is completed within 5 years, a deduction of Rs.2 lakh is applicable.
If the construction is not completed within 5 years, only up to Rs.30,000 is deductible.

What are the eligibility criteria for claiming Section 80EE Deductions?

The Eligibility criteria for claiming 80EE deductions under home loan requires a taxpayer has to make sure of the following points:

Only individual taxpayers can claim deduction under Section 80EE on properties purchased either individually or jointly. If an individual has bought a property jointly with his or her spouse name and they are both paying the installments of the loan, then both can individually claim this deduction.
E-tax benefits are not applicable to the Association of Persons (AOP), companies, Hindu Unified Families (HUF), trusts, etc.
Tax benefits under Section 80EE can only be claimed by first-time home buyers. For claiming this deduction, the individual must have taken the loan from a financial institution for buying his/her first home or residential property.
Section 80EE is applicable on a per-person basis instead of a per property basis.
To claim this benefit, it is not mandatory for the taxpayer to live or stay in the property for which he or she is claiming this deduction. Borrowers residing in rented houses can also claim this deduction.

What are the conditions for claiming deductions under Section 80EE?

The following are the conditions for claiming deduction u/s 80EE:

The loan must be approved between 01.04.2016 to 31.03.2017
The loan amount taken for the house must be Rs 35 lakhs or less
Value of the house should be Rs 50 lakhs or less
The loan must be approved by a Financial Institution (FI) or a Housing Finance Company (HFC)
As on the date of the approval of the loan, no other house property must be owned by you.
The deduction can only be claimed by individuals for the house purchases jointly or singly.

What are Tax Benefits on Principal Re-paid?

U/S 80C of the Income Tax Act, the maximum deduction allowed for the repayment of the principal amount of home loan is Rs. 1.5 lakh. Deduction u/s 80C also covers investments done in the PPF Account, Tax Saving Fixed Deposits, National Savings Certificate, Equity Oriented Mutual funds, etc. subject to the maximum of Rs. 1.5 lakhs.

Apart from this, there are stamp duty and registration charges that one can claim under the above-mentioned section. However, the claim can only occur in the year in which the payment has been made.

There is a provision under which this repayment of the principal amount of housing loan is allowed. The deduction is only possible after the house gets fully completed and there is a completion certificate issued by the local body for the same. Any under-construction house is not going to be a part of this section.

Is home loan top-up eligible for tax deduction?

A home loan top-up is eligible for tax deduction u/s 24(b) and 80C only if it is used for -

Acquisition/construction of a residential property.
Renovation or repair of such property.
Such claims should also be availed with valid receipts and documents.

Who can Claim Section 80EE Deduction?

Section 80EE deduction can be claimed by an individual for the amount paid as interest on the home loan. The maximum deduction u/s 80EE is Rs.50,000. Section 80EE deduction can be claimed over and above the deduction of section 24 and section 80C which are Rs. 2,00,000 and Rs. 1,50,000 respectively.

What is Covered U/S 80EE?

Section 80EE, Income Tax Deduction on Home Loan Interest. Section 80EE allows income tax benefits on the interest portion of the house property loan taken from any financial institution. As per this section, you can claim a deduction of up to Rs. 50,000 per fiscal.

What is the difference between Section 80EE and Section 24?

The deduction for interest on a home loan can be claimed u/s 24 of the Income Tax Act, 1961. The limit u/s 24 is Rs. 2,00,000. This deduction can only be claimed if the owner or his or her family members live in the house property. The whole interest shall be put off as a deduction in case the house is on rent.

If one is able to satisfy both conditions of the sections i.e. Section 24 and Section 80EE, the individual can avail benefits under both sections. In order to do that, the individual will first need to consume the limit u/s 24 and then claim the additional benefit u/s 80EE. Hence, the deduction u/s 80EE is in addition to the limit of Rs. 2,00,000, as u/s24.

Is There Home Loan Tax Benefit on a Second Home?

If you are taking a second home loan to buy another property, tax gains are applicable to the due interests. Here, you can claim the whole interest amount paid as no cap is applied here.

