What is Stamp Duty
In India, the tax collected by the government to give legal recognition to certain instruments—such as property conveyances, leases, wills-related instruments, gift deeds, loan/mortgage agreements, partnership deeds, or powers of attorney—is called Stamp Duty. Whenever a transaction must be made dispute‑resistant and acceptable before a court or public authority, the instrument evidencing that transaction has to be stamped as per law. Stamping is the act of paying the prescribed stamp duty on that document. Across most Indian states, including Maharashtra, stamp duty for property‑linked instruments is determined on the basis of the property’s market/assessed value and the nature of the instrument, and payment is made before or at the time of registration.
Why is stamp duty necessary?
The foremost purpose of stamp duty is to provide legal validity and protection to an instrument. Once the prescribed duty is paid on a sale deed or lease agreement, that document becomes legally robust and remains admissible in official and judicial processes. Stamp duty is also a vital revenue source for states; proceeds fund public services, infrastructure and administration. If a required instrument is executed without stamp duty or is under‑stamped, it may be unregistrable, inadmissible as evidence in court, and can attract heavy penalties. Therefore, pay the correct duty before or at execution/registration.
Which instruments attract stamp duty?
Typically, instruments connected to property transactions attract duty—such as a sale deed, agreement for sale, conveyance deed, lease/rent agreement, gift deed, mortgage/loan agreement, partnership deed, and power of attorney, among others. The type of instrument and its terms drive duty calculation. For example, duty on a term‑specific lease is determined differently from a sale conveyance; likewise, a gratuitous transfer (gift) can carry a separate rate. Note: A will or its probate ordinarily does not attract stamp duty; probate/certification involves court fees under separate laws, and registration of a will is optional.
Usual rates and concessions in Maharashtra
In Maharashtra, stamp duty on property‑related instruments generally falls in the 3% to 7% band, depending on the nature of property, its location and prevailing rules. For women purchasers of residential property, the state provides around 1% concession vis‑à‑vis men in many cases. From time to time, concessions or remissions are notified for eligible beneficiaries under special schemes such as PMAY or MHADA. In addition, certain trusts, educational and religious institutions may qualify for concessions subject to conditions. Always check the latest orders/circulars to know the exact liability for your case.
Legal framework: which laws govern stamp duty?
The national backbone is the Indian Stamp Act, 1899, which lays out the framework of duty on various classes of instruments. States may specify their own rates and procedures. In Maharashtra, the domain is governed by the Maharashtra Stamp Act, 1958, which specifies the chargeability, rates, time and mode of payment, and penalties for short‑levy/deficit duty.
Modes of payment: e‑Stamping, Stamp Paper, and Franking
For most transactions today in Maharashtra, e‑Stamping is preferred. Through the GRAS portal (https://gras.mahakosh.gov.in), citizens generate the challan and pay the duty online. Advantages include real‑time traceability, immunity from back‑dating and forged papers, and swift verification during registration.
As a traditional option, stamp papers of fixed denominations can still be used, on which the instrument is drafted. However, for high‑value transactions, issues of availability, denomination matching and verification make e‑Stamping more reliable. A third option is franking, where an authorised bank/agent affixes a printed frank impression on the document certifying payment of duty. Use only authorised entities and keep the receipt safely.
| Mode of payment | How it works | Key advantages |
|---|---|---|
| e‑Stamping | Create challan and pay online via GRAS; e‑stamp receipt generated | Quick verification, no back‑dating risk, digital record |
| Stamp Paper | Draft instrument on fixed‑value stamp paper | Offline option; simple for small transactions |
| Franking | Authorised bank/agent imprints frank on the document | Direct imprint with bank receipt as proof |
Note: Rates and procedures may change over time; verify the latest instructions before registration.
How are rates checked and how is value determined?
