Plot Stamp Duty And Registration Charges In Bangalore

The streets of Bangalore are always busy, as are its residents. Being a metropolitan city wherein most of the residents have migrated for work, things like buying a new property can be tricky for many. The trickiest bits of information are usually about the procedures to follow, the documents that will be required, and the cost that one needs to anticipate. 

One of the crucial preliminary steps is getting the plot registered. In India, land registrations need to be done with the state governments. Hence, the factors that influence the stamp duty and registration charges vary from state to state. 

The following is a comprehensive breakdown of the stamp duty fees and property registration charges in Bangalore, as determined by the Karnataka state government. You shall also learn how to pay stamp duty fees online as a more time and cost-effective option. 

Plot Registration Charges In Bangalore

The government stamp duty charges, as well as the property registration charges, vary from state to state. While the stamp duty across states is more variable, the registration charges levied by most states are one percent of the market value of the property. 

The plot registration charges payable to the Karnataka state government for each new registration are one percent of the total value of the property. Hence, for example, if the value of your plot of land is 40,000 INR, the registration fee to be incurred will be 400 INR. 

Unlike the stamp duty and other charges involved, the percentage of the registration fee is fixed and does not vary depending on factors like the total price, location, etc. And the fee is levied on both, commercial as well as residential properties. 

While the property registration charges are not a considerable percentage of the total market value of your property, it is a necessary expense without which the legal validity of your claim over the property can be compromised as well as the construction process. Especially, if the construction over the plot is to be used for commercial use, procuring the correct paperwork is imperative. 

Furthermore, when buying a plot for construction, there are certain things to be kept in mind that can have an impact on the end results.

Plot Stamp Duty In Bangalore

The payment of stamp duty is required by law under Section 3 of the Indian Stamp Act, 1899. The government stamp duty charges depend on the state they are applicable in but typically fall between four to ten percent.  

Certain factors affect how much the stamp duty charge levied in a particular state will be, and the factors also vary from state to state. In some states, like Haryana, the gender of the new property owner is also a factor, whereas, in Karnataka, the same charges are levied for all. While something most states have in common is determining the stamp duty according to the type (multi-story building/plot/individual housing) and purpose (commercial/residential) of the property.

The two key factors that affect the current stamp duty rates in Bangalore, Karnataka, are listed below. However, out of these, the first two are key as they apply to plots of land where no construction has taken place.

Location

The location of the property plays a part in the total additional charges that will be levied on the property. The surcharge, as well as the stamp duty fees, will be lower for urban areas, and slightly higher for rural areas.

Market value

The government stamp duty rate in Bangalore is directly proportional to the property's market value. If the market value is more than 20 Lakhs, the current rate is 5.6 percent, whereas, for properties that cost under 20 lakhs, the rate is much lower, at 2 percent.

Purpose

The purpose of the property, that is, whether the property is intended for commercial or residential use, plays a part in determining the stamp duty and other charges. The stamp duty for commercial properties is comparatively higher than that for properties intended for residential use.

Age of the property

Typically, the older a property is, the lower its price gets, and subsequently, the lower is the stamp duty fees that are levied on it. As compared to newer properties, that due to the better condition and amenities cost more, and subsequently, have higher stamp duty.

Age of the buyer

In most states, senior citizens enjoy a lower government stamp duty than the standard rates that apply to everyone else.  

The calculation of the plot stamp duty in Bangalore can be done based on the following table that lists the current stamp duty rates. Furthermore, you can use the cost calculator here, for calculating your stamp duty and registration charges.

For instance, if the rate of your 1000 sqft plot, located in an urban area is 5000 INR per sqft, the saleable value of the plot will be 1000x5000=50,00,000 INR

This basic cost will incur a registration fee of 1% which will be: 50,00,000x1%= 50,000 INR

And the stamp duty charge on this value will be: 50,00,000x5.6%= 2,80,000 INR

The total additional cost to be paid can add up to be a significant amount, however, the charges are necessary to file the paperwork that will lend legitimacy to your property. A property without the complete paperwork will not be able to be resold for its actual value. 

Furthermore, these charges are paid as a tax towards the government and are one-time charges only. Thus, paying these in full is in your best interest.

How To Pay Stamp Duty Online 

A completely safe and extremely easy way of paying your stamp duty is to follow the detailed steps mentioned below and pay stamp duty online. Paying stamp duty online requires e-stamps which make the whole process contactless and hassle-free. The online procedure also minimizes the need for traveling, which subsequently saves time and money. Although the e-stamping facility is not available in pan India, it is available for the state of Karnataka. 