At present, individuals can claim only one property as self-occupied and make tax payments on the other based on notional rent. In the February 2019’s Interim Budget, a proposal has been put forward saying that an individual can claim a second home as self-occupied property. This tries to help borrowers save more money in the form of taxes.

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Property Tax Collection in Mumbai Dropped by 34%

Dec 19,2019 / By Prahalad Singh / No Comment

Property Tax in Mumbai

Almost 3-quarters down the fiscal, property tax collection in Mumbai displays a 34% shortfall compared to last year as the Brihanmumbai Municipal Corporation (BMC) has issued no residential bills in the middle of confusion over a waiver policy for homes under 500 sq.ft.

Property tax collection in Mumbai was Rs 1,637 crore till 13th December 2019, while last year BMC had collected Rs 2,495 crore till the same date.

Property tax in Mumbai is the largest revenue source for BMC. This year, tax collection has been executed only from commercial firms since the civic body has issued no residential property tax bills at all this year as it has not updated its software and other systems to reject living units under 500 sq.ft while making bills.

The software update has been kept waiting as there is a lack of clarity on whether residential units under 500 sq.ft are to be charged nothing at all or given only a base amount waiver while being asked to pay the other, smaller components of the bill like the various cess on it.

In a recent meeting with the new Chief Minister of Maharashtra Uddhav Thackeray, the civic administration flagged the issue of fund crisis at a time when the BMC plans to take up many big ticket-size projects such as Goregaon-Mulund Link Road and 29.2 km long Coastal Road project.

As per critics, BMC may not touch even half of property tax target

The Shiv Sena, the party which rules the BMC deliberative wing, and is headed by CM Uddhav Thackeray had in its 2017 civic poll manifesto promised property tax waiver for residential units under 500 sq.ft in area.

The BMC also drastically increased its collection target to Rs 8,300 crore this year from the Rs 5,000 crore it used to set itself before now. Critics are skeptical about the Municipal Administration reaching even half of its target.

BMC officials said that the corporation estimates around 4 lakh properties every year. Though the BMC would issue property tax bills amounting to over Rs 5,500 crore every year, the collection target used to be set at only about Rs 5,400 crore.

As outstanding property tax before the beginning of the fiscal was over Rs 10,000 crore, the collection target was improved this time.

A BMC official said, “This time our target for collection is estimated at Rs 8,300 crore keeping in mind the fact that Rs 10,000-crore plus is the outstanding property tax demand of every year that is carried forward on average and we should begin recovering it”

The pending software upgrade and delay in sending out bills were obstructing a significant revenue source, said Asif Zakeria, a Bandra Corporator.

It is expected that the collection will rise once the clarity on the waiver is achieved and bills are issued, said BMC official. They further said that many companies pay property tax in the last month. Therefore, the tax collection in March month always the highest.

The poor collection was due to offering rebates for garbage segregation by BMC, allocating large sums to the cash-strapped BEST Undertaking and commencing infra projects. “I am going to demand a financial white paper,” said Samajwadi Party Leader in the BMC Rais Shaikh.

How to calculate property tax in Mumbai?

The property tax is a % of the capital value of the property.

Property Tax = Tax rate * Capital Value

Here Capital Value = Rate of base value * Total carpet area/area of land in case of vacant land * building type * age factor * usage factor * floor factor

Property tax payment due date and penalty

Due Date: 30th June

Penalty: It is charged at 2% per month in case of a delay in payment beyond the due date on the outstanding amount.

How to pay property tax in Mumbai?

Property tax can be paid both online and offline.

Online payment

BMC/MCGM

Visit BMC online portal i.e. https://portal.mcgm.gov.in/irj/portal/anonymous
Under the “Online Services” tab click on “Pay Property Tax”
Enter your property account number and choose whether you need to view “outstanding bills” or view “receipts” or “make payment” and click accordingly

Navi Mumbai/NMMC

Visit NMMC online portal i.e. https://www.nmmc.gov.in/navimumbai/
Under “Online Service” click on “Property” and enter you “Property Code” and click “Search”

Offline Payment

If you want to pay manually, it can be paid at the nearest assistant revenue office or BMC helps centers or citizen facilitation centers at all ward offices.

