An Extensive Guide to Stamp Duty in Bangalore

Do you need clarification on Bangalore's stamp duty? Bangalore, known as India's Silicon Valley, is a popular housing destination because of its IT majors and multinational corporations. However, an additional 0.6% stamp duty on unsold properties has increased the cost of purchasing a home in the city.

Our comprehensive guide will teach you everything you need to learn about stamp duty in Bangalore. This resource provides detailed information on stamp duty in Bangalore, including factors affecting it, required documents, cost-cutting strategies, and penalties for nonpayment. It provides a complete understanding of the city's stamp duty.

How is Stamp Duty Assessed in Bangalore?

Stamp duty on properties in Bangalore varies according to market value, ranging from 3% to 5%. For instance, properties under Rs. 20 lakh are subject to a 2% stamp duty, while those between Rs. 21 lakh and Rs. 35 lakh face a 3% stamp duty rate. A stamp duty of 5% is charged on properties worth more than Rs. 45 lakh.

In addition to stamp duty, there is a cess and surcharge for property registration fees. For urban properties worth more than Rs. 35 lakh, a 10% cess and 2% surcharge result in an effective stamp duty of 5.6%. In rural areas, the stamp duty for home buyers is 5.65%, with a 3% surcharge.

Factors Affecting Stamp Duty Rates in Bangalore

Stamp duty rates are affected by various factors, which are listed below:

Age of the Property

The age of a property significantly impacts stamp duty. Stamp duty charges are calculated based on the total value of a property, with older homes costing less than newer ones, resulting in lower stamp duty fees.

Age of Owner

Stamp duty fees are based on a property owner's age, with senior individuals typically paying less than younger individuals. Senior citizens make excellent candidates for home purchases because their age affects their ability to pay stamp duty fees.

Objective

The property type determines the stamp duty amount. Commercial buildings require more amenities and services, resulting in higher stamp duty fees than residential properties.

Location

The stamp duty in Bangalore varies according to the property's location, with rural areas having lower stamp duty rates. Stamp duties vary among municipal bodies such as the BBMP, City Corporation, Municipal Corporation, Gramme Panchayat, and Town Municipal Council.

Amenities

Buildings with more amenities, such as libraries, swimming pools, gyms, and sports areas, have higher stamp duty fees, whereas buildings with fewer amenities have lower fees.

Documents Needed for Payment of Stamp Duty in Bangalore

Payment of stamp duty fees for property requires the submission of specific legal documents, which are listed below:

• Sale Deed or Agreement
• Identity Proof
• Address Proof
• PAN card
• Passport-size photograph
• Property Documents
• Encumbrance Certificate
• No Objection Certificate
• Payment Receipts
• Power of Attorney

How to Pay Stamp Duty in Bangalore?

In Bangalore, you can pay stamp duty both online and offline.

Online Method:

Bangalore stamp duty charges can only be paid online for up to Rs. 2,000, and homeowners can follow the steps outlined below:

• Step 1: Go to the Karnataka State Government's Khajane-II portal.
• Step 2: To generate a Challan, scroll down and select the 'Generate Challan' option, which will redirect you to a different page.
• Step 3: Users must enter the department, registration type, and sub-registrar office information in the DDO office section before selecting the sale agreement in the sub-purpose and stamp duty in the purpose options.
• Step 4: Fill out the required information, including the stamp duty figure and payment method, then click submit, enter the CAPTCHA code, and pay using your preferred method.

Offline Method:

Those who prefer the traditional method can pay stamp duty charges offline.

• Step 1: Locate your local Sub-Registrar's Office (SRO).
• Step 2: Purchase a non-judicial stamp from a court or a licenced vendor at the stamp duty amount.
• Step 3: Before visiting the SRO, all parties involved in the transaction, including the buyer and seller, must sign all required documents and have a witness present.
• Step 4: The sub-registrar will verify the submitted document and request payment for registration fees, ensuring the registration certificate is collected from the SRO after payment.

4 Ways to Save on Stamp Duty Charges

1. Projects With Fewer Amenities

Stamp duty charges are typically lower for housing projects without premium amenities. Investing in projects with fewer amenities is preferable, as Bangalore charges higher prices for housing societies with a wide range of amenities.

2. Less Developed Areas

Stamp duty costs are higher in urban areas than in rural areas like Doddaballapur, Devanahalli, and Nelamangala. Buying primarily for residential purposes outside of municipal limits is ideal to save on stamp duty costs, as urban property buyers pay higher stamp duty rates.

3. Invest in a Project that Offers Stamp Duty Exemptions

Developers frequently offer waivers to entice buyers and increase sales, but it is essential to consider all aspects of the transaction. The exemption from stamp duty charges indicates that buyers in this category can save stamp duty significantly.

4. Exemption for First-Time Buyers

First-time home buyers in Bangalore can get a stamp duty exemption on home loan interest accompanied by tax benefit on stamp duty and registration charges.

Penalties for Not Paying Stamp Duty in Bangalore

The Karnataka Stamp Act empowers authorities to impose stamp duty regulations. If you fail to pay the stamp duty, you must pay the outstanding amount along with a penalty of 2% of the outstanding amount per month. The penalty could be as high as 200% of the original liability.

Conclusion

How is stamp duty assessed in Bangalore?

Stamp duty on properties in Bangalore is calculated based on market value and ranges between 3% and 5%. For properties under Rs. 20 lakh, the stamp duty is 2%, while for those over Rs. 35 lakh, subjected to pay 3%. Property registration fees also apply, with urban properties charging a 5.6% rate.

Factors affecting stamp duty rates in Bangalore

• Age of the property
• Age of owner
• Gender of owner
• Objective
• Location
• Amenities

Documents needed for payment of stamp duty in Bangalore

• Sale Deed or Agreement
• Identity Proof
• Address Proof
• PAN card
• Passport-size photograph
• Property Documents
• Encumbrance Certificate
• No Objection Certificate
• Payment Receipts
• Power of Attorney

How to pay stamp duty in Bangalore?

Bangalore stamp duty charges can be paid online, while those preferring the traditional method can pay offline.

4 Ways to save on stamp duty charges

• Projects with fewer amenities
• Less developed areas
• Invest in a project that offers stamp duty exemptions
• Exemption for first-time buyers

Penalties for not paying stamp duty in Bangalore

The Karnataka Stamp Act allows authorities to impose a penalty of 2% along with the outstanding stamp duty.