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Whenever any movable or immovable asset changes hands, the buyer has to pay a certain amount of tax to the state government, to get it stamped, which is known as stamp duty. The Maharashtra Stamp Act specifies such assets and instruments on which the stamp duty has to be paid to the state government. The Act also details the amount of duty to be paid to the government.
Now, in order to encourage home buyers to invest in the real estate, the Maharashtra government has announced a cut in the stamp duty for a limited period of time. According to the announcement made by the state government, the stamp duty payable on property transactions has been reduced in two slabs – by 3% from September 1, 2020 to December 31, 2020 and by 2% from January 1, 2021 to March 31, 2021. The decision was taken at a cabinet meeting held on August 26, 2020.
What is Maharashtra Stamp Act?
The Maharashtra Stamp Act was passed in 1958 and applies to all the instruments mentioned in Schedule 1, on which the stamp duty is payable to the state. The Act was amended recently and the amendments include a revision of stamp duty on gift deeds, inclusion of e-payment of stamp duty, revision of penalty clauses and increment of stamp duty under certain instrument clauses.
Stamp duty charges in Maharashtra
Stamp duty rates on property depend upon several criteria across Maharashtra state. This includes whether the property is located in urban or rural areas, total cost of the transaction, etc. Earlier in April 2020, the Maharashtra government has reduced stamp duty on properties for the next two years, in the areas falling under the Mumbai Metropolitan Region Development Authority (MMRDA) and municipal corporations of Pune, Pimpri-Chinchwad and Nagpur. This means that stamp duty on properties in Mumbai, Pune and Nagpur, was charged at 5% (4% stamp duty + 1% metro cess).
|Cities||Stamp duty rates applicable (w.e.f. April 1, 2020)||Stamp duty rates applicable from September 1, 2020 till December 31, 2020||Stamp duty rates applicable from January 1, 2021 till March 31, 2021|
|Mumbai||5% (includes 1% metro cess)||2%||3%|
|Pune||6% (includes local body tax and transport surcharge)||3%||4%|
|Thane||6% (includes local body tax and transport surcharge)||3%||4%|
|Navi Mumbai||6% (includes local body tax and transport surcharge)||3%||4%|
|Pimpri-Chinchwad||6% (includes local body tax and transport surcharge)||3%||4%|
|Nagpur||6% (includes local body tax and transport surcharge)||3%||4%|
The registration charges in the state are 1% of the total cost, for the properties priced below Rs 30 lakhs and capped at Rs 30,000 for properties priced above Rs 30 lakhs.
Also, according to Article 34 of the Maharashtra Stamp Act, which was amended in 2017, stamp duty on gift deeds is 3% of the property’s value. However, if the property in consideration is a residential or agricultural property and is gifted (without any payment) to family members, then, the stamp duty is Rs 200.
How is stamp duty calculated?
Stamp duty is calculated on the basis of ready reckoner rates and the property value mentioned in the buyer-seller agreement. In Maharashtra, the stamp duty on property varies as per the location. For instance, stamp duty for a property located in the municipal limit of urban areas in Mumbai will be 5% of the market value, while a property located within the limits of any gram panchayat will attract stamp duty of 3% of the market value.
Stamp duty in Mumbai
Stamp duty in Mumbai varies across the region, depending upon the property location and type of deed.
Below is the stamp duty applicable on conveyance/sale deed after March 2021:
|Areas in Mumbai||Stamp duty in Mumbai|
|Within the municipal limits of any urban area||5% of the market value|
|Within the limits of any municipal council/ panchayat/ cantonment of any area within MMRDA||4% of the market value|
|Within the limits of any gram panchayat||3% of the market value|
Payment of stamp duty
According to the Maharashtra Stamp Act, all instruments chargeable with duty and executed in Maharashtra, should be stamped before or at the time of execution, or on the next working day following the date of execution. However, if the deed is executed out of the territory, it can be stamped within three months after it is first received in India.
The stamp papers must be in the name of one of the parties to the transaction and not in the name of the chartered accountant or lawyer of the parties. Moreover, the date of issue of the stamp paper must not be more than six months older than the date of the transaction.
Stamp duty charges can be paid by way of adhesive or impressed stamps on the deed. In addition to this, the adhesive stamps used on the deed is cancelled at the time of execution, so that it is not available for reuse.
Online payment of stamp duty
The Maharashtra Stamp Act has been amended to accept online payment, for stamp duty payable on instruments executed in the state. Follow these steps, to pay your stamp duty online:
Step 1: Visit the Maharashtra Stamp Duty online payment portal.
Step 2: Click ‘Pay Without Registration’ if you are not registered with the portal. If you are a registered user, fill in the login details.
Step 3: If you have selected the ‘Pay Without Registration’ option, you will be redirected to another page, where you have to choose ‘Citizen’ and select the type of transaction you want to do.
Step 4: Choose ‘Make Payment to Register your Document’. Now, you can opt for paying the stamp duty and registration charges together, or stamp duty only, or registration charges only.
Step 5: Fill in the details as required such as district, sub-registrar’s office, payment details, party details, property details and property value details.
Step 6: Choose the payment option and once done, generate the challan, which has to be presented at the time of execution of the deed.
If you are stuck at any step or you want to generate your challan again, you can drop a mail to email@example.com
Stamp duty on past property documents
While the Maharashtra Stamp Act empowers the collector of a district, to call for documents within a period of 10 years from the registration date of such documents, to verify if the appropriate duty has been paid on the deed, the Bombay High Court has held that stamp duty cannot be collected for inadequately stamped past documents, at the time of its subsequent sale. Moreover, if the historical documents are liable to be stamped, the stamp duty shall be recovered only at the market rate prevalent when the transaction took place. That means, stamp duty charges cannot be applied on a retrospective basis.
How is stamp duty and registration calculated on property?
They are calculated on the basis of market value or ready reckoner rates.
What is rate of stamp duty on property in Maharashtra?
It varies across the state, according to the locality and city.