Who are applicable to get concession/exemption on payment of property tax?

Flats/houses measuring less than 500 sq.ft are exempt from payment of property tax.
A concession of 60% for houses/flats measuring between 500 to 700 sq.ft.
Property particularly used for public worship/charitable purposes.
Properties belong to the Diplomatic or Consular Mission of a foreign state as specified by the government.

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Property Registration Charges In Bangalore 2019

Oct 25,2019 / By Prahalad Singh / No Comment

Property Registration Charges and Procedure in Bangalore 2019

All about Stamp Duty and Registration Charges:

Stamp Duty and Registration Charges in Bangalore are two crucial things you should know while you wish to buy a flat/apartment in Bangalore and applying for a home loan. So, if you are planning to buy a property in Bangalore and have a set budget for the same then you must consider these two charges which you will have to pay for getting your property registered. While Stamp Duty is levied by the state governments on the market value of the property, registration value is levied for registration of documents under the Registration Act, 1908. Most of the states have 1% as Registration Charges.

The government levies a tax when there is a transaction of property or transfer of rights in a property known as “Stamp Duty”. Stamp Duty is imposed on residential and commercial property transactions as well as freehold or leasehold properties. It is one of the most crucial documents as it provides legal status to the property transaction.

Stamp duty is a state matter and is fixed by the state government. So, the rate varies from state to state. Stamp duty is a charge payable on the sale agreement, on or before the date of registration of the agreement.

It depends on factors such as the location of the property, type of property, property status, and gender.

Property Registration Charges and procedure in Bangalore

You can avail tax deductions for these two charges if paid within the overall limit of Rs 1.5 Lakh and only in the ready-to-move-in property. The assessee is the only authorized person for the tax benefits on stamp duty and other registration charges for a particular property and not any other family member. All these tax deductions are only valid for a residential property as the commercial property does not come under the limits of this.

To calculate the registration fee and Stamp duty, different standards are used for different property types in Bangalore:-

For multi-story apartments in Bangalore, the super built-up area is considered for calculation
For plots in Bangalore, the sq ft area of the plot is multiplied by the current Guidance Value of that area
For independent houses, the total built area is estimated

How to register your property online in Bangalore?

The Karnataka government recently launched an online portal to allow property owners to access property-related documents, rather than visiting the sub- registrar’s office. There are over 250 sub-registrar offices listed on the portal where people can make their property registration.

Visit Karnataka Govt’s KAVERI portal i.e., https://kaverionline.karnataka.gov.in and register as a new user and follow the step-by-step instruction

How are stamp duty and registration charges calculated in Bangalore?

To calculate stamp duty and registration charges in Bangalore, follow these simple method-

Let’s assume you have finalized a property measured 1,000 sq.ft. in Bangalore. The Guidance Value is Rs 6,000/sq.ft. Next, there is the parking charge of Rs 2 Lakh and floor rise charge of Rs 30/sq.ft. Now, let’s say that the property is located on the 5th floor, then your floor rise premium will come up to Rs 150 per sq.ft. (30*5=150). Thus, the total base price will be Rs 6,150/sq.ft.

Saleable value of the property = 1,000 x 6,150 = Rs 61,50,000 (basic cost) + 2,00,000 (car parking) = 63,50,000
Registration charges = 1 % of 5,325,000 = Rs 63,500
Stamp duty = 5.6 % of 63,50,000 = Rs 3,55,600
Thus, the total cost of property = Rs 67,69,100

Why is stamp duty important?

It is one of the most significant or essential documents that provide legal status to your property transaction. At the same time, it generates revenue for the state.

How much is the stamp duty and registration charges in Bangalore? And how it is calculated on property transactions?

Type of Fee	Amount (Rs)
Registration Charge	1% of the property value
BBMP, BMRDA & Village Area Added Cess	10% on the stamp duty
Stamp Duty	5.6% of the property value
BBMP & Corporation Added Surcharges	2% on stamp duty
BMRDA & other Surcharges	3% on stamp duty

Stamp duty is charged only on the total saleable amount of the property, which is calculated by first multiplying the size of the property with its guidance value or the market value given by the builder. Then, car parking and floor rise charges, or preferential location charges (PLC) are added to give the total saleable value of the property.

