Stamp Duty in Maharashtra – Stamp Duty and Registration Charges in Maharashtra

After announcing a stamp duty rate cut in August 2020, the Maharashtra government decided not to extend the stamp duty waiver on property registrations beyond March 31, 2021. The state has also kept the ready reckoner rates unchanged for the financial year 2021-22.

According to the announcement made by the state government in August 2020, the stamp duty payable on property transactions was reduced in two slabs – by 3% from September 1, 2020 to December 31, 2020 and by 2% from January 1, 2021 to March 31, 2021.

The Maharashtra government, in its budget for 2021-22, also announced a concession of 1% over the prevailing stamp duty rate on property transactions, if the transfer of house property or registration of sale deed, is done in the name of women.

Following these announcement, property registration in the state, especially in capital Mumbai, increased significantly in spite of the economic pressure caused by the second wave of the Coronavirus pandemic.

“There is still demand among the home buyers and we believe the numbers will see a gradual uptick, once the government intervenes and tries to boost the demand with some quick and necessary measures. We urge the state government to reconsider and trim the stamp duty till March 2022,” said Ashok Mohanani, president, NAREDCO Maharashtra.

What is stamp duty?

Whenever any movable or immovable asset changes hands, the buyer has to pay a certain amount of tax to the state government, to get it stamped, which is known as stamp duty. The Maharashtra Stamp Act specifies such assets and instruments on which the stamp duty has to be paid to the state government. The Act also details the amount of duty to be paid to the government.

Is Maharashtra Stamp Act and Bombay Stamp Act same?

The Maharashtra Stamp Act was passed in 1958 and applies to all the instruments mentioned in Schedule 1, on which the stamp duty is payable to the state. The Act was amended recently and the amendments include a revision of stamp duty on gift deeds, inclusion of e-payment of stamp duty, revision of penalty clauses and increment of stamp duty under certain instrument clauses.

Stamp duty charges in Maharashtra

Stamp duty rates on property depend upon several criteria across Maharashtra state. This includes whether the property is located in urban or rural areas, total cost of the transaction, etc. Earlier in April 2020, the Maharashtra government has reduced stamp duty on properties for the next two years, in the areas falling under the Mumbai Metropolitan Region Development Authority (MMRDA) and municipal corporations of Pune, Pimpri-Chinchwad and Nagpur.

What is the stamp duty for first time buyers?

Stamp duty in Maharashtra: Impact of reduction on home buyers

Reduction in stamp duties makes a remarkable difference for home buyers, thus, benefiting them. The period between September 1,2020 to December 31, 2020 and from January 1,2021 to March 31, 2021 saw a reduction in stamp duty which was a welcome move, especially places like Mumbai and Pune where the property costs are already high. This move was lauded as home buyers  were saving on money that had to be paid upfront during a property purchase. Explaining with an example, if cost of a property in Mumbai is Rs 1 crore, the stamp duty to be paid in the period from September-December 2020 was Rs 2 Lakh and from January to March 2021 was Rs 3 lakh, unlike the Rs 5 lakh which home buyers have to pay now as the stamp duty is presently 5%. Hence, there was a clear savings of Rs 3 lakh or 2 lakh for the home buyers.

Registration charges in Maharashtra

The registration charges in the state are 1% of the total cost, for the properties priced below Rs 30 lakh and capped at Rs 30,000 for properties priced above Rs 30 lakh.

Stamp duty in Maharashtraon conveyance deed

According to Article 34 of the Maharashtra Stamp Act, which was amended in 2017, stamp duty on gift deeds is 3% of the property’s value. However, if the property in consideration is a residential or agricultural property and is gifted (without any payment) to family members, then, the stamp duty is Rs 200.

Factors that can impact Maharashtra stamp duty

There are several factors that impact the stamp duty rate and thereby, brings in some respite in the form of reduction.

• Age of the person: If the home buyer is a senior, there is a likelihood of him/her getting a reduction in stamp duty.
• Gender: To encourage women home buyers, sometimes there are options where women are granted a reduction in the stamp duty.
• Age of the property: If the property that a person is looking at investing is an old one, he may get a reduced stamp duty. However, if the property is a new property, then, there are chances that the stamp duty will be high.
• Type of property: A residential property commands lesser stamp duty than a commercial property.

How is stamp duty calculated?

Stamp duty is calculated on the basis of ready reckoner rates and the property value mentioned in the buyer-seller agreement. In Maharashtra, the stamp duty on property varies as per the location. For instance, stamp duty for a property located in the municipal limit of urban areas in Mumbai will be 5% of the market value, while a property located within the limits of any gram panchayat will attract stamp duty of 3% of the market value.

Stamp duty in Mumbai

Stamp duty in Mumbai varies across the region, depending upon the property location and type of deed.

Below is the stamp duty applicable on conveyance/sale deed after March 2021:

Check out Tamil Nadu stamp duty

Payment of stamp duty

According to the Maharashtra Stamp Act, all instruments chargeable with duty and executed in Maharashtra, should be stamped before or at the time of execution, or on the next working day following the date of execution. However, if the deed is executed out of the territory, it can be stamped within three months after it is first received in India.