For property instruments, duty is usually derived from Ready Reckoner (circle) rates along with the property’s location, type and use. In Maharashtra, the IGR Maharashtra (https://igrmaharashtra.gov.in) website provides circle rates, calculators for stamp duty/registration fees and guidance notes. Even if the stated sale consideration is lower than prevailing market/circle rates, duty is typically levied on the higher of the two to prevent revenue leakage.
What if stamp duty is not paid?
An unstamped or under‑stamped instrument fails legal standards. Such a document may be treated as invalid, its registration may be refused, and it can be inadmissible as evidence in court. In many cases, on detection of deficit duty, authorities levy penalties and require payment of the shortfall before the instrument can be acted upon. Best practice is to ensure correct stamping prior to or at the time of execution/registration.
Common mistakes to avoid
Frequent errors include choosing the wrong denomination/value (e.g., cobbling together small stamps to match a large figure, which complicates verification), using old/expired stamp papers, executing the document first and stamping later, and partial payments (intending to make up the balance later). Another avoidable lapse is failing to record a clear clause allocating who bears stamp duty—this can create disputes during registration. Always align the instrument language with your agreed commercial understanding.
Who pays stamp duty?
In a typical sale of immovable property, the buyer bears stamp duty. However, parties can allocate the burden by contractual agreement, and in some commercial leases or special contracts it is shared. Whatever you agree must be explicitly written into the instrument so that there is no ambiguity at the sub‑registrar office. The document presented for registration should mention who paid the duty and annex the e‑stamp/franking receipt accordingly.
Concessions for women, special schemes and institutions
Women purchasers of residential property in Maharashtra often receive around a 1% duty concession—subject to periodic notifications. Eligible beneficiaries under schemes like PMAY or MHADA may also receive notified concessions/remissions. Registered religious/educational trusts and charitable institutions may be eligible under certain conditions as per prevailing circulars. Always confirm current eligibility and documentation requirements.
Practical workflow
First, fix the valuation of the property/instrument using Ready Reckoner rates and local criteria. Next, compute the stamp duty and registration fee. In most cases, citizens generate an e‑stamp via GRAS or get the document franked at an authorised bank. Present the instrument with the proof of payment for registration at the sub‑registrar office; officials verify the e‑stamp/franking/stamp paper. If a deficit is found, short‑duty and penalty may be recovered on the spot. Finally, the document is indexed and recorded, and certified copies are issued to the parties.
Useful digital portals and services
Use GRAS (https://gras.mahakosh.gov.in) for paying duty online and generating the e‑stamp receipt. Visit IGR Maharashtra (https://igrmaharashtra.gov.in) for Ready Reckoner rates, calculators and guidance. Since rates and procedures are periodically revised, consult the latest circulars/instructions on these portals before completing your transaction.
Precautions and best practices
Estimate the exact liability before drafting and prefer e‑Stamping where possible. If you must use stamp paper, verify its denomination, authenticity and date. Keep page numbering/initials consistent across the instrument to prevent post‑execution insertion/removal. When using franking, ensure the authorisation of the bank/agent and retain the receipt. Most importantly, include a clear contract clause on who bears duty.
Instead of a conclusion—practical sense
Stamp duty is not a mere formality; it is an essential process that gives legal strength to your document. With the usual 3–7% band in Maharashtra, the ~1% concession for women, scheme‑linked remissions and digital e‑Stamping, the ecosystem is increasingly transparent and convenient. Paying the right amount at the right time, choosing a valid mode, and preserving proofs make your document court‑worthy and save you from future disputes, penalties and delays. If this is your first property purchase or a high‑value contract, rely on official calculators and guides, seek professional advice where needed, and make sure the duty is fully and correctly paid before execution.
Disclaimer
This article is for general information and awareness only. Rates, procedures and concessions change from time to time; always verify with the latest official notifications and consult the sub‑registrar/IGR or the GRAS portal before any transaction/registration. This is not legal or tax advice. For your specific situation, consult a qualified advocate/chartered accountant/registration professional. In case of any conflict, the applicable Acts, Rules and government notifications shall prevail.
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