Here’s How You Can Calculate Your Stamp Duty Charges for Your Gift Deed
Even though a property may be gifted to you, there are a lot of things you need to ensure in terms of legal procedures. Such things include gift deeds and stamp duties. For property such as a house to be considered a gift, you need to be careful about following all the documentation rules and processes.
What is a gift deed?
When there is a voluntary transfer of movable or immovable property from the owner or donor to another person,s the donee, without any exchange of money or any form of consideration, this transaction is declared through a legal document called a gift deed.
The important thing here is that there should be absolutely no monetary benefit or consideration that the donor receives from the donee. If that happens, then the transfer of the property will not be considered a gift. It’s also essential that this transfer is based on the free will of the donor when they are of sound mind.
What is stamp duty?
Whenever you buy property, there are two important charges involved – stamp duty and registration charges. Essentially, stamp duty is a type of tax that is levied by the state government and is a physical stamp that is impressed on the legal transaction document of the property. It’s payable on the sale deed as well as the gift deed. It’s essential to pay stamp duty during the registration of the property as it validates the transfer agreement. It is stamp duty that will help prove your rightful ownership of the property.
How do you calculate stamp duty for your gift deed?
Stamp duty is charged as a percentage of the property value and can be anywhere between 3% to 9%. It differs from state to state, type of property, the intended use of the property, etc. When you want to calculate stamp duty for your gift deed, another relevant factor is the relationship between the donor and done.
Since there are so many variables when you want to calculate stamp duty, the most convenient way to do so is to use a stamp duty calculator. You can calculate stamp duty online by using the stamp duty calculator on any of your trusted bank or financial institution’s official website.
Stamp duty and registration charges are essential components of a gift deed as they make the transfer of the property legal and binding. Make sure to use a stamp duty calculator to get an idea of this essential cost. A crucial thing to remember is that stamp duty in the case of a gift deed must be paid by the donor and not the donee. This is because if the donee ends up paying the stamp duty, that can be considered as consideration and that will render the gift void. Hence, stamp duty is the responsibility of the donor of the gift to pay.
Thus, you should definitely be aware of the stamp duty and registration charges before applying for a home loan.