Stamp duty and registration charges: how they differ by state, and how to show them in a cost sheet

Stamp duty and registration fee are often the largest costs a buyer pays outside the price of the flat. Together they can add 6% to 8% or more to the total, and most of it has to be paid in cash because home loans usually do not cover it. Buyers who discover these costs late feel misled, even when the developer did nothing wrong.

Both are state subjects. Each state sets its own rates, concessions and caps, and changes them through budgets and notifications. This article explains how the charges work, gives examples from three states, and shows how to present them in a cost sheet.

01Stamp duty and registration fee are different

02The government value: ready reckoner, circle rate, guidance value

Every state publishes a minimum value for property in each area. Maharashtra calls it the ready reckoner rate. Delhi, Uttar Pradesh and Haryana use circle rate. Karnataka uses guidance value. Stamp duty is charged on the higher of this value and the agreement value.

The government value also matters for income tax. Under Sections 43CA and 56(2)(x) of the Income Tax Act, if the agreement value is lower than the stamp duty value by more than 10%, the stamp duty value can be treated as the sale price for the developer and the gap can be taxed in the buyer's hands. Deep discounts below the government value need tax advice before they are offered.

03Examples from three states

04When stamp duty is paid on a new flat

The timing differs by state. In Maharashtra, the agreement for sale of an under-construction flat is registered with full stamp duty, and that agreement is the buyer's main title document. In some other states, a smaller duty is paid on the agreement or construction contract and the bulk is paid on the sale deed at possession.

Your sales team must know which applies to each project, because it changes how much cash the buyer needs at agreement. Under Section 13 of the RERA Act, the agreement for sale must be registered before you collect more than 10% of the price, so stamp duty timing directly affects your collections schedule.

05Why home loans do not usually cover it

The RBI's Master Circular on Housing Finance allows banks to add stamp duty, registration and documentation charges to the cost of the house for computing loan-to-value only where the cost of the dwelling unit does not exceed ₹10 lakh. For most flats, these charges must come from the buyer's own funds. Tell buyers early so they plan for it.

06How to show government charges in a cost sheet

Separate what the buyer pays to the developer from what they pay to the government. Then show the totals.

• State the basis: 'Stamp duty at 6% on ₹70,90,000 (agreement value, which exceeds the ready reckoner value).'
• If the buyer is a woman or the purchase is joint, show the concession and its condition.
• Mark the date of the rate: 'Rates as notified on 1 October 2026.'
• Add a line saying statutory charges are payable as per the rates in force at registration.

LeadOne AI's cost sheets take statutory charges from project settings, so a rate change is made once and every new quote picks it up.

07Stamp duty offers

Developers sometimes advertise 'stamp duty waiver' or 'zero stamp duty'. The duty is still payable to the state. What the developer offers is to bear the cost, which is a discount by another name.

• Record it as a discount with its rupee value against the booking.
• Route it through the same approval policy as any other discount.
• Check the effect on the agreement value and the income-tax tolerance on stamp duty value.
• Put the offer and its conditions in writing.

08Before the registration appointment

1. Check that buyer names match their PAN and Aadhaar exactly. Mismatches cause problems with loans and TDS later.
2. Confirm eligibility and documents for any concession, such as the women buyer concession.
3. Compute stamp duty on the higher of agreement value and the government value for that unit.
4. Arrange payment through the state's official channel, such as e-stamping or Maharashtra's GRAS portal.
5. Book the sub-registrar appointment and tell the buyer which original IDs and photos to bring.
6. For NRI buyers, check that the power of attorney is valid and adjudicated as the state requires.
7. Record the registration date and document number against the booking. The next demand depends on it.

09Common mistakes

• Printing stamp duty at an old rate after a state budget change.
• Computing duty on the agreement value when the guidance value is higher.
• Leaving out the registration fee cap, or applying a cap from another state.
• Calling the cost 'all inclusive' without listing what is included.
• Forgetting that the buyer needs cash for these charges outside the home loan.