There are numerous additional costs associated with real estate investing. The government receives money from some of these fees, such as stamp duty and registration fees. Due to their importance in completing a real estate transaction, stamp duty and registration fees are necessary extra expenses. As a result, before making an investment in real estate, you must be aware of all pertinent information regarding the stamp duty fees.
What is Stamp Duty?
Stamp duty is a type of tax that buyers of new properties must pay to the state government. Stamp duty must be paid because it serves as a valid legal record of ownership and the purchase-sale transaction. In India, the property’s stamp duty fees range from 5 to 9% of the property’s value. In order to calculate the stamp duty, a percentage is applied to the market value, circle rate, or consideration value of the property, depending on which is higher. As an illustration, A decides to sell his property for the agreed-upon sum of Rs. 70 lakhs even though the property’s market value is Rs. 60 lakhs. The agreement value in this instance will be subject to stamp duty because it is higher.
Who pays Stamp Duty Charges?
Stamp duty fees are typically paid by the home buyer. There are, however, some situations in which both parties pay the stamp duty fees. The homebuyers may face penalties if they do not adequately disclose the stamp duty charges. In general, violators must pay 8–20% of the actual stamp duty or risk being imprisoned depending on the state. However, the exact penalty varies from one state to another. Additionally, the law suggests a 2% reduction in stamp duty if the property is registered in the name of a female family member.
Stamp duty charges in Tamil Nadu in 2023
In Tamil Nadu, the stamp duty for more than 20 different legal transactions—including adoption deeds, affidavits, duplicate agreements, canceled agreements, and memoranda of association for corporations—has been revised after 20 years. Stamp duty for real estate registration, however, is unchanged. The Assembly was presented with the Indian Stamp (Tamil Nadu Amendment) Act 2023, which included the announcement that the stamp duty on adoption deeds would rise from Rs 100 to Rs 1000, the stamp duty on affirmations or declarations from Rs 20 to Rs 200, and the stamp duty on duplicate agreements from Rs 20 to Rs 500. The increase was put in place to lower the costs associated with printing stamps with lower denominations.
Stamp Duty and Registration Charges for Various Documents in Tamil Nadu 2023
The stamp duty and registration charges for different document categories in Tamil Nadu are as follows:
| Document Category | Stamp Duty | Registration Charges |
| Gift | 5% of the market value of the property | 2% on the market value of property |
| Exchange | 5% on the market value of the greater value property | 2% on the market value of the greater value property |
| Conveyance/Sale | 5% of the market value | 4% on the property’s market value |
| Simple Mortgage | 1% on the loan amount subject to a maximum of Rs 40,000 | 1% on the loan amount, subject to a maximum of Rs 10,000 |
| Mortgage with Possession | 4% on the loan amount | 1% on the loan amount subject to a maximum of Rs 2,00,000 |
| Sale Agreement | Rs 20 | 1% on the advance money (If possession is given, 1% of the total amount is considered.) |
| Agreement relating to building construction | 1% of the value of construction or the consideration specified in the agreement, whichever is higher. | 1% of the value of construction or the consideration specified in the agreement, whichever is higher. |
| Cancellation | Rs 50 | Rs 50 |
| Partition among family members | 1% of the market value, subject to a maximum of Rs 25,000 for each share | 1% subject to a maximum of Rs 4,000 for each share |
| Non-family members partition | For separated shares, around 4% of the market value of the property is considered | For separated shares, 1% of the market value of the property is considered |
| General Power of Attorney (POA) to sell immovable property | Rs 100 | Rs 10,000 |
| General POA to sell immovable property (power given to family member) | Rs 100 | Rs 1,000 |
| General POA to sell a movable property for other purposes | Rs 100 | Rs 50 |
| General POA given for consideration | 4% on consideration | 1% on consideration or Rs 10,000, whichever is higher. |
| Partnership deed where the capital is within Rs 500 | Rs 50 | 1% of the capital invested |
| Partnership deed in other cases | Rs 300 | 1% of the capital invested |
Registration of Settlement Deed for Immovable Property in Tamil Nadu
Registration is required in Tamil Nadu to guarantee the legality of an immovable property settlement deed. The registration procedure necessitates the submission of the parties’ original title document (and Patta), encumbrance certificate, identity proof, and Aadhaar proof. The registration fees and stamp duty, which are also due, are calculated based on the market value of the property. The registration fees are equal to 1% of the property’s value, up to a maximum of Rs 4,000, and the stamp duty charge is equal to 1% of the market value of the property, up to a maximum of Rs 25,000.
Stamp Duty and Registration Charges in Tamil Nadu for Women Property Owners
In Tamil Nadu, there is no exemption for female property owners from paying stamp duty and registration fees; all individuals, including joint owners, are subject to the same fees. The registration fees are equal to 4% of the property’s value, and the stamp duty fees are equal to 7% of the market value of the property. In order to complete the registration process, property buyers in Tamil Nadu must pay a total of 11% of the property’s value in fees.
Bottom Line
Stamp duty payments are necessary adjustments that must be made in order to acquire the property’s legal ownership. It is required for the formal transfer of ownership and becomes due upon registration or the execution date of the paperwork. The registration procedure for the property can be challenging. With the assistance of a top-notch real estate agent, the procedure can be made more comfortable. Assetmonk is a smart real estate platform that provides you with RERA-approved projects. Assetmonk also helps ease your real estate transactions in Chennai, as it offers carefully vetted assets customized to meet the objectives of different investors.
FAQs:
The Tamil Nadu Assembly has approved the Indian Stamp (Tamil Nadu Amendment) Act 2023, which amends the stamp duty rates for more than 20 different legal transactions, including adoption deeds, affidavits, duplicate agreements, canceled agreements, and memoranda of association for corporations. Affirmation or declaration fees have increased from Rs 20 to Rs 200, and duplication of agreement fees have increased from Rs 20 to Rs 500. These are just a few of the significant changes.
Depending on the type of document, Tamil Nadu has different stamp duty and registration fees for various document categories. For instance, the registration fee is 4% of the property’s market value, while the stamp duty for conveyance/sale is 5% of the market value. Similar to this, the registration fee is Rs 10,000 and the stamp duty for a general power of attorney (POA) to sell real estate is Rs 100.
The stamp duty and registration fees in Tamil Nadu are the same for men, women, and joint owners; there is no exemption for female property owners. The registration fees are equal to 4% of the property’s value, and the stamp duty fees are equal to 7% of the market value of the property.
The original title document (and Patta), encumbrance certificate, identity proof, and Aadhaar proof of the parties involved are all required in Tamil Nadu in order to register an immovable property settlement deed. In addition, you must pay registration fees and stamp duty charges, each of which is equal to 1% of the value of the property up to a maximum of Rs 4,000 and Rs 25,000, respectively.