Saleable Value = Basic Cost (Size of property x Guidance Value) + Parking Charges + Floor Rise Premium & Preferential Location Charges (PLC), if any.

Registration charges = 1%of the saleable Value

How can I pay stamp duty and registration charges in Bangalore?

You can pay these charges in the sub-registrar’s office through the following means for property registration in Bangalore:

Purchase stamps from the treasury or authorized stamp vendors
Made payment to the government through DD/ pay order issued by any nationalized bank/scheduled bank or challan
The document can be written or printed on plain paper, and the stamp duty can be paid through DD/ pay order issued by any nationalized bank/ scheduled bank or challan within two months of the date of execution of the document and certified by the jurisdictional district or sub-registrar.
In some states, you can also pay the necessary stamp duty amount online or, through RTGS/NEFT.

Are there any tax gains on payment of stamp duty and registration charges?

Yes, there are multiple deductions. you can avail tax deductions for these two charges if paid within the overall limit of Rs 1.5 Lakh. But, there are some restrictions added to it. These include:

All the deductions are only valid for a new property and not for resale property.
The payments must be made in the previous financial year as payments made later are not acceptable for a tax deduction. If you bought a house in the financial year 2018-19 for Rs 50 Lakh and paid Rs 5 Lakh as stamp duty and registration charges, then you are qualified for tax benefits calculated during the 2019-20 financial year, only if all the expenses have been paid during 2018-19.
You can claim tax deductions only for the ready-to-move-in property and not for under-construction or completed property.
As per Section 80C of the Income Tax Act, the maximum limit for tax benefit is set at Rs 1.5 Lakh.
All these tax deductions are only valid for a residential property as the commercial property does not come under the ambit of this, one can not get any tax rebate for that.

What are the key factors that determine stamp duty Charges?

The stamp duty percentage depends on various factors. These include:

The property’s age:

Since stamp duty is calculated on the total value of the property, the age of a property plays a significant role in setting stamp duty charges because older properties manage to be less expensive than newer properties.

Age of the property holder:

Senior citizens usually pay a lower stamp duty charge in most states. This is why the age of a property holder plays an important role in determining stamp duty charges.

Type of property:

You have to pay more stamp duty for a flat/apartment comparison to an independent house, etc.

Gender of the Owner:

Women usually pay a subsidized stamp duty fee when compared to men in India. Men have to pay about 2% more than a woman.

Purpose of the property:

Commercial properties normally attract a higher stamp duty fee in comparison to residential properties. This is so because commercial buildings would normally need a lot more amenities when compared to a residential building.

Location of the property:

The location of the property also determines the stamp duty fee payable by an individual. A property located in an urban area attracts higher stamp duty than a rural or suburban area.

Amenities:

The number of amenities that a property has also directed the stamp duty fee. A building with more amenities requires a higher stamp duty fee while a building with lesser amenities will have a lower stamp duty fee. Amenities like a community hall, library, swimming pool, gym, club, sports area, lifts, gym, children play area, etc., will need an individual to pay a higher stamp duty fee.

Stamp Duty Calculator

Stamp Duty ranges from 3% to 10% depending on the slab decided by the state government. It is calculated on the higher value between the Guidance Value (circle rate/ready-reckoner rate) and the agreement value of a property. For instance, if the agreement value of a property is Rs 60 lakh and the value according to Guidance Value is Rs 50 lakh, then the stamp duty would be calculated on the higher value, i.e., Rs 60 lakh

What happens, when someone pays insufficient stamp duty on their property?

For saving stamp duty, many people show a reduced property price in their agreement. As a result, the government has to suffer heavy revenue loss. If you pay insufficient stamp duty, you can be penalized huge for the same. The punishment and penalty for evasion of stamp duty may vary from state to state. The penalty can range anywhere from 8% to 20% of the actual stamp duty and term of imprisonment as per the state rules.

Data sources: Google

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Category : Property tax