Decoding Stamp Duty and Registration Charges in Karnataka

Did you know that the Karnataka Stamps and Registration Department generated a record revenue of ₹20,837 crore this year?The increase is primarily due to a rise in stamp duty for properties and non-registrable documents. Last year, the Karnataka Assembly passed the Stamp Duty Amendment Bill, which led to higher stamp duty charges on property transactions.

Want to know the latest stamp duty and registration charges in Karnataka 2024? We have got you covered. Understand how these charges are calculated, how to pay them, and more.

Understanding Stamp Duty and Registration Charges

Stamp duty is a tax levied by the state governments on property ownership. The buyer is responsible for paying stamp duty during property registration. Registration charges refer to the fees paid for registering a property with the relevant authorities. Stamp duty and registration charges are calculated as a percentage of the property's market value.

Factors Affecting Stamp Duty and Registration Charges

• Property type: The rates may differ for residential, commercial, and agricultural properties.
• Property location: Different regions may have varying stamp duty rates.
• Property value: Stamp duty is calculated based on a percentage of the property's market value or consideration amount, whichever is higher.
• Gender and age: Some states offer stamp duty concessions for women and senior citizens.
• Government policies: Stamp duty rates can change based on government regulations and policies.

Stamp Duty Rates in Karnataka Based on Property Values

Under Section 80C of the Income Tax Act 1961, expenses related to stamp duty and registration charges are eligible for tax benefits with a maximum deduction limit of ₹1,50,000. However, deduction on stamp duty and registration charges can only be claimed in the year of actual payment, must be paid by the assessee, and the property must be in the assessee's name. This deduction is only available for new residential properties and does not cover residential plots or commercial and resale properties.

How to Calculate Stamp Duty and Registration Charges in Karnataka?

Stamp duty and registration charges are determined by the state government of Karnataka based on the market value of the property, the type of property, agreement type, and purpose.

Example:

Mr. Kalshetty purchases a residential apartment in Bengaluru with a market value of ₹80 lakhs. The applicable stamp duty rate is 5%.

Stamp Duty Calculation:

Stamp Duty = Market Value * Stamp Duty Rate

= ₹80 lakhs * 5%

= ₹4 lakhs

Registration Charges Calculation:

Registration Charges = Market Value * Registration Charges Rate

= ₹80 lakhs * 1%

= ₹80,000

In this example, Mr. Kalshetty would have to pay ₹4 lakhs as stamp duty and ₹80,000 as registration charges.

Know How to Pay Stamp Duty Charges in Karnataka

• E-stamping: Karnataka provides the convenience of e-stamping for property documents. Visit the Stock Holding Corporation of India Limited (SHCIL) website to access this service. It allows you to calculate stamp duty charges and pay registration fees online, streamlining the process.
• Franking: It is the procedure that verifies that you have paid the stamp duty by having your agreement stamped. Franking demonstrates the legality of your documents. When you go to a bank or franking agency, they use a franking machine to stamp or denomination your agreement documents, proving that your stamp duty has been paid.
• Purchase of Impressed Stamps: Stamp duty can also be paid through purchase of impressed stamps from the Treasury or licenced stamp vendors or purchase of adhesive stamps. Payment can be made to the government through a demand draft issued by any nationalised or scheduled bank. It is important to note that Karnataka has banned the use of stamp papers to curb fake stamp paper practices.

Property Registration Process in Karnataka

The property registration process in Karnataka can be done online through the Kaveri Online Services website. Follow these steps:

Step 1: Visit the Kaveri Online Services website.

Step 2: Use the 'Register as new user' option to create your user ID.

Step 3: Use the 'online EC' option under Services after logging in.

Step 4: Follow the process as directed by the website until you get to the EC.

Step 5: Under the tab of the pre-registration data entry area, choose the 'Document Registration' option.

Step 6: Enter the appropriate data, such as property details, approvals, fee details, etc., one after the other via the different pages.

Step 7: To complete the online process, schedule an appointment.

Step 8: Following the appointment, the buyer and seller, accompanied by witnesses, must go to the registrar's office.

Step 9: Present your identification to the registrar and pay the sale using a demand draft.

Step 10: To finish the registration process, sign the registry paperwork.

Make sure to comply with all necessary steps during property registration in Karnataka for a smooth and legal transfer of ownership.

Benefits of Understanding Karnataka Property Registration Charges

Understanding property registration cost in Karnataka has several benefits for homebuyers:

1. Financial planning: By knowing the costs involved, you can plan your finances better and avoid any last-minute budgetary surprises.
2. Budgeting for additional expenses: Apart from the property's purchase price, you need to account for stamp duty and registration charges in your overall budget.
3. Property valuation: Stamp duty is calculated based on the property's market value, which can give you an idea of its worth.
4. Legal compliance: Paying stamp duty and registration charges ensures that your property transaction is legally valid and recognised by the authorities.