Stamp duty, and why India and the UK compute it differently
How a flat percentage differs from a banded one, the concession for women buyers in several Indian states, and what circle rate means for the amount you pay.
Last reviewed · 1,428 words
In short
- Indian stamp duty is a flat percentage of value — 5% to 8% depending on the state — plus registration of about 1%.
- UK stamp duty is banded, so each slice of the price is taxed at its own rate rather than the whole price at one.
- Duty is charged on the higher of the transaction value and the government's circle or guidance value, not on what you paid.
- Several Indian states charge 1% to 2% less where a woman is a buyer, worth a lakh or more on a mid-priced property.
- It cannot be included in a home loan and must be paid in cash at registration.
Stamp duty is a tax on the document that transfers property, paid at registration. It is the largest single transaction cost of buying a home, it cannot be borrowed, and the two systems this calculator covers work in fundamentally different ways.
India: a flat percentage
Indian stamp duty is a single rate applied to the whole value. The rate is set by each state and revised in state budgets.
stamp duty = price × duty rate ÷ 100 and registration = price × registration rate ÷ 100, so the cash needed at registration is the sum of the two. Note which price: duty is charged on the higher of the agreement value and the state's circle rate.
| State | Typical rate | Women buyers |
|---|---|---|
| Maharashtra | 6% (incl. 1% metro cess in cities) | 5% |
| Delhi | 6% | 4% |
| Karnataka | 5% above ₹45 lakh | 5% |
| Tamil Nadu | 7% | 7% |
| Uttar Pradesh | 7% | 6% up to ₹10 lakh of value |
| Haryana | 7% urban | 5% |
| West Bengal | 6% – 7% | Same |
| Gujarat | 4.9% | 4.9%, registration waived |
| Telangana | 5% | Same |
| Rajasthan | 6% | 5% |
Registration charges are additional, usually 1% of value, capped in some states — Maharashtra caps it at ₹30,000.
On a ₹80,00,000 property in Maharashtra: ₹4,80,000 of duty at 6% plus ₹30,000 of registration, so ₹5,10,000 payable at registration in cash. Registered in a woman's name, the duty falls to ₹4,00,000 — a saving of ₹80,000 for a change of name on the deed.
That concession is the single largest legitimate saving available in an Indian property purchase, and it is frequently overlooked. Joint ownership with a woman as first applicant qualifies in most states that offer it.
Circle rate, and why the price you paid may not matter
Duty is charged on the higher of the transaction value and the government's benchmark value — called circle rate in Delhi and much of the north, guidance value in Karnataka, ready reckoner rate in Maharashtra.
If you buy at ₹70 lakh in an area whose circle rate values the property at ₹80 lakh, duty is charged on ₹80 lakh. There is no relief for having negotiated a good price.
There is a second consequence in income tax. Under section 56(2)(x), where the circle rate exceeds the purchase price by more than 10%, the excess is treated as income in the buyer's hands and taxed at their slab rate. Buying below circle rate can therefore cost twice.
Circle rates are published per locality and per property type and are revised periodically, usually upward. Checking the applicable rate before agreeing a price is a five-minute exercise that occasionally changes the negotiation.
The UK: bands, not a flat rate
Stamp Duty Land Tax works like income tax. Each slice of the price is taxed at its own rate, so crossing a threshold only affects the amount above it.
For a residential purchase in England and Northern Ireland:
| Portion of price | Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Above £1,500,000 | 12% |
On a £400,000 purchase: nothing on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the remaining £150,000 (£7,500) — £10,000 in total.
An Indian flat-rate system would charge 5% of the whole £400,000, or £20,000. The banded system is why the effective rate on a UK purchase is always below the top band reached.
First-time buyers pay nothing up to £300,000 and 5% between £300,000 and £500,000, with no relief at all above £500,000 — which creates a genuine cliff at that price.
A second property or a buy-to-let carries a surcharge of 5 percentage points on every band, and non-UK residents pay a further 2 points.
Scotland and Wales operate their own taxes — Land and Buildings Transaction Tax and Land Transaction Tax — with different bands.