Step one: Open the official website for e-stamping services from here.

Step two: If you are a new user, click on "e-registration", then choose "secure login", click on "new registration" and fill out the short registration form. Registration is mandatory for using the website and availing of its services. Although, the registration process is quick and simple.

Step three: Make sure that the contact information you enter in the registration form is valid. The validity of the e-mail address and phone number that you enter is crucial for your registration. 

Step four: Create a username and set a password for your account. These credentials will enable you to log into the portal for future use.

Step five: Verify and activate your account through the authentication link sent to your e-mail address. When you click on the link, it will redirect you to the e-stamping website where your registration will now be complete.

Step six: Start filling out the form on the screen. Select your state from the drop-down menu, then select the nearest SHCIL branch, enter other mandatory details for the columns such as first-party name, second-party name, article no., stamp duty paid by, and stamp duty amount. Once you have entered these details, you can generate an online acknowledgment number for future reference to your request.

Step seven: You will have to visit the nearest SHCIL branch to collect physical proof of your payment in the form of a printed hardcopy of the e-stamp certificate. 

Step eight: You need to pay the stamp duty fees at the payment gateway, which you can do through cash, cheque, demand draft, pay order, RTGS, NEFT, and account transfer. 

The Major Differences Between Sale Deed And Sale Agreement

The two main documents involved in the transfer of land are the sale deed and the sale agreement. However, sometimes people use these terms interchangeably, but doing so is highly inaccurate as the two are completely different. Understanding the difference between the two is crucial for a new buyer as failing to do so leaves them vulnerable to fraudulent transactions.

An agreement of sale is, as the name suggests, simply an agreement or an understanding between two parties that shows that both parties are interested in the prospect of a transaction. It is not proof of a transaction, but only an agreement of the terms and conditions for the same. The sale agreement, hence, does not result in the ownership or any legal interests of the prospective buyer in the property.

The agreement of sale is not mandatory in all the states, hence, the failure to produce the same may or may not result in legal ramifications.

The sales deed is a legally binding document that certifies the ownership of a property. It is mandatory to register a sale deed with the respective office under the Registration Act, 1908. The deed comes after the sale agreement as the agreement holds the terms and conditions and the deed is drawn only after both the parties involved have come to a mutual agreement over the terms of the transaction. 

A sale agreement includes the proposal to purchase and agreement to sell in the future with a detailed description of the property and an acknowledgment that there are no legal burdens associated with the property. 

The agreement also includes the declaration of the total value of the property, payment details, method of delivery, the duration the buyer will have to wait for the delivery of the property, and details of a refund in case the titles do not pass the check. Lastly, the agreement acts as a disclaimer to the loss of advance payment in case the buyer is unable to complete the transaction.

The sale deed is typically shorter than the agreement of sale as the agreement already enumerates all the required details, and the deed is simply the contractual proof of the same. The deed includes the details of all the parties involved in the transaction, a description of the property, sale consideration, the declaration of the complete transfer of rights and interests to the new buyer after which the previous owner will hold no right towards any part of the property. 

Furthermore, the deed includes the declaration that will give the new owner complete authority to do with the property as they please, which includes reselling it.

At a glance, the key difference between a sale deed and a sale agreement are listed below.

Sale Agreement

Not mandatory to register in all states

Only implies that a transfer may take place on a Future date

The things stated may or may not be completely followed

Failure to comply may or may not cause legal issues

Sale Deed

Mandatory to register Is the proof of transfer and means immediate

Execution of the transfer The things stated are already agreed upon and executed 

Failure to comply may or may not cause legal issues

The failure to comply will lead to serious legal ramifications

Knowing the difference between a sale agreement and a sale deed will enable you to protect yourself against fraudulent transactions. Should you not possess this knowledge, for instance, you can be tricked into payment based on just the sale agreement, which does not legally entitle you to the property you are paying for, instead of a proper transfer of rights and a legally binding sale deed.

The aforementioned information about stamp duty and registration charges, as well as, the difference between a sale deed and a sale agreement, shall help you while purchasing a property, particularly a plot of land. When looking for a construction company in Bangalore to help you realize your vision, you need not look further than Brick&Bolt. Brick&Bolt is one of the leading construction companies in the area that enables you to control and monitor each step of the project without even having to be physically present at the site.