Stamp Duty in Pune - Tax Levied on Real Estate Property

Purchasing a real estate property is an essential financial decision that a person makes during his lifetime. Deciding on what property to buy according to the needs and necessities of the person is an important criterion to consider. Getting a dream house and a place you can call home is what you desire, and it leads to a long list of agreements and documents and legal action needed accordingly.

Going into the process of purchasing through an agent or acquiring a third-party loan, getting agreements like buyers' and sellers' agreements and getting possession of the property is a long way. After obtaining possession of the property, the owner is supposed to get the house registration done. The owner may need to pay a certain amount called stamp duty. It is a property cost that is added to the total cost by the government.

Let's understand what stamp duty is, why it is necessary to pay it, and several other features of the stamp duty in Pune.

What is stamp duty?

Stamp duty, also known as stamp tax, is levied by the government on selling or purchasing real estate property, and it is payable under Section 3 of the Indian Stamp Act, 1899. It is a type of tax, similar to income tax which the government imposes on documents required:

• To record certain kinds of transactions legally and
• On paperwork used to legally register weddings, military commissions, copyrights, patents, and other similar events.

A stamp duty-paid instrument or document is seen as lawful and legal, has evidential value, and can be used in court evidence. The court will not accept any document as evidence that is not correctly stamped.

In the past, governments have employed stamp duties to generate revenue for their operations. Early in the 17th century, Spain is where stamp taxes are said to have started. They were known as "stamp" duties because an actual stamp was applied to the document as evidence showing that it had been registered duly and the tax due had been satisfied.

Stamp duty charges in Pune

Pune property sales include stamp duty and registration fees as an essential component. The Maharashtra state government determines the stamp duty rates in Pune. The payment of stamp duty ensures the proper registration of the real estate transaction in the government's records.

The Maharashtra government declared that in the four cities of Mumbai, Nagpur, Thane, and Pune, they would impose a Metro Cess of 1 per cent in addition to the applicable stamp duty in Pune. The stamp duty rates and registration fees in Pune as of April 2022 are as follows:

• For the male category, the stamp duty charges are 7 per cent (stamp duty 5%+ metro cess 1 %+ local body tax 1%)
• For the female category, the stamp duty charges are 6 per cent (stamp duty 4%+ metro cess 1 %+ local body tax 1%)
• For the joint category comprising males and females, 6.5 per cent.

In contrast to other states where women pay less in stamp duty, Maharashtra had equal rates for men and women before the state announced a one percentage point reduction for the female category.

Factors affecting stamp duty charges in Pune

The Maharashtra state government imposes registration and stamp duty fees in Pune for all freehold and leasehold land, including agricultural land. These fees also apply to residential and commercial assets, including houses and apartments. Due to the various types of properties, the actual amount of the stamp duty and registration fees in Pune relies on several other variables, including:

• Property type
• Property location
• Market value
• Age and gender of the owner

Modes of payment of stamp duty

There are currently four modes of payment accepted by the governing authority in Pune, and the person paying must choose amongst them for making the payment. Let us see what the modes of payment are and how they work.

On non-judicial stamp paper

In a non-judicial stamp paper, the buyer has to get physical stamp paper from a licensed vendor and get the executed instrument printed on the stamp paper. It became the least used option during the pandemic despite being a feasible option.

Franking a document

For this payment method, the applicant must apply with a bank or an authorised franking agency to pay the stamp duty. The highest stamp duty, however, is Rs. 5000 per document.

Electronic secured bank treasury receipt (e-SBTR)

The government established an online payment mechanism called Electronic Secured Bank Treasury Receipt to make paying stamp duty in Pune simpler for the buyer (e-SBTR). To use the e-SBTR function, the applicant must fill out an "input form" and pay the necessary stamp duty fees at the bank branch office. Once the payment gets done successfully, the authorities enter the information in the government visual treasury to produce a pre-printed e-SBTR that serves as proof of payment. However, it is necessary to remember that the applicant must personally pick up the e-SBTR from the relevant bank branch office.

