Stamp Duty and Registration Glossary for Indian Property Buyers

Buying property in India means paying stamp duty, registration fees, and sometimes cess or GST on top. Each has a specific legal basis, a specific authority that collects it, and a specific document you receive in return. This glossary defines every term you will encounter when registering a property — from the day you sign the agreement to the day you collect the registered deed.

Stamp Duty

Stamp duty is a tax on the legal document that transfers property — typically the sale deed. In India, stamp duty is governed by the Indian Stamp Act, 1899 at the central level, but each state has its own amendments, rates, and exemptions under the Constitution's concurrent list. This is why stamp duty on a flat in Mumbai differs from the same-value flat in Noida or Bengaluru.

The key rule: stamp duty is calculated on the higher of the circle rate value or the agreed sale price. If a Pune flat has a circle rate value of ₹90 lakh but you paid only ₹85 lakh, the SRO will assess duty on ₹90 lakh. Underpaying stamp duty is a civil offence and the underpaid amount can be recovered with penalty. For term definitions related to circle rate, see our Circle Rate Terminology glossary.

Registration Fee

The registration fee is the separate charge for recording the sale deed in the official government register. It is governed by the Registration Act, 1908. In most states, the registration fee is 1% of the property value (the same higher-of-circle-rate basis used for stamp duty), often capped at a maximum amount. Maharashtra caps it at ₹30,000 for most residential transactions.

Stamp duty and registration fees are paid separately and go into different government accounts, though both are collected at the Sub-Registrar Office on the same day.

Franking

Franking is one of the older methods of paying stamp duty. The property document is taken to an authorised bank or franking machine, which imprints the amount of duty paid directly onto the paper. Franking is physically visible on the document as a printed impression.

Franking has largely been replaced by e-stamping in most major states, but it is still accepted in some states and for lower-value documents. The disadvantage is that franked paper must be used within a fixed period after franking, and it cannot be used for amounts above a state-specified threshold.

E-Stamping

E-stamping is the modern, paperless method of paying stamp duty. The Stock Holding Corporation of India Limited (SHCIL) runs the national e-stamping platform on behalf of state governments. Instead of a physical stamp paper, you receive a computer-generated e-stamp certificate with a unique certificate reference number (CRN) that can be verified online.

E-stamp certificates are available through authorised collection centres and some bank branches. They are considered more secure than traditional stamp papers because they are traceable and cannot be reused. Most urban SRO offices now require e-stamp certificates for high-value transactions.

Adjudication

Adjudication is the process by which the Sub-Registrar (or a designated officer) assesses whether the stamp duty declared in a document is correct. If the declared sale price appears lower than the circle rate for that locality, the SRO officer will ask for evidence of the actual transaction value and may re-assess the property at the circle rate.

If you believe the SRO's assessment is wrong — for example, if the circle rate used by the officer is for a commercial plot when your land is agricultural — you can file an objection. See our guide on How to Challenge a Wrong Circle Rate for the process.

Cess, Surcharge, and LBT

On top of the base stamp duty rate, several states levy additional cess or surcharges:

• Metro Cess (Maharashtra) — an additional 1% on stamp duty for properties in Mumbai, Pune, and Nagpur Municipal Corporation areas. This cess funds metro rail projects.
• LBT — Local Body Tax (Maharashtra) — an additional 1% on stamp duty for properties within Pune and Thane Municipal Corporation limits.
• Infrastructure / Transport Cess — some states have introduced similar surcharges for infrastructure projects. Always check the current state notification before estimating your total duty.

The stamp duty calculator on this site applies state-specific cess and LBT automatically for Maharashtra.

Stamp Paper vs Franking vs E-Stamp Certificate

These are three different physical forms that stamp duty payment can take:

• Stamp paper (traditional) — pre-printed government paper sold through licensed vendors. The value printed on the paper represents the duty paid. Still used for lower-value agreements (tenancy, affidavits, powers of attorney) in many states. High-value property transactions have largely moved away from stamp papers due to fraud risk.
• Franked document — any document on which duty has been paid via a franking machine. The franking impression is the receipt.
• E-stamp certificate — the SHCIL-issued electronic certificate with a CRN. The preferred method for all high-value property registrations in states where it is available.

The "Higher of Circle Rate or Sale Price" Rule

This rule is the foundation of how property stamp duty works in India. If the agreed sale price is higher than the circle rate value, you pay duty on the sale price. If the circle rate value is higher, you pay duty on the circle rate value. The government will not accept stamp duty calculated on any value below the circle rate.

Example: you buy a Delhi flat for ₹1.1 crore. The circle rate for that locality gives a value of ₹1.25 crore. Your stamp duty base is ₹1.25 crore, not ₹1.1 crore. You effectively pay duty on ₹15 lakh you did not spend.

Section 50C — Income Tax Implications

Section 50C of the Income Tax Act mirrors the "higher-of" rule on the capital gains side. If you sell a property below its circle rate value, the Income Tax Department will deem your sale consideration to be the circle rate value when computing capital gains. This means you may owe capital gains tax on the difference between your cost and the circle rate value — even if you genuinely agreed to a lower price.

Buyers should also be aware that purchasing significantly below circle rate triggers Section 56(2)(x) — the buyer may owe income tax on the gap as "income from other sources." Budget amendments have introduced some tolerance band, but the broad rule stands.

TDS on Property Purchase and Form 26QB

If you buy property for more than ₹50 lakh, you — the buyer — are required to deduct 1% TDS (Tax Deducted at Source) from the payment to the seller and deposit it with the Income Tax Department within 30 days. This is done via Form 26QB on the Income Tax portal. After filing 26QB, you download and provide Form 16B (the TDS certificate) to the seller.

Failure to deduct TDS or file Form 26QB attracts interest and penalty for the buyer. The ₹50 lakh threshold applies to the total transaction value. If you pay in instalments (common for under-construction purchases), each instalment that takes the cumulative total above ₹50 lakh requires TDS deduction from that point forward.

GST on Under-Construction Property

GST applies to under-construction properties purchased directly from a builder, not to resale transactions between individuals. For affordable housing (sale value up to ₹45 lakh, carpet area up to 60 sq m in metro cities), GST is 1%. For other residential under-construction property, the rate is 5% with no input tax credit. Ready-to-move-in flats with an Occupancy Certificate are outside GST scope entirely.

GST is in addition to stamp duty, not a substitute. A buyer of an under-construction flat in Bengaluru pays 5% GST to the builder and then pays stamp duty and registration fee to the state government separately when the flat is registered.

Worked Example: Total Transaction Cost

You are buying a completed resale flat in Lucknow, Uttar Pradesh for ₹60 lakh. The UP circle rate for that locality values the property at ₹55 lakh. Since your sale price (₹60 lakh) is higher, stamp duty is calculated on ₹60 lakh.

• Stamp duty (UP residential, male buyer): 7% × ₹60 lakh = ₹4,20,000
• Registration fee: 1% × ₹60 lakh = ₹60,000
• TDS on property (above ₹50 lakh threshold): 1% × ₹60 lakh = ₹60,000 deducted from seller payment
• GST: nil (resale flat, no GST applicable)
• Total government charges: ₹4,80,000 (TDS is already deducted from the amount you hand the seller)

For the full step-by-step calculation guide, see How to Calculate Stamp Duty in India. For the background on how circle rates affect this whole calculation, see the Circle Rate Terminology glossary.