The stamp papers must be in the name of one of the parties to the transaction and not in the name of the chartered accountant or lawyer of the parties. Moreover, the date of issue of the stamp paper must not be more than six months older than the date of the transaction.

Stamp duty charges can be paid by way of adhesive or impressed stamps on the deed. In addition to this, the adhesive stamps used on the deed is cancelled at the time of execution, so that it is not available for reuse.

Online payment of stamp duty

The Maharashtra Stamp Act has been amended to accept online payment, for stamp duty payable on instruments executed in the state. Follow these steps, to pay your stamp duty online:

Step 1: Visit the Maharashtra Stamp Duty online payment portal.

Step 2: Click ‘Pay Without Registration’ if you are not registered with the portal. If you are a registered user, fill in the login details.

Step 3: If you have selected the ‘Pay Without Registration’ option, you will be redirected to another page, where you have to choose ‘Citizen’ and select the type of transaction you want to do.

Step 4: Choose ‘Make Payment to Register your Document’. Now, you can opt for paying the stamp duty and registration charges together, or stamp duty only, or registration charges only.

Step 5: Fill in the details as required such as district, sub-registrar’s office, payment details, party details, property details and property value details.

Step 6: Choose the payment option and once done, generate the challan, which has to be presented at the time of execution of the deed.

If you are stuck at any step or you want to generate your challan again, you can drop a mail to vtodat.mum-mh@gov.in

Stamp duty on past property documents

While the Maharashtra Stamp Act empowers the collector of a district, to call for documents within a period of 10 years from the registration date of such documents, to verify if the appropriate duty has been paid on the deed, the Bombay High Court has held that stamp duty cannot be collected for inadequately stamped past documents, at the time of its subsequent sale. Moreover, if the historical documents are liable to be stamped, the stamp duty shall be recovered only at the market rate prevalent when the transaction took place. That means, stamp duty charges cannot be applied on a retrospective basis.

See also: Bombay HC rules stamp duty cannot be charged for past transactions

Maharashtra stamp duty adjudication

For matters in dispute, you can file the adjudication form from the downloads section. Click on ‘Forms’ and you will reach http://igrmaharashtra.gov.in/SB_DOWNLOADS/DOWNLOADS_Forms.aspx. Here, click on ‘stamps’ and then ‘adjudication’ and download the form. You can alternatively go to http://igrmaharashtra.gov.in/SB_DOWNLOADS/DATA/forms/Stamps/form_stamp_adjucation.pdf to access the form, a picture of which is shown below. 

Maharashtra stamp duty refund

You can get a refund of stamp duty in Maharashtra if:

• The stamp paper is not fit for use due to writing mistakes.
• The stamp paper is unsigned and complete or partial information is filled but is intended not to be used.
• The stamp paper is signed but the transaction is found to be illegal by the party as per Section 31 of Specific Relief Act.
• The court finds the transaction to be entirely illegal since the beginning (Void /ab/ initio) as per Section 31 of Specific Relief Act.
• The person whose signature is essential refuses to sign or has died before signing.
• Any party to the stamp paper document declines signing it.
• Any party to the stamp paper document does not comply with the terms and conditions.
• The value of the stamp for the document is insufficient and the transaction has been completed by using another stamp paper with the correct value.
• The stamp paper is spoiled and both parties have executed another stamp paper document for the same purpose.

Information to be filled online for stamp duty refund

To initiate stamp duty refund, it is compulsory to enter information through the online system. Once the information is fed online and a token is allotted, you have to submit the application offline. Mentioned below is the procedure in detail.

First you have to log on to the website of IGR Maharashtra and  select online services. Here, you have to click on the refund application link. Alternatively, you can go to https://appl2igr.maharashtra.gov.in/refund/

Here, click on the check box on understanding the terms and conditions and click on New Entry. Enter mobile number, OTP and captcha.

Then, you will get the refund token number. Now create password, confirm password, enter captcha and press ‘Submit’.

For a stamp duty refund, firstly one has to enter all their personal details, their bank account number and the reason for the refund. One has to enter all information about the document like if it is executed or not, registered or not etc. in the particulars of the document.

If the document is registered, and you want a stamp duty refund, you have to enter the document number, date and SRO details. Likewise, cancellation deed if registered, then registration number and  SRO details should be entered.

Next you have to enter particulars of the stamp including the type- whether it is e-payment, e-SBTR or franking, name of the stamp vendor along with his address, name and details of purchaser of stamp, value of stamp etc. On entering all stamp related details, an ‘Image Code’ in red will appear. You will have to mention that code in the blank frame and press on the ‘register’ button. Post this, your refund information is submitted and you will see the ‘acknowledgement‘ tab . Enter your refund token number in the application that has to be submitted to the office of collector of stamps for initiation of stamp duty refund.

