A stamp duty is a tax imposed by state governments on the purchase, sale, or transfer of property. It is calculated based on either the market value or the transaction value of the property, whichever is higher.
Purchasing a house, shop, flat, or piece of land often comes with a heavy financial burden – not just for the property itself but also for the taxes involved. One of the biggest expenses is stamp duty, which can run into lakhs of rupees. But here’s the good news: there are legal ways to reduce this cost.
A stamp duty is a tax imposed by state governments on the purchase, sale, or transfer of property. It is calculated based on either the market value or the transaction value of the property, whichever is higher. So, is there a way to legally save on this tax? The answer is a loud and clear yes! Let’s look at four legal strategies to reduce your stamp duty.
Add your wife (or another woman) as a joint owner
One of the easiest ways to save on stamp duty is by adding a female co-owner—like your wife, mother, or sister—to the property because many states in India offer concessional stamp duty rates for women buyers. For instance, in Delhi, women pay just 4% in stamp duty compared to 6% for men. States like Maharashtra and Haryana also offer similar benefits. So, by simply making your wife or another female relative a co-owner, you could save a substantial amount of money.
Ensure proper valuation of the property
Sometimes, the actual market value of a property is lower than the price being paid. However, stamp duty is usually calculated on the higher of the market value or the transaction value. Here’s where you can act smart. Compare the government guideline value (circle rate) with the real market rate. If you believe the market value is actually lower than the circle rate, you can apply to the registrar or collector’s office for a fair valuation. If your claim is accepted and backed by proof, you can end up paying a lower stamp duty.
Claim tax benefits under Section 80C
Under Section 80C of the Income Tax Act, individuals and Hindu Undivided Families (HUFs) can claim a deduction of up to Rs 1.5 lakh on expenses related to the purchase of residential property. This includes both stamp duty and registration charges. However, this benefit is applicable only in the financial year when the payment is actually made. Also, remember that this deduction is only valid for new residential properties—not commercial or resale ones.
Buy affordable housing to get stamp duty waivers
One must also consider investing in affordable housing in order to save big. Many state governments offer generous stamp duty concessions for budget-friendly properties, especially for first-time buyers. For example, under Delhi’s affordable housing schemes, stamp duty is fully waived for first-time homebuyers purchasing flats worth up to Rs 45 lakh. Similarly, in Maharashtra, homes priced under Rs 35 lakh in the Mumbai Metropolitan Region and under Rs 30 lakh in other areas of the state enjoy full exemption from stamp duty.
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