What is Stamp Duty and How is it Calculated?

Stamp duty calculator

Stamp duty is a type of tax that home buyers need to pay to the State Government while purchasing a property. This registers a homebuyer as an owner of a property. Stamp duty is an additional expense that homebuyers bear. 

Therefore, using a stamp duty calculator is important to compute this expense at the earliest. This allows an individual to estimate the total amount needed and opt for necessary advances. 

How to calculate stamp duty?

The stamp duty ranges between 3 to 10% in India. State Governments charge stamp duty on the ready reckoner rates, circle rate or the consideration value of a property, whichever is higher. For example, if a property’s circle rate is Rs.50 lakh and the agreement value is Rs.60 lakh, an individual must consider Rs.60 lakh to compute the stamp duty. 

Remember, stamp duty varies with each state. Besides stamp duty, individuals need to pay registration charges. Usually, individuals need to pay a registration charge of 1% based on a property’s total market value. Let’s take an example to understand it.

Suppose a willing homebuyer plans to purchase a property in Kolkata worth Rs.20 lakh. The stamp duty is 4%. In that case, he needs to pay a stamp duty of Rs.80,000 and Rs.20,000 as registration charges. Thus, the total expense is equal to Rs.1,00,000. This is a significant sum that individuals need to consider to avoid any financial inconvenience later. 

To avoid any shortfalls in a fund, consider a home loan. Several financial institutions offer affordable housing loans along with pre-approved offers. This streamlines the process further. Applicants can check their pre-approved offers by submitting their name and contact number. 

However, manual calculations can often lead to errors. Therefore, using a stamp duty calculator is important to get error-free results. 

How to use a stamp duty calculator?

Individuals can find a stamp duty calculator on the websites of several financial institutions. Take a look at the following step-wise guide to use the same:

Step 1: Visit the official website of your preferred financial institution. Select the stamp duty calculator from the menu.

Step 2: Now select the state of a property where it is expected to be sold. Choose the applicable property value. 

You will get an estimate of the payable stamp duty of a property. 

Top 5 factors affecting stamp duty of a property

Several factors affect a property’s stamp duty. Hence, consider the following while calculating it:

  • Location 

Stamp duty of property differs with each area. For example, stamp duties are higher in municipal areas than the one that falls outside it. 

  • Age and gender of a property owner 

Some states offer concessions on stamp duty for senior and female citizens. For example, the stamp duty is 4% for women while it is 6% for men in Delhi. While, states like Bihar, Jharkhand and Kerala do not offer such concessions. Additionally, female citizens of Uttar Pradesh enjoy a 1% concession on stamp duty. It is only valid if the property value does not exceed Rs.10 lakh.

  • Usage of a property

Property is used either for residential or commercial purposes. Stamp duty is usually lower in the former than the latter. 

  • Amenities present in a property

Housing projects offering high-end amenities, such as elevators, swimming pools etc., attract higher stamp duties. 

  • Property type

Stamp duty is lower on an old property than a new one. Further, whether a property is an independent house or a flat also determines a stamp duty. 

How to pay stamp duty?

Homebuyers can pay the stamp duty both online and offline. Select from the following options:


  • Franking

Individuals need to visit an authorised franking agent to get a stamp on the property documents. This ensures the legal validity of a property document. To avail this service, pay a nominal fee and franking charges of the respective agent. 

  • Stamp paper

Homebuyers can buy this stamp paper from an authorised seller. It summarises a property’s registration details. A stamp paper’s cost is equivalent to the applicable stamp duty. Hence, this process may appear inconvenient if the stamp duty is higher as home buyers need to buy multiple stamp papers.


  • E-stamping method

Pay applicable stamp duty online through SHCIL or Stock Holding Corporation of India. Once the payment is complete, individuals will receive an e-stamp certificate with a UIN. 

Read More: Thumb Rules to Keep in Mind Before Applying for a Home Loan

Stamp duty is one of the factors that determine the total cost that homebuyers need to bear. Hence, calculate it at the earliest and perform a cost benefit analysis of the property before finalising it. In this process, using a stamp duty calculator will prove convenient.

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