When you invest in a property – be it a flat, an apartment, a villa, second home or even land, it is mandatory that it is registered with the government records. A home buyer has to pay stamp duty and registration charges for registering the property with the government records. Note that this amount is over and above the cost of the property and this is not covered as part of the home loan too. In this guide, we find out if paying this fee using credit card is possible or not. Read on.
What is stamp duty and registration charges in India?
Stamp duty and registration charges are the tax that the home buyer has to pay to get the property legally registered in government records.
Why it is mandatory to pay stamp duty and registration charges in India?
- By paying the stamp duty and registration charges in India, the home buyer is the lawful owner of the property and in case of any property dispute or encroachment issue, he will be able to take legal course of action.
- Also, once the registered documents are with the homebuyer, he can use this for various things like getting a loan, mortgage, etc.
- The registered property can act as proof of identity.
How can you pay the stamp duty and registration charges?
You can pay the stamp duty and registration charges online and offline.
Online stamp duty
- To pay the online stamp duty, you have to go to the state set IGRS online portal.
- Click on e-payment under online services.
- You will be led to the Gras website where you can pay the stamp duty and registration charges.
- Enter all required details and proceed to payment. Here you will see the following options of payment mode:
- Internet banking: This is possible if you have a bank account with a nationalized bank.
- Payment across bank counter: This can be done if you choose to make payment in bank counter through cheque or cash.
- Payment gateway: This can be used if you have an internet banking account in any of the private of cooperative bank given by the payment gateway. You are also given the option of using debit card or credit card.
- UPI Payment where a maximum payment of Rs 1, 00,000 per day can be made.
Offline stamp duty
- You can go the sub-registrar office, register the documents and make payment in the SRO office or across the bank counter.
Stamp duty payment using credit card
There are many states in India which allow the payment of stamp duty online using credit card. On payment of the stamp duty, the homebuyer gets the e-stamp certificate.
Benefits of paying through credit card
- The payment is immediately processed and you get an acknowledgment immediately.
- As the stamp duty is paid on credit, you will get some time to make payment to the bank or the credit card issuer.
- One may get reward points based on the policy that the credit card issuer follows. It is important to know that most credit card companies do not give reward points for using the card for paying for government services.
Disadvantages of paying stamp duty through credit card
- The customer may have to pay convenience charges associated with the credit card.
- The transactional limits may cause problem for the customer during payment.
- Payment options on credit card may differ from state to state. It’s a good idea to check the credit card transactional rules in your particular state.
Stamp duty payment using credit card: Example
A redditor wanted to pay around Rs 12 lakh as stamp duty and was exploring payment through credit card. Finally, he paid the stamp duty using internet banking. This is because, he had to pay 1% of the total amount as processing fee + GST. On calculation it totaled to around Rs 15,000 that was to be paid over and above the stamp duty charges, just because he was using the credit card.
Stamp duty refund: Where will the money be returned?
If you had paid the stamp duty using credit card and then applied for stamp duty refund, do you know where you will get the refunded money? Generally, any refund that is initiative is done to the source and so, you will get the stamp duty refund on the credit card. This is done to minimise confusion and for managing tax related issues. However note only the stamp duty amount may be refunded and not the convenience charge and GST.
What are the precautions to be taken while paying stamp duty through credit card?
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- Enter the correct credit card details including name, credit card number, expiry date and CVV number.
- You will get an OTP on the registered email id and on your registered mobile number whichever option you select.
- Since the amount of stamp duty is large and may not match with your daily card usage, you may get a verification call from the credit card issuing company or bank which will verify the transaction. In case this is left unanswered, the bank may take the decision to reject the transaction.
- To avoid such a situation, it is a good idea to call the credit card vendor and update him about usage of the card.
Housing.com POV
Most government platforms support the use of credit card to make payment for the various services such as stamp duty, registration charges that a home buyer uses. While this option is useful for people who don’t have immediate money to pay the stamp duty, this is an expensive option as it has the convenience charge and GST that one will have to pay.
FAQs
Do credit cards offer reward points for payment of stamp duty using them?
No. Mostly, usage of credit cards on government websites do not give you rewards points unless it is mentioned.
Is GST charged for credit card usage for paying stamp duty?
Yes. Credit card is a service that is being used for payment of stamp duty and hence GST is charged.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |