The Maharashtra government has announced a massive reduction in stamp duty rates by up to 3%, which ended on March 31, 2021, as well as concessions for women buyers. We look at the stamp duty rates in Mumbai and the important cities in Maharashtra and how to pay the same online
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.
After announcing a massive stamp duty rate cut in August 2020, the state government has decided not to extend the stamp duty waiver on property registrations beyond March 31, 2021 and also kept the Ready Reckoner Rates unchanged for the financial year 2021-22. According to the announcement made by the state government in August 2020, the stamp duty payable on property transactions was 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.
Earlier, The Maharashtra government, in its budget for 2021-22, announced a concession of 1% over the prevailing stamp duty rate on property transactions, if the transfer of house property or registration of sale deed, is done in the name of women. The announcement was made by deputy chief minister Ajit Pawar, on March 8, 2021.
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).
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.
To boost sales, the National Real Estate Development Council (NAREDCO), Maharashtra, also announced that they would absorb the 3% stamp duty on property purchase and offer a waiver to home buyers, till December 31, 2020. Earlier, the scheme was available till Diwali of 2020, but encouraged by the jump in sales, the builder association has extended the scheme till the year-end.
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.