The difference the structure makes
A flat rate creates cliffs; a banded rate does not.
In Karnataka, duty is 3% below ₹45 lakh and 5% above it. A property at ₹44,90,000 attracts ₹1,34,700; at ₹45,10,000 it attracts ₹2,25,500. Twenty thousand rupees of price adds ₹90,800 of duty.
This is why Indian property is so often priced just below a threshold, and it creates a real incentive to understate the transaction value — which the circle rate rule exists to counter.
A banded system has no such cliff. Ten pounds above a UK threshold costs a few pence more, because only the ten pounds is taxed at the higher rate. The one exception is the first-time buyer relief at £500,000, which is all-or-nothing and does behave as a cliff.
What else is payable
Beyond duty and registration:
Legal and documentation charges, ₹15,000 to ₹50,000 in India depending on the transaction.
Brokerage, 1% to 2% of value, sometimes shared between buyer and seller.
GST on under-construction property, 5% without input tax credit, or 1% for affordable housing. Ready-to-move property with a completion certificate attracts none — which is a meaningful difference on a ₹80 lakh flat.
Society transfer charges and share certificate fees, in co-operative housing societies.
Mutation charges, to record the change in the municipal records, which is a separate step from registration and is frequently forgotten. Without mutation, the property tax bill continues in the seller's name.
Paying it
Indian duty is paid before or at registration, through e-stamping, franking or physical stamp paper depending on the state. Registration must generally occur within four months of executing the document; late registration attracts a penalty of up to ten times the deficient duty.
Both parties must attend the sub-registrar's office with two witnesses, identity documents and the original agreement.
It cannot be financed. Lenders compute loan-to-value on the property value excluding duty and registration, so the entire amount is a cash requirement on top of the down payment. A buyer who has budgeted only the down payment is short by 6% to 9% of the property value, and this is the most common reason a purchase stalls at the last step.
Reducing what you pay, legitimately
Register in a woman's name where the state offers a concession. On an ₹80 lakh property in Delhi that is 2 percentage points, or ₹1,60,000. Joint ownership usually qualifies.
Check the applicable circle rate before agreeing a price. Where the property is genuinely worth less than the benchmark, some states allow an appeal to the sub-registrar or a valuation officer, though the process is slow.
Buy ready-to-move where GST would otherwise apply. A completed property with an occupancy certificate attracts no GST, which is 5% saved — larger than the stamp duty itself.
Watch for time-limited state reductions. Maharashtra cut duty to 2% for several months in 2020-21 and other states have run similar measures. They are announced in state budgets and are worth knowing about if a purchase is flexible by a quarter.
Do not understate the transaction value. It is the obvious idea and it is both an offence and, since the circle rate governs the duty anyway, usually pointless. The income tax consequence under section 56(2)(x) can exceed the duty saved.
Duty on other documents
Stamp duty is a tax on instruments, not only on sale deeds, and several other transactions attract it.
Gift deeds. Charged at the same rate as a sale in most states, though several offer a large concession — or a nominal fixed amount — for gifts between close relatives. Maharashtra charges ₹200 on a gift of residential property to a spouse, son, daughter or grandchild.
Lease and rent agreements. Duty is payable on leases, calculated on the rent and the term. Agreements of twelve months or more generally require registration, which is why so many Indian rental agreements run for eleven.
Mortgage deeds, at a lower rate, often capped.
Partition deeds and release deeds between family members, usually at concessional rates.
Powers of attorney, where a general power to sell property is charged as though it were a conveyance in several states, to close a route that was widely used to avoid duty.
What this calculator assumes
- Rates current at the time of writing. State budgets revise them and the applicable rate is the one on the date of registration.
- Duty is computed on the value you enter — enter the higher of your price and the circle or guidance value.
- Registration charges are added at the standard rate for the state, with caps applied where they exist.
- Concessional rates for women buyers apply where the state offers them and where the property is registered accordingly.
- GST, legal fees, brokerage and mutation charges are not included and are additional.