What Is Agreement Stamp Duty

26 May What Is Agreement Stamp Duty

When it comes to purchasing or selling a property, there are multiple fees and taxes that need to be paid. One of such taxes is the agreement stamp duty, which is a tax levied on the agreement made between the buyer and seller. This tax is applicable to both commercial and residential properties, and it is essential to understand its workings before entering into any property transaction.

The agreement stamp duty is a state subject, which means that the tax rate varies from state to state. In general, it is calculated as a certain percentage of the sale or purchase price of the property. The stamp duty rate can range from as low as 4% to as high as 10% of the property`s value, depending on the state where the property is located.

It is worth noting that the agreement stamp duty is different from the registration fee. While the stamp duty is paid on the agreement made between the buyer and seller, the registration fee is paid to authenticate the agreement with the government. The registration fee is usually a fixed amount and is also levied as a percentage of the property`s value in some states.

The agreement stamp duty is a significant component of property transactions, and non-payment can result in legal issues. It is typically the responsibility of the buyer to pay the stamp duty, although the agreement can specify otherwise. The stamp duty needs to be paid within a specific period after the agreement is made, failing which hefty penalties can be levied.

It is crucial to note that the agreement stamp duty rates are subject to change, and buyers and sellers need to stay updated on any revisions made by the state government.

In conclusion, the agreement stamp duty is a tax levied on property agreements, and it is essential to understand its workings before entering into any property transaction. With the tax rates varying from state to state, buyers and sellers need to stay updated on the applicable rates. Non-payment of the stamp duty can lead to legal issues, so it is essential to fulfill this obligation within the stipulated period.