Property registration charges in Bangalore all you need to know

It is imperative to register the sale deed under the provisions of the Registration Act 1908. So, if you are planning to buy a property in Bangalore – stamp duty and registration charges are the two crucial things you should consider and have to set a budget for the same. As per the ongoing rates, you are demanded to pay 5% of the total or registered property value (above Rs 20 lakh) as stamp duty and 1 % of the total or registered property value as registration fees in Bangalore. Further, check out this article on Property registration charges in Bangalore, All you need to know for more basic details…

Why register property documents?

Registration of credentials makes the property transaction become a perdurable public record. According to the Transfer of Property Act - Right or interest can be acquired if the deed is registered. Hence, if a deed of transfer, which is compulsorily registrable, is not registered, it will not be legally sound or enforceable.

Why is stamp duty important?

Stamp duty is a sum payable on the purchase acknowledgment, on or before the date of registration of the agreement. It is one of the most decisive documents as it provides judicial status to the property transaction.

How the stamp duty is calculated in Bangalore?

Stamp duty is a state subject and is nailed by the state government. It is determined by aspects like the property age, owner gender, location, age of the property owner, amenities available in the property and its purpose.

List of factors that determine charges

The property’s age - Since stamp duty is computed on the outright value of the house or property, the age of a particular property plays an important role in determining stamp duty charges because the older properties are less expensive.
Location of the property – Property set in an urban area draws a higher stamp duty than a rural or suburban area.
Purpose of the property or asset - Stamp Duty Fee is higher in the case of commercial property.
Age of the property holder or owner - Senior citizens pays lower stamp duty charge in most states.
Gender of the Owner - Women in India pay a subsidized stamp duty fee compared to men.
Amenities/facilities - Higher stamp Duty for more amenities in the residential or commercial premises.

How are the stamp duty and registration charges calculated?

To calculate the registration fee and stamp duty, different standards are considered for different property types.

For plots, the sq ft area of the plot is multiplied by the prevailing guideline value of that area
For multi-story apartments, the super built-up area is considered for calculation
For independent houses, the total constructed area is considered.

How to register property/asset online in Bangalore?

The Karnataka government has recently lofted 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 (without any constraints).

What happens if a person pays an insufficient stamp on his property?

For saving stamp duty, many people show a reduced property price in their agreement. As a result, the government has to suffer heavy annuity loss. If you pay insufficient stamp duty, you can be penalized huge (ranging from 8% to 20% of the actual stamp duty) for the same. The punitive measures and penalty for evasion of stamp duty may vary from state to state.

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

Secure stamps from the treasury or authorized stamp vendors.
Make remittance 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 2 months of the date of accomplishment 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.

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

Yes, you can avail tax deductions for these charges if paid within the limit of Rs 1.5 Lakhs.

But there are certain restrictions involved:

All the deductions are only bonafide for a new dominion and not for resale property.
You can claim tax deductions only for the ready to move in property and not for under-construction property.
As per Section 80C of the Income Tax Act, the maximum limit for tax benefit is set at Rs 1.5 Lakh.
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.
All these tax deductions are only valid for a residential property as the commercial property does not come under the realm of this.

Conclusion

Finally, stamp duty rates are not fixed and are bound to change from time to time. These charges are mostly dependent upon the established market rate of the property, dilation of city limits and property market consummation.