Stamp duty and registration charges in Uttar Pradesh

As is true of asset purchases in all parts of India, property buyers in India’s most populous state, Uttar Pradesh, are also liable to pay stamp duty and registration charges to get the asset registered under their names in the government’s records. In this article, we discuss the extent of expenses that buyers in UP have to bear, to pay these twin duties.

At the outset, it is important to mention that UP, the most populous state in India and the most affected state in the second wave of the COVID-19 crisis, imposes one of the highest charges on land and property registration. It has, so far, made no reductions in stamp duty charges, in spite of consistent pressure from builders’ lobbies and industry bodies to do so in the aftermath of the first and second waves of the Coronavirus pandemic, which have severely damaged buyer sentiment.

In February 2020, before the pandemic hit India, the UP government had also increased property registration charges from a standard registration fee of Rs 20,000 to 1% of the property’s value.

Stamp duty laws in Uttar Pradesh

Section 17 of the Uttar Pradesh (UP) Registration Act, 1908, mandates that any property transaction that involves a consideration value exceeding Rs 100, must be registered with the sub-registrar’s office. This means all property transactions in the state must be registered, to attain legal validity under the law. For property registration in UP, buyers have to pay stamp duty UP, as well as registration charges. In this article, we find out how much money buyers have to spend at the time of property registration.

Stamp duty and registration charges in UP

UP is among the states in India where stamp duty is comparatively higher. Buyers in UP have to pay 7% of the transaction cost as stamp duty. Note that buyers cannot register a property below the circle rates in any state. If the property is being registered below the government-determined circle rates, the buyer will still have to pay the amount applicable on the value as determined by calculating the circle rate.

* Note: Even though women are offered a 1% reduction in stamp duty charges in UP, this reduction is applicable only up to Rs 10 lakhs out of the total value of the transaction.

See also: Stamp duty and registration charges in 20 Tier-2 cities

Stamp duty for women in UP

Like many states where women enjoy a uniform reduced stamp duty on property registration, women in UP get a discount on this charge, only on the purchase of properties under a certain price bracket. In place of 7% stamp duty that is applicable if a male is the owner, women pay 6% stamp duty on registration of properties that cost Rs 10 lakhs or less. However, men and women both pay the same stamp duty if the property’s cost if over Rs 10 lakhs in UP.

UP RERA, industry bodies ask state government to cut stamp duty

Amid a dip in property registrations, because of the impact of the Coronavirus pandemic, the Uttar Pradesh RERA, in October 2020, wrote a letter to the state government, asking it to reduce stamp duty on property registration in order to boost consumer sentiment. The move by the state RERA was prompted by similar actions taken by states like Maharashtra, Madhya Pradesh and Karnataka, which lowered stamp duty in the wake of a tremendous reduction in property purchases. The UP government has yet to take an action in this matter.

Expecting a stamp duty reduction by the UP government soon, Amit Modi, director, ABA Corp and president-elect, CREDAI-Western UP, says that the reduction in stamp duty in Maharashtra has not only helped to convert pent-up demand in the mid-income and affordable segments in the Mumbai market but also prompted the conclusion of several large-ticket transactions in the metro city.

Industry bodies are urging the state government to return to the previous system, under which the UP government charged only Rs 20,000 as registration fees, to boost buyer sentiment in the post-COVID-19 atmosphere. In 2019, the state government started to charge 1% of the property transaction cost as the registration charge.

“If the registration fee is reduced to the minimum, property registrations will increase and revenue will go up for the state. We have urged the government to reduce stamp duty for the next six to 12 months, to speed up the purchase and sale of properties after the Coronavirus pandemic,” said Prashant Tiwari, president, CREDAI-western UP.

“It is essential to register the agreement but paying 1% fee is a big issue for any buyer as the average price of the property has gone up to Rs 40- 50 lakhs. In such a situation, we are requesting state government to reduce stamp duty and charge a minimum fee for registration of agreements to sub-lease,” added Subodh Goya, secretary, CREDAI-western UP.

Note here that in spite of  many calls by industry bodies and the centre to reduce stamp duty rates, the UP government has remained firm on keeping the rates unchanged so far. As a result of this, home sales in the NCR’s most affordable housing market, Noida, showed a decline of 28% in the January-March period of 2021, data available with Housing.com show.

Property registration charge in UP

Earlier in 2020, the UP government notified the new stamp duty rates and registration fee for property and other transactions and did away with the provision that capped the maximum charge at Rs 20,000 on transactions. Now, the registration fee is calculated as 1% of the sale consideration. This means that if the sale deed is being registered for a property valued at Rs 50 lakhs, the buyer should set aside Rs 50,000 as the registration charge.

See also: Stamp duty and registration charges in Lucknow

Stamp duty calculation example

Suppose that Ram Singh is buying a property of 800 sq ft carpet area in a location where the circle rate is Rs 5,000 per sq ft. Thus, the circle rate-based value of the property would be 800 x 5,000 = Rs 40 lakhs.

If the property is being registered at this amount, the buyer will currently pay 7% of this amount as stamp duty. This will amount to Rs 2.80 lakhs.

If the property is being registered at an amount lower than that, the buyer will still have to pay 7% of Rs 40 lakhs as stamp duty, since the property cannot be registered below the circle rate. If the property is being registered at Rs 50 lakhs, the buyer will have to pay 7% of Rs 50 lakhs as stamp duty, amounting to Rs 3.50 lakhs.

Ram Singh will also have to pay Rs 50,000 as the registration charge.

How to pay stamp duty online in UP?

Log on to the Uttar Pradesh Stamp and Registration Department portal (click here). Note here that the page will initially open in Hindi. Once you select the ‘आवेदन करें’ option, you will have the option to switch to English.

Now, apply for a registration and create an application number by selecting the ‘New Application’ option.

Once you register yourself using your credentials, you can login as a registered user. After this, you have to key in the details of the property, the buyer, the seller and the witnesses. Once you fill all those details, the system will calculate the stamp duty and registration charges for your property automatically. Once you pay the stamp duty, a receipt number will be generated. This number should be saved for future use and an appointment should be booked, for property registration at the sub-registrar’s office.

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