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We, at JP Infra, believe that building a home is not just about investing in property. Here we not only offer you various reasons to invest in property in Mumbai or why Mira Road is the best location for property investment in Mumbai right now, but also a list of innovative ways and unique quirks to transforming your house into a vibrant, lovely home.

| March 30, 2023

Understanding the Basics of Stamp Duty

Buying your first home is a complicated, step-by-step process that involves numerous hidden costs. Stamp duty is one example of such an expense. It is one of the costs associated with purchasing a new home. This cost is included in any property-related financial transaction in India. So, what exactly is it, and how can it influence your home-buying decision? Let’s take a closer look at why you need to account for it when purchasing a new home.

It is important to note that stamp duty and registration fees are not included in the home loan and must be paid by you. Thus, making it one of the major reasons why you should consider it in your home-buying decision.

Stamp Duty is a tax levied on the sale or transfer of the ownership of a property. Physical possession of a property does not constitute legal ownership. To be considered legally yours, the property must be registered in your name.

Stamp duty is collected by state government to legalise your registration agreement. State governments impose a tax on the sale or ownership of all property within their jurisdiction. A ‘stamp duty paid’ label on your registration document is required for it to serve as a legal record of your property ownership.

Unless otherwise agreed, the stamp duty is usually paid by the transferee. Stamp duty is due whether the property is under construction, finished, or resold.

Under Section 3 of the Indian Stamp Act, 1899, stamp duty is a tax levied by respective state governments on all property transactions within India. The Indian Stamp Act contains detailed provisions regarding stamp duty payment, valuation for stamp duty payment, mode of payment of stamp duty, and so on. Stamp duty is a state subject under the Indian Constitution (Entry 63 of State List-II), and it varies from state to state since it’s not constant. A properly stamped document or instrument has evidentiary value and is admissible in court of law.

As previously stated, stamp duty varies by state and is also determined by the value of the property or the circle rate, whichever is higher as determined by each State Government. It varies depending on the type of property, such as commercial or residential, rural or urban areas. Furthermore, there are numerous factors that influence the stamp duty on a specific property.

Factors Influencing Maharashtra Stamp Duty and Registration Fees

In Maharashtra, stamp duty and registration fees are calculated based on location and ready reckoner rates. The following are some of the major factors influencing Maharashtra stamp duty and registration charges.

  • Type of Property: The type of property affects stamp duty and registration charges in Maharashtra. For example, a buyer may pay less stamp duty on a residential property than on a commercial property.
  • Age of the Property: The age of the property is also important when calculating stamp duty and registration fees in the state. An individual investing in an old property may pay lower stamp duty charges than a person investing in a new property.
  • Age of the Buyer: The age of a property is a crucial factor in determining the stamp duty and registration fees in Maharashtra.
  • Property Location: The location of the property can also affect the stamp duty and registration charges in Maharashtra. Stamp duty charges in Maharashtra are based on reckoner rates that vary depending on the property’s location.
  • Gender of the Buyer: State governments in India are required to charge women a discounted stamp duty fee.
  • Amenities available in the property: Stamp duty charges are also influenced by the amenities available in a property. A building with more amenities is subject to higher stamp duty fees than one with fewer amenities.

Although stamp duty is a one-time fee, failure to pay on time may result in penalties. You might have to pay the overdue amount plus a penalty of 2% interest per month on the deficit amount or the fine could be up to 200% of the original liability.

How is it distributed to the government?

Prior to digitization, stamp duty had to be paid in person at the sub-registrar’s office, following a lengthy process. While this option still exists, it can now also be paid online, offering a more convenient and efficient method while also deterring counterfeiting.

Currently, Stock Holding Corporation of India Limited (SHCIL) handles all online registrations in India, apart from Mumbai. Online payment of stamp duty in Mumbai must be paid through the Maharashtra Government’s Government Receipt Accounting System (GRAS).

There are three options for paying the stamp duty on your new home purchase.

  • e-Stamping: e-Stamping is the quickest and most convenient way to pay online.
  • Non-Judicial Stamp Papers: One of the traditional methods of payment is to go to the nearest sub-registrar office.
  • Franking: Franking is the process of imprinting your sales contract with a red mark using government-approved automated franking machines.

You must pay it before the execution of your property document, or at the very least on the next working day of execution. By execution, we mean the signing of property transfer documents by the parties involved in the transaction.

Stamp duty and the additional taxes in Maharashtra:

There is a cess/surcharge payable in urban areas within Municipal Corporation or Municipal Council limits. This is 1% of the property value and is intended to be used to fund urban transportation infrastructure projects such as metros, bridges, and flyovers.

In rural areas under Gram Panchayat jurisdiction Zilla Parishad cess replaces the surcharge. This tax is also 1% of the purchase price of the property.

An extra 0.5% surcharge is applied to properties under the administration of the Nagpur Municipal Corporation (NMC) and the Nagpur Improvement Trust (NIT). This is in addition to the 1% cess/surcharge.

