How does stamp duty vary by state?

Stamp duty is a tax levied by the state government on legal documents related to property transactions, such as sale deeds, gift deeds, lease deeds, and conveyance deeds. As a state subject under the Constitution of India, each state has the autonomy to set its own stamp duty rates, concessions, surcharges, and calculation methods, resulting in variation across the country.

1. Different Rates Across States

• Stamp duty rates on land or property sales typically range between 4% and 8% of the transaction value or the guidance value, whichever is higher.
  
• For example:
  
  • Maharashtra: 5% in urban areas, 6% in Mumbai (including surcharge), with 1% concession for women buyers.
    
  • Karnataka: 5% in urban areas and 3% in rural areas; reduced rates for affordable housing.
    
  • Delhi: 6% for men, 4% for women buyers; calculated on circle rate or transaction value.
    
  • Tamil Nadu: 7% flat rate plus 1% registration fee.
    

Each state government revises these rates periodically based on revenue goals and real estate trends.

2. Gender-Based Concessions

• Many states offer reduced stamp duty rates for women buyers to promote property ownership among women.
  
• The concession usually ranges between 1% and 2%.
  
• For instance:
  
  • In Punjab, stamp duty is 6% for men and 4% for women.
    
  • In Uttar Pradesh, women get a 1% concession subject to a maximum limit on property value.
    

However, these benefits are only applicable when the property is registered solely or jointly in a woman’s name.

3. Urban vs. Rural Rate Differences

• Stamp duty is often lower in rural areas compared to municipal or urban zones.
  
• This differentiation accounts for the market value of land and availability of civic infrastructure.
  
• For example:
  
  • Haryana charges higher rates in Gurgaon than in smaller districts.
    
  • Andhra Pradesh and Telangana classify zones for rate calculation based on municipal grading.
    

4. Transaction Type-Based Variation

• Different rates apply depending on the nature of transaction:
  
  • Sale: Standard duty rate (e.g., 5%–7%)
    
  • Gift: Lower rates or exemptions for blood relatives
    
  • Lease: Based on lease duration and total rent
    
  • Exchange or Partition: May attract concessional duty in family transactions
    
• For example, in West Bengal, gift deeds to relatives are taxed at a concessional rate of 0.5%.
  

5. Guidance/Circle Rate Influence

• Stamp duty is calculated on the higher of the declared transaction value or the government-notified guidance value (circle rate).
  
• These guidance values differ:
  
  • By locality, road width, and property type
    
  • By built-up area or open land category
    
• States publish these values via municipal corporations, sub-registrar offices, or online portals.

6. Surcharges and Cess Additions

• In addition to base stamp duty, several states impose:
  
  • Surcharge (e.g., 1% for municipal infrastructure)
    
  • Cess (e.g., 0.5% for development)
    
• These levies raise the effective transaction cost, especially in metro cities.

7. Special Provisions and Exemptions

• States may introduce temporary reductions or exemptions:
  
  • To boost property registrations
    
  • As part of budget incentives
    
  • For first-time homebuyers or economically weaker sections
    
• Example: Maharashtra temporarily reduced stamp duty from 5% to 2% during the pandemic to revive real estate activity.
  

8. Online Payment and Calculation Portals

• Most states now offer online calculators and e-stamping portals, such as:
  
  • IGR Maharashtra
    
  • Kaveri Online (Karnataka)
    
  • IGRS Telangana
    
  • SHCIL (Stock Holding Corporation of India Ltd.)
    

These portals help users compute accurate stamp duty based on area, property value, gender, and usage type.