Government receipt accounting system (GRAS)

When the applicant wishes to complete the process online, the government provides an electronic payment system called GRAS that enables the buyer to pay stamp duty in Pune through an e-challan recognised at the sub-offices of the Registrar. The most popular method of payment for purchasers who have taken out a house loan on the property is GRAS.

Steps of making Online Payment

Nowadays, everything is done online, from shopping to paying electricity bills to getting a licence, all these things are done through a website. So payment of stamp duty and registration of houses is also made online. Here is the procedure needed to follow while making an online payment of stamp duty in Pune.

• Visit the Maharashtra online stamp duty payment portal.
• Click on "pay without registering" and "select citizen" if you wish to make the payment without registering, the page will then direct you to a different page for the transaction.
• Another option, "Pay to register the document", will be available on the page, where you can decide whether to pay just the stamp duty, the registration fees, or both.
• The final next two steps are to generate the challan and choose the preferred payment method.

How to calculate stamp duty in Pune?

The Inspector General of Registration and Controller of Stamp (IGR), Maharashtra, offers a tool for calculating stamp duty fees online. Using the website's Stamp Duty Calculator function, one can determine the exact stamp duty that applies to a specific document.

Pune's stamp duty is based on the total consideration or sale value specified in the sale agreement. This rate fluctuates depending on the region type, the type of document, and other things.

Calculation-

• Visit the website of IGR Maharashtra.
• On the homepage, click on the stamp duty calculator option.
• After clicking the button, the stamp duty collector page will open.
• You will need to select the appropriate document from a list that includes sale deeds, purchase agreements, gifts, leave agreements, licences, etc. Select the suitable option.
• Select the appropriate cantonment, Municipal Corporation, Municipal Council, or Gram Panchayat.
• Then you must select the appropriate Municipal Corporation from the list of alternatives if you select the Municipal Corporation option.
• Following your decision, you will need to enter the Market value and Consideration amount.
• Press the calculate key. The computer screen will show the appropriate Pune stamp duty.

Stamp duty in Pune applies on many papers, including mortgage deeds, gift deeds, leave and licence agreements, transfer deeds, and agreements relating to the sale of real estate, etc.

Tax benefits available on stamp duty

Stamp duty and registration fees may get deducted from taxes under Section 80C of the Income Tax Act of 1961. Up to 1,50,000 might get deducted for these costs according to the provision. Further, the only groups eligible for tax benefits are individuals and Hindu Undivided families.

A person claims a tax deduction when he owns the land/property/plot and can claim it within a year when all expenses are paid.

Owners who own a property jointly may be able to deduct it from their taxes. Commercial property, residential plots, and real estate used for resale are not eligible for tax deductions.

Stamp duty refund in Pune

If the seller of the property cannot fulfil his promise for the required property and the real estate is not available for purchase, then the seller must cancel the agreement by law. The cancellation agreement must be registered, and the governing authority shall approve it. The buyer is eligible for a maximum 98% stamp duty refund.

The Registration Department of Maharashtra allows users to file for a stamp duty refund online. Following is the method to apply for a refund of the stamp duty in Pune-

• Visit the IGR Maharashtra website.
• On the homepage, you'll find the "stamp duty refund" tab; click on it.
• After clicking on it, it will direct you to a different webpage.
• Enter the details mentioned on the webpage, like refund token number and password
• The details will appear on the screen as soon as you click the "refund status button".

Conclusion

Payment of stamp duty is an essential part of a property deal. If the real estate is not registered and no stamp duty is paid, the house/ property will not be in governmental records making it an even bigger issue. Knowing the basic information about stamp duty and registration is essential so that no one can fool you.

To avoid last-minute hiccups, you should review the rates of the stamp duty in Pune and their computations whether you are a property buyer or an estate developer in Pune. In Pune, failure to pay the required stamp duty fees could result in a legal conflict over the property. The government's first duty is to protect the people, which is why the government has made many portals to help gather information about the above stated.

Stamp duty fees are also a weapon for reducing or increasing the demand for real estate. The relevant state governments lower the stamp duty and registration fees whenever the market is weak to boost housing demand.