Mastering Stamp Duty: Innovative Home Loan Approaches for Financial Success

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NAVIGATING THE COMPLEXITIES OF HOME LOAN
STRATEGIES IN THE FACE OF STAMP DUTY MITIGATING
FINANCIAL BURDENS
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INTRODUCTION
Buying a home as a ?rst-time homebuyer can be a
challenging experience. Finding the right Home
Loan provider is crucial, as you need someone
who can offer you favourable terms and
conditions, as well as affordable interest rates
for the loan. However, it is important to
remember that obtaining a Home Loan comes with
several additional fees and costs, such as
processing charges, legal fees, house inspection
or maintenance fees, and Stamp Duty charges.
Here, we will discuss the meaning of Stamp Duty
on Home Loans and its impact.
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Meaning Of Stamp Duty On Home Loans?
Stamp Duty on Home Loans is a direct tax levied
under Section 3 of the Indian Stamp Act of 1899.
Homebuyers are required to pay stamp duty, which
is a way to legalise their sales deed, letters of
credit, promissory notes, deed of conveyance,
property transactions, and other property
documents. Stamp duty charges are in addition to
the housing loan interest rate and processing
charges, and there are different ways in which
stamp duty can be paid. Delays in paying stamp
duty can lead to a penalty of 2 per month to
200 and may even result in imprisonment.
Changes in stamp duty rates can have a
signi?cant impact on your Home Loan. For
instance, the government of Maharashtra reduced
the stamp duty rate from 5 to 2 until December
2020, which had a positive effect on the purchase
and sale of the property.
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How Is Stamp Duty Calculated?

• The stamp duty is calculated on the valuation of
  the property that is being
• purchased. It considers various aspects, such as
  1- The market price of the property
• 2- The age and structure of the property 3- The
  location of the property
• 4- The type of property, whether it's a home or
  of?ce use property 5- Whether it's in the urban
  or rural area
• The number of ?oors
• The gender of the homebuyer (it's less for women)
  8- Whether it's a freehold or a lease property
• The amenities that are held by the property
• Type of land, whether it's agricultural or
  non-agricultural land.

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How Is Stamp Duty Calculated?

• The stamp duty is calculated on the valuation of
  the property that is being purchased. It
  considers various aspects, such as
• The market price of the property
• The age and structure of the property 3- The
  location of the property
• 4- The type of property, whether it's a home or
  of?ce use property 5- Whether it's in the urban
  or rural area
• The number of ?oors
• The gender of the homebuyer (it's less for women)
  8- Whether it's a freehold or a lease property
• The amenities that are held by the property
• Type of land, whether it's agricultural or
  non-agricultural land.

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What Are The Documents That You Need To Pay Stamp
Duty For?

• While paying your stamp duty, you must carry
  necessary documents like 1- The property sales
  deed and agreement.
• Your ID, address, and age proof along with
  landowners' title documents, latest bank account
  statements, last 3 months' tax receipts, Khata
  certi?cate, and BBMP extract certi?cate.
• Information of power of attorneys.
• Joint development agreement between the builder
  and landowner and the registered agreement.
• You would also need to submit documents based on
  all previously signed agreements, 7/12 extract
  or RTC, conversion order, certi?cate of
  encumbrance, electricity bill, approved building
  plan, Possession/occupancy certi?cate of the
  landowner, NOC from Apartment Association,
  society registration certi?cate's photocopy.

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WHAT TO DO AFTER PAYING THE STAMP DUTY?
After you pay the stamp duty, you must register
your Home Loan or property documents. This
should be initiated considering the protocols
under the Indian Registration Act, which the
sub-registrar should process. The registration of
the documents is required to maintain proof of
all documents executed under the real estate
purchase. Only after the registration process
will you legally become the property owner. The
registration fee varies from state to state and
is normally 1 of the property's market value or
total cost.
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Conclusion

• It is mandatory to pay the stamp duty on property
  purchase, without which the legal possession of
  your house shall be incomplete. Do your homework
  thoroughly and research the applicable stamp
  duty charges in your area before you ?nalise
  your Home Loan. These charges are over and above
  the Home Loan charges and expenses and housing
  loan interest rate, so you must keep them in
  mind. You also get the leverage of tax bene?ts
  under section 80C when you pay stamp duty, so it
  is not only mandatory but also bene?cial to pay
  these extra charges to procure ownership of the
  newly purchased property.

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THANKS
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