To be considered the valid owner of a property, your registration papers must be proper and for that, you need to pay stamp duty and registration charges. This applies irrespective of whether you are buying a plot of land or independent house, residential apartment, or a commercial property; Stamp duty and registration charges have to be paid. India’s largest and most valuable real estate market of Mumbai levies stamp duty under the Maharashtra Stamp Duty Act and is one of the major sources of revenue for the state. The quantum of stamp duty is determined based on the location of the property, which is considered a proxy for the valuation of the property.
Stamp duty and registration charges are 2 different things
Quite often people tend to get confused with these two items. However, stamp duty and registration charges are entirely different and also levied separately. Today, thanks to e-governance initiatives of various states and the central government, payment of stamp duty on property as well as the registration fee can be done online. In Maharashtra, the state operates the Government Receipt Accounting System (GRAS) where such payments like stamp duty and registration charges can be made online.
Remember, that these charges are levied individually by states. What’s being stated here is only applicable to the state of Maharashtra (with focus on Mumbai), you will have to check for properties in other states.
Let us now look at the actual stamp duty and registration charges. Stamp duty in the rest of Maharashtra is 5%, while in Mumbai, the stamp duty on property is 6%. This additional 1% is levied by the state government to fund various infrastructure projects in the state, which entail huge outlays. Registration charges are fixed at 1%. From time to time, the state government either waives or gives concessions on some of these charges to encourage people to invest in property.
Rates of stamp duty in Mumbai region
The stamp duty on property in Mumbai and adjacent agglomerations as well as registration charges are encapsulated in the table below.
| Area of the Property |
Stamp Duty in Mumbai |
Registration Charges in Mumbai |
| Within Municipal Limits |
6% of the market value |
1% of the market value for properties priced below Rs. 30lakh
Rs. 30,000 for properties priced above Rs. 30lakh
|
| Within limits of Municipal Council / Panchayat / Cantonment of any area within MMRDA |
4% of the market value |
1% of the market value for properties priced below Rs. 30lakh
Rs. 30,000 for properties priced above Rs. 30lakh
|
| Within Gram Panchayat Limits |
3% of the market value |
1% of the market value for properties priced below Rs. 30lakh
Rs. 30,000 for properties priced above Rs. 30lakh
|
Data Source: http://igrmaharashtra.gov.in/
1% of the total cost for the properties priced below Rs 30 lakh and capped at Rs 30,000 for properties priced above Rs 30 lakh.
What influences stamp duty and registration charges in Mumbai?
Stamp duty registration is a charge levied by the state governments and in India, property registration continues to be a state subject. Payment of stamp duty and registration charges are necessary for the valid title to free-hold or leasehold property. This also applies to agricultural land, non-agricultural land, independent homes, apartments (flats) and commercial property. There are 3 factors that determine the charges on the property, which are encapsulated as under.
- A key factor is the market value of the property and the area where the property is located. Normally, the area is used as a proxy for property value and properties in upscale locations attract higher stamp duty in Mumbai.
- The eventual use of the property is also a key factor. Stamp duty charges will be higher on commercial property than on residential property, since the government wants to encourage people to own homes.
- Finally, the administrative jurisdiction is also a key factor. Properties in municipal localities and urban areas are subjected to a higher stamp duty compared to properties in urban agglomerations or under Gram Panchayats administration.
Apart from all these factors, the state government offers incentives such as waivers and concessions from time to time to encourage activity around certain periods.
Payment of stamp duty charges in Mumbai
Thanks to e-Governance initiatives of the central and state governments, most states have digitized such government-public interactions. In Mumbai, the payment of stamp duty and registration fee to the Department of Registration and Stamps can be done through the Government Receipt Accounting System - 2 (GRAS) of the Government of Maharashtra. The registration process is simple. Users have to provide their Income Tax PAN as well as the PAN of the second party and all details of the property on the GRAS portal. Electronic payment can be made via NEFT, RTGS, IMPS, debit cards, payment gateways etc. You can also pay without registering with the website. In the GRAS portal, users have the choice of paying either only stamp duty or only registration charges or both. You can select the option appropriately and make the payment. The entire process flow is simple and menu driven.