Are you planning to buy a house or any property? If yes, it is important to know, what stamp duty and registration charges in Rajasthan are? and how it adds up to total cost of your property purchase. While deciding the budget of the property, it is important to consider stamp duty and registration charges. So that you don’t get surprise during the purchase of your dream.
What is Stamp Duty?
Let’s imagine Ravi wants to sell his house, and Ayesha wants to buy that house. For this, Ayesha paid the amount asked by Ravi. Ravi transfers the home ownership to Ayesha, but as the government doesn’t know about the transaction, anyone can come and claim that the purchased house is theirs. To save from all these fake claims, we pay stamp duty and registration charges to legalise the transaction and also add the property ownership to the government records.
In simple terms: your kid wants to buy a toy, so you purchase it from a shop, and then the shopkeeper says to the kid I’ll stick the sticker of your name on the toy, which tells everyone that this toy belongs to you, but you have to pay some extra amount for the sticker.
Just like that, in the case of property, we pay stamp duty and registration charges so that no one can claim on the property in the future.
So, stamp duty = that sticker.
The percentage of stamp duty is decided by the State government under Rajasthan Stamp duty Act 1998.
Stamp Duty and Registration Charges in Rajasthan.
Stamp Duty for different deeds in Rajasthan.
Note: Registration charges for property transactions are 1% of the market value of the purchased property.
Stamp duty for power of attorney in Rajasthan
Role of the DLC rate in calculating the amount of stamp duty on property.
The full form of DLC rate is “District Level Committee Rate.” DLC rate is basically a minimum property rate set by the state government. DLC rate is used to prevent undervaluation of the properties during the sale of property.
For example, if you purchased a new property whose price is 45 lakhs but the DLC rate is 50 lakhs, then you have to pay the amount of stamp duty on the basis of the DLC rate instead of the purchased price (transactional amount).
As per the rule of the Rajasthan Stamps Act 1998, stamp duty needs to be paid on the higher price between the purchase price (transactional value) and the DLC rate.
There are two types of DLC rate.
1. External DLC Rate: External DLC rate applies when the property is situated beside a major road.
2. Internal DLC Rate: Internal DLC rate applies when the property is inside the residential or commercial colonies, away from the main road.
Buyers and sellers need to check the DLC rate before buying the property. As the cost of stamp duty creates a big difference between the decided budget for the property purchase and the actual price during the transaction.
Factors that influence stamp duty charges in Rajasthan.
1. Gender: The percentage (%) of paid stamp duty on the purchased property varies based on the buyer’s gender. Male buyers generally pay higher stamp duty compared to female buyers.
2. Age concession: Some deeds have a concession on the age of parents.
3. Age of property: Buying a newly constructed property attracts higher stamp duty than the old ones because of their higher valuation.
4. Special concessions for especially abled: An efficient concession are given to the disabled people based on their disability percentage.
5. Location of property: Properties located in central or prime areas typically attract higher stamp duty than those located in exterior or less developed regions.
Now let’s discuss the cancellation of the property transfer contract.
As per the law, if the buyer is true to his/her side of the contract and has paid the amount of stamp duty for that property, then there is no way you can revoke or withdraw your payment. The amount of stamp duty is certified by the Sub-Registrar in Rajasthan; the stamp duty is recorded in their books. You cannot withdraw the amount or avoid paying it once the property is registered in your name. In case the agreement gets cancelled for any reason, the buyer will be able to get refund successfully.
In case the contract is not completed and cancelled under 6 months, the buyer can get a stamp duty refund after a 10% deduction on the actual paid amount of stamp duty.
What is deed cancellation?
A deed cancellation comes in a picture when a sale transaction of the property does not happen, like one of the parties fails to proceed with their end of contact terms. The buyer can cancel a sale contract and initiate claims for refund when any one of the following events occurs.
1. The seller is bankrupt and has not been discharged of their debts.
2. The legal ownership of the property is not clear, or the seller does not have the right to sell the property.
3. The seller of the property has been imprisoned of a criminal offence with a sentence of more than 3 months or a heavy fine.
4. Failure to complete the process of registration process of the sale deed and deliver the property to the local government within the specified timeframe.
5. There is a change in the motives of one party or both parties of their intentions before the signing of the agreement, such as misrepresentation, duress, and undue influence, leading to non-performance.
6. Non-performance of the contract by any party (seller and buyer).
Can Stamp Duty be refunded in Rajasthan?
Yes, it is possible to get a refund of the paid stamp duty charges in Rajasthan, but only under certain specified conditions defined by the Rajasthan Stamp Duty Act 1998.
Below are the cases in which stamp duty can be refunded: -
1. Cancellation of a Sale Deed or Agreement: If the sale deed is cancelled within the six months, a buyer can request a refund. Refund can be claimed if the transaction of property is not legally valid due to any reason, like seller’s inability to prove a clear title, mutual consent, etc. In this situation, you can claim a refund.
2. Cancellation deed: But to claim the paid amount of stamp duty, one should have a new legal document, which is also known as a cancellation deed, that’s signed by all the involved parties, stamped, and officially recorded or registered with the government registrar to legally void the original agreement (sale deed), to prevent any rising future disputes and provide proof.
3. Duplicate payment or overpayment: A refund can be claimed if stamp duty was calculated incorrectly or if the buyer mistakenly overpaid the amount, or the buyer made the transaction twice.
4. Incorrect type of stamp paper: The amount of stamp duty may be claimed if the buyer mistakenly uses the wrong type of stamp paper, like a buyer required to use judicial stamp paper instead of non-judicial or vice-versa.
5. Court orders: If a court declares a transaction cancelled or void, the paid amount of stamp duty can be refunded after submission of the court’s order.
6. Mutual Consent: A refund can be claimed if both parties agree to cancel the sale deed due to unexpected situations.
7. Fraud or misrepresentation: If the sold property was sold under false representation or fraudulent activities were involved in the deal, the buyer has the right to claim a refund.
8. Breach of contract: If the terms and conditions mentioned in the contract are not fulfilled by any party can lead to the cancellation of the sale deed.
9. Legal incompetence: If it is discovered that one of the parties was not legally allowed to enter into the contract (incompetent), in this case, the party who paid the stamp duty can claim a refund.
Registration fees are generally not refundable, even if the buyer gets a refund of stamp duty. 10% of the amount is deducted while claiming the stamp duty as an administration cost on the original amount of stamp duty.
Before finalising any property transaction, always verify applicable amount of stamp duty, DLC rates, and refund conditions. Proper planning today can save you from legal complications and financial losses tomorrow.