Stamp Duty and Registration Charges in Surat, Gujarat

By Green Group, 7/12/2019 1:47:09 PM

In India, the considerable significance adheres to the ownership of property. While for the rich, it implies a sense of power and prestige, for the vast majority of the middle-class population, it is a cherished dream and unfortunately, for the less privileged, it is a luxury beyond reach. While some countries have simplified the process of buying property, including the authentication of ownership documents by the government, in the Indian context, the process of identifying the right property is fraught with several risks, legal and regulatory hurdles. Buyers are often at the mercy of brokers or builders and motivated to make decisions, by the promise of exponential returns or irresistible offers. However tempting and lucrative the prospect may appear, it is imperative for the buyer to exercise due caution and obtain appropriate legal advice, to safeguard his interest before buying a property in Gujarat.

Gujarat property registration procedure is governed by the Registration (Gujarat Amendment) Act, 1908. Any transactions that involve an immovable property should be registered to ensure a clear transfer of title to the property owner. Once the property registration procedures have been completed, it becomes a permanent public record. The immovable property registration process involves the preparation of deeds, paying the applicable stamp duty and registration fees for the deed to be legally recorded. The Inspector General of Registration, Government of Gujarat, manages the registration or transfer of property in Gujarat.

Stamp duty varies from 4.9% of the total property cost. It depends on various factors such as the location of the property, type of property, property status, and gender.

The registration charges are 1% of the total or registered property valuation.

Why one should pay stamp duty?

A house sale agreement, on which the stamp duty has been paid, acts as legal evidence in the court in case of a dispute. When you pay stamp duty, it is automatically recorded in the property purchase agreement maintained by the government. It is proof that a property is officially registered in your name.


What will happen if the stamp duty payment gets delayed?

Stamp duty should be paid on time, before, on the day or the next working day of the execution while actually signing the agreement. If it gets delayed, you would be required to pay a penalty of 2% every month on the deficit amount of the stamp duty, subject to the maximum rate of 200%.

Stamp duty is calculated on the market value, whichever is higher. In addition, it is payable only on the contents of the registration document, and not the transaction value. Stamp duty is imposed on every agreement and not on every person involved in the transaction. To assess the market value, stamp duty authorities refer to the Stamp Duty Ready Reckoner, which is issued on 1st January every year by the government. Stamp duty charges vary from state to state. The amount also depends on several other factors like-

  • Old or new property

  • Rural or urban property

  • A male or female property owner

  • Agricultural or non-agricultural

  • Freehold or leasehold

  • Residential or commercial units

  • Multi-storied apartments or independent houses

The rate of stamp duty for registering a deed of immovable property registration in Gujarat is tabulated here:

1 The basic rate of Stamp Duty 3.50 percent
2 Surcharge at the rate of forty percent on basic rate 1.40 percent
3 Total Stamp Duty 4.90 percent

(Note: Rs. 4.90 for every Rs. 100 need to be paid as stamp duty for Gujarat Property Registration).

For registering property online in Gujarat, the applicant needs to pay a registration fee along with stamp duty to Government. The property registration fee needs to be paid for the maintenance of ownership records. The basic rate of Registration Charge is 1.00 percent.

Additional charges for registration are-

  • Advocate fees as per rate from time to time

  • Folio fees of Rs. 10 per page or as per the rate revised by the government from time to time

  • Index fees of Rs. 50 per copy

Few tips and tricks to save on Stamp Duty and Registration Charges:

  • If the ownership of property in Surat is named after female family member then during registration procedure you don’t have to pay stamp duty and registration charges.

  • Claim the amount up to Rs. 1,50,000 paid on stamp duty and registration as a deduction under section 80C.

  • Register the property at the ready reckoner prices published by the government. This reckoner is also called circle rates or guidance value. These are the base prices, and always lower than the actual market value of the property. Selling or buying below the base prices would be deemed a black money transaction. Both the seller and buyers can reap the advantages by agreeing to a ready reckoner price. The seller can save on the Capital Gains Tax while the buyer can reduce his overall cost of the property acquisition. This is a legal method, and hence safe.

In 2019, the Modi government had said that soon stamp duty on affordable houses could be waived. You may have to wait for some time, as the housing board is trying to convince state governments to cut stamp duties and registration fees. If the move is successful, you will definitely save some bucks. In mid-April, Prime Minister Narendra Modi had said that every Indian should have a house by 2022, on the 75th anniversary of the country’s Independence. Green Group to support Prime Minister’s mission also aims to build 9000 homes by 2022.