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Is Stamp Duty Payable on Power Backup and IFMS Charges in a New Inventory Agreement?

Ramalingam

Ramalingam Kalirajan  |8482 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 22, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Oct 21, 2024Hindi
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Hi, While purchasing new inventory agreement is made of total value including cost of flat , power backup ,ifms charges etc While doing registery , kindly let me know stamp duty has to be paid upon land value or it also includes stamp duty on Power backup , ifms

Ans: When purchasing a flat, there are several components to consider regarding the total cost. One key aspect is the registration of the property, where stamp duty plays a crucial role. Let me break it down for you in simple terms.

What is Stamp Duty?

Stamp duty is a tax levied by the government when you register your property. It is a mandatory payment and is calculated based on certain aspects of the property’s value. This tax is essential for the legal ownership of the property to be transferred to your name.

What Does Stamp Duty Cover?

When it comes to calculating stamp duty, the primary focus is usually on the value of the property. However, there is a distinction to be made between the land value and other charges. Let’s clarify:

Stamp duty is typically levied on the circle rate or agreement value of the property, whichever is higher.

Power backup, IFMS (Interest-Free Maintenance Security), and other charges are considered additional costs. These are generally not included in the base value for stamp duty calculations. So, stamp duty is not typically calculated on these charges.

However, certain states may have different rules, and there can be variations. It is crucial to check the local state laws where the property is being registered.

Land Value vs. Total Cost

The stamp duty is mainly applied on the land value or property value as per the market or circle rate.

Other charges, such as power backup, IFMS, or club membership fees, are often part of the overall deal but are not counted toward stamp duty.

However, it’s essential to ensure all these costs are clearly mentioned in your sale agreement. A professional legal consultation can help avoid any surprises.

State-Specific Rules

Each state in India has its rules for stamp duty calculation. The stamp duty rate may vary depending on:

Location of the property (urban or rural)
Type of property (residential or commercial)
Gender of the buyer (some states provide concessions for women buyers)
It’s advisable to check with the sub-registrar’s office or consult a local certified financial planner or legal expert who can guide you on state-specific regulations.

Final Insights

In most cases, stamp duty is calculated based on the property value, excluding charges like IFMS and power backup. But ensure all the components of the deal are clearly laid out in the agreement to avoid any confusion during registration.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Nayagam P

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Career Counsellor - Answered on May 21, 2025

Career
Sir, I have got 87% marks in mains. Please tell me a college where I can get a branch.
Ans: Aditi, Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main/Advanced Results – A Step-by-Step Guide

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Also, please have some other back-up options instead of relying only on JEE/JoSAA/NITs/IIITs/GFTIs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions and a bright future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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