Written by Prerita Aggarwal & Souvik Chatterjee
Buying a house is an experience for a lifetime binding with emotions. Thus it is very important to have financial and legal literacy and discipline to make any decision with respect to buying a property. It is essential to have legal evidence of the possession of the property, mere physical possession of the property does not make one an owner of the property. Transfer of ownership is not a simple process. A property buyer has to pay some charge in form of stamp duty and registration. Here, we will now discuss on how to process stamps duty and registration at the time of property purchase.
Stamp duty is a legal tax payable in full and acts as a proof for any sale or purchase of a property. The levy of stamp duty falls under state subject and thus the stamp duty rates vary from state to state. The stamp duty is levied by the centre on specified instruments and also fixes the rates for these instruments. Upon payment of the stamp duty, the documents become legally valid and then can be produced before the Court of Law.
Stamp duty needs to be paid on all types of instruments including an agreement to sell, conveyance deed, gift deed except on will. It is very important to know that stamp duty can be paid by either of the following ways i.e. Stamp Paper, E- Stamp or Franking.
While buying a house, we need to identify the property, make down payment, apply for home loan, sign the sale agreement, etc. One of the important step & the final step while buying a house is the possession and registration of your property. After the possession of the property is being transferred to you, it is your responsibility to get it registered in your name.
As soon as the stamp duty is paid, the document must be registered according to the Indian Registration Act, 1908, with the Sub-Registrar of the concerned Locality. The primary object of the act is to ensure that the information on all the deals is correct and Legitimate Property/ Land records are maintained. The purpose of registration is to get the transaction validated and for transfer of ownership.
The registration process involves making a stamp duty and paying the registration fee for the Title Document and has the said title document legally recorded with the Sub-registrar. It is very important to verify the title of the property, the value of the Property.
As stated earlier, it is crucial to register the property and pay its stamp duty as it gives the Legal ownership of the property and helps in elimination of any ownership dispute.