Stamp Duty in Maharashtra: Tax Savings

Note that a person can avail of income tax deductions under Section 80C of the IT Act against stamp duty, registration charges and cess/surcharge he has paid.  The total deduction under 80C  is capped at Rs 1.5 lakh.

Maharashtra stamp duty latest updates

Mumbai BDD Chawls to be registered at Rs 1,000 stamp duty charges

August 19, 2021: While property buyers in Maharashtra state have to pay 5% of the property value as stamp duty charges, residents of Mumbai’s BDD Chawls that are more than a century old and are being redeveloped by the MHADA, have to pay only Rs 1,000 per unit, according to a proposal approved by Maharashtra cabinet on August 18, 2021.

 Mumbai witnesses 10-year high in property registrations, in July 2021

August 3, 2021: Mumbai recorded property sales of 9,037 units in July 2021, compared to 7,857 units registered in June 2021, indicating a month-on-month growth of 15%. The registrations in July 2021 were also the highest in 10 years, recording the highest number of sales since July 2012.

Property registration data showed that 53% of registrations in July 2021 were from new residential sales concluded in the month, recording a sharp improvement compared to 42% in June 2021, 29% during May 2021 and 7% during April 2021.

Stamp duty on lease agreements reduced for a limited period

The state government, on December 24, 2020, announced a reduction in the stamp duty on lease agreements of immovable property. The stamp duty on lease deed has been reduced to 2% from 5%, till December 31, 2020 and to 3% from January 1, 2021 to March 31, 2021. The cut is applicable to lease agreements of over 29 years.  The cuts are in line with the earlier reduction announced in September 2020, to boost property sales.

Stamp duty collection in Maharashtra

Even though the Maharashtra government did not extend the stamp duty waiver on property registrations in March 2021, the collections in the month of June 2021 stood at Rs 420 crores, which was at 93% levels of June 2019 when Rs 450 crores was collected by the state.

In May 2021, Rs 268 crores worth of stamp duty was collected due to the onset of the second wave of COVID-19. This was almost half of the collections in May 2019 (Rs 534 crores).  In April 2021, the stamp duty collections were 12% higher than April 2019. The total collections stood at Rs 514 crores in 2021 compared to Rs 460 crores in 2019.

Maharashtra stamp duty impact on property registration

After the Maharashtra government restored the stamp duty rate to 5% from April 1, 2021, property registrations have seen a dip of over 50% in April, in comparison to March. According to state government data, registrations across the state, excluding Mumbai, were at 90,500 on April 29. The month of March 2021 had seen a record spike of 2.13 lakh registrations, before the stamp duty relief was set to be lifted.

Earlier, as per the media reports, the announcement of the cut in stamp duty had boosted property sales in the state, especially in Mumbai where the sales of luxury flats skyrocketed after the announcement. According to media reports, between September 1 and October 17, 2020, high-end apartments worth Rs 2,200 crores were registered across 25 registration offices in Mumbai. Bollywood celebrities including Hrithik Roshan, Janhvi Kapoor, etc., also made their property purchases during this period and paid hefty sums as stamp duty. Some media reports also quoted that the property registrations made during September-November 2020, were the highest in comparison to the corresponding period in the past four years. Nearly eight lakh documents were registered since the announcement, till November 2020, as per media reports.

Maharashtra reduces premium for real estate projects

On January 6, 2021, the Maharashtra government announced a 50% reduction in construction premiums. The move will promote new launches in the Mumbai Metropolitan Region (MMR), which have come to a halt due to the Coronavirus pandemic and high starting costs. The reduction will be available for builders till December 31, 2021.

“After being hit by the pandemic, the realty market has seen an uptick in the state, post the stamp duty cut by the Maharashtra government and the status quo on interest rates by RBI in the last four months. The reduction in premiums would help the Mumbai market, as the city collected as many as 22 premiums under various heads, which is higher than other top cities. High premium puts a financial burden on developers, leading to higher costs for the home buyers. In the current economic scenario, the step would ease the burden and soften prices, resulting in more sales in the coming months,” said Mani Rangarajan, group COO, Housing.com, Makaan.com and Proptiger.com.

Recent judgements on Maharashtra stamp duty

Update on February 26, 2021:

In a recent judgement, the Bombay High Court directed the Maharashtra government to refund excess stamp duty, within four weeks from the date of receipt of the application, failing which they will have to pay interest at the rate of 12% per annum.

The ruling came on a case, which the petitioners, Macrotech Developers Ltd and Palava Dwellers, bought land that had been notified as ‘Integrated Township Projects (ITPs)’ situated at Kalyan and Bhiwandi under which the stamp duty for agreements and conveyances was reduced by 50% in Special Township Projects (STP). However, the state rejected the claims, stating that the concession under ITPs and the recent waiver on payment of stamp duty on the instrument of conveyance or agreement to sell any immovable property, could not be clubbed together. The petitioner appealed to the high court to which the bench held that both the waivers could be applied simultaneously and the state had to refund the excess stamp duty within the stipulated time.

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