Stamp duty, cess/surcharge, and registration fees paid are eligible for income tax deductions under Section 80C of the Income Tax Act. Section 80C of the Income Tax Act of 1961 permits a total deduction of Rs. 1.5 lakh.

Conclusion :

Stamp duty is a tax under Section 3 of the Indian Stamp Act, 1899 that must be paid when registering a legal document with the government. It is applicable to all legal property transactions.

Stamp duty is levied on a variety of documents, including property sale agreements and rental agreements, among others, and serves as legal proof that the purchase of a property has been completed and registered in the owner’s name. The Stamp Duty rate varies by state. It is based on the current ready reckoner rates or the current market value or consideration value of a property, whichever is greater. There is also a list of factors that influence the stamp duty on a specific property.

Stamp Duty, being a mandatory charge that comes with the legal purchase of a property, has a significant impact on the overall cost of the property. As a result, you should familiarise yourself with the current Stamp Duty rates in the state in which you are purchasing a home.

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| March 18, 2023

Significance of Location in Residential Real Estate

Are you looking for a new home in the Mumbai suburbs that fits your budget? Finding affordable flats in this bustling suburb of Mumbai can be challenging, but not impossible. With the right approach and guidance, you can find low-budget flats in areas like Andheri, Jogeshwari, Borivali, and Bandra as well.

It often happens so, that when we are searching for our new home, we consider an ample of factors like size, layout, and price. However, one factor that’s often overlooked is location. Where your house is located can have a big impact on your quality of life, your future resale value, and more. 

So, what constitutes a “good” location? Here are a few important factors to consider when determining the location of a home.

Easy Commute: When it comes to finding a flat in the suburbs of Mumbai, (e.g., Andheri, Ghatkopar, Parle, Kandivali etc) you want to prioritise properties that are located near public transportation, such as metro stations or railway stations. This will make your daily commute much easier and more convenient, saving you time and money in the long run. Additionally, properties that are located near major highways can also offer easy access to other parts of the city. So, targeting flats near railway stations or metro stations, which can provide you with the benefit of easy traveling will be feasible.

Lifestyle: Your chosen neighbourhood will reflect on your lifestyle preferences. By considering your personal needs and choices, you can ensure that the location of your new home aligns with your daily routine and enhances your quality of life.

Civic Amenities: If you are planning to live at this new house, you might want convenient access to services and facilities like hospitals, restaurants, local stores, outdoor gardens etc. A residence closer to these amenities will be favorable and which is one reason why location is so crucial in real estate. Social amenities such as schools, colleges, shopping centres, entertainment hubs should also be considered when looking for a property to buy. When considering purchasing a property, take into account how close it is to these important amenities.

Safe Neighbourhood: No matter which region or area of the city you are looking in, safety and security are top concerns for any home buyer. Be prudent about choosing the location for your home area to make sure that the property is located in a safe neighbourhood. You can also check online reviews and ratings to get a sense of the area’s reputation for safety.

Social Infrastructure: The quality of the surrounding infrastructure can also affect your convenience and property value. Flats that are located in areas with good road connectivity, public transportation, and social infrastructure can make your daily commute smoother and enhance your quality of life. Additionally, check for facilities like availability of water, electricity, and waste management, as in today’s time these are crucial for a comfortable living experience.

Lot Size: When we talk about size preferences in the suburbs or nearby areas, (e.g., Malad, Goregoan, Marol, etc) 1 BHK and 2 BHK flats are popular choices. These types of flats are majorly considered in comparison to the larger properties. As they are easier to maintain, easily available in those areas and can be a great choice for single professionals, couples, or small families. However, make sure to choose a flat that fits within your budget and doesn’t compromise on quality or safety.

Resale Value: While you may not be thinking about selling your new home right away, it’s important to consider the potential for future resale value. Under-construction projects or projects in developing areas with upcoming infrastructure projects have a higher chance of appreciating in value over time. Additionally, properties that are located near major commercial or business centres can offer great potential for appreciation.

Future Developments: Along with considering the immediate factors of purchasing a residential property, you must also diligently research the locality’s future development possibilities. Plans for schools, hospitals, public transportation, and other forms of public infrastructure can significantly boost property values in an area. Commercial development can increase the desirability and value of your property in the future.

In conclusion, finding low-budget flats in Mumbai is a process that requires careful consideration of various factors. By keeping in mind, the above factors, you can find a flat that meets your needs and budget. 

The area/part of the city of your flat is located can a crucial factor that can affect your lifestyle, commute, and investment value. Aim for flats that are located near public transportation services, as this can make your daily commute easier and less time-consuming. You can also save on transportation costs and avoid traffic congestion. A well-connected neighbourhood can also add to your quality of life.

For instance, JP Infra Pvt. Ltd.’s Codename Highway Touch is a promising project near Andheri East with 1 and 2 BHK flats that offer easy access to the Western Express Highway, metro stations, and offer a wide range of amenities at an affordable price.

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