QA- Who pays stamp duty and registration charges when buying or selling property in India?

Q. Who pays stamp duty and registration charges when buying or selling property in India?

A. The buyer pays stamp duty and registration charges when buying a property.

The seller is supposed to pay the capital gains tax (if any).

As per the constitution of India, Stamp duty is a type of tax accumulation by central or state government.

Stamp duty shall be paid on the market value of the property. However, to minimize stamp duty charges, the buyer agrees to report the circle rate of the property during the property registration process. The premium above the circle rate is paid in cash to the seller.

Registration is the process of submission of property transaction documents to the sub-registrar for preservation. As per the Indian Registration Act of 1908, the buyer needs to register the property transaction documents with the sub-registrar. The property transaction documents can only be registered once the stamp duty has been paid.

As per the constitution of India, different states can frame different stamp duty charges for property transactions within their territory.