Stamp duty on different transaction types: sale, gift, partition, release

Most property transactions are sales — the calculator on this site handles those. But Indian property law recognises several other ways property can move from one person to another, and each one attracts its own stamp duty. The rates can be very different from the sale-deed rate.

This guide is a reference for the main transaction types and how their stamp duty is structured. The exact rate depends on your state — you will need to verify against the state Stamp Act schedule.

Sale deed

The standard property transfer. Buyer pays seller; sale deed records the transfer. This is what the main Stamp Duty Calculator computes. Stamp duty is usually 4 to 8 percent of the higher of consideration and the locality rate. Registration fee is 1 to 4 percent (capped in some states).

Gift deed

Property transferred without consideration — i.e. for free, usually between family members. The legal mechanics are similar to a sale (deed, stamp duty, registration), but the rate is often substantially lower when the gift is between specified blood relatives.

Most states define "blood relatives" for this purpose as parents, spouse, children, siblings, and (in some states) grandparents and grandchildren. The exact list varies. For gifts within this list, several states charge a token stamp duty:

• Maharashtra — ₹200 stamp duty + ₹200 registration for gifts of residential / agricultural property between blood relatives. Otherwise 3% stamp duty.
• Karnataka — ₹1,000 for gifts between specified family members, otherwise 5%.
• Madhya Pradesh — 2.5% for gifts to specified relatives, otherwise the full sale rate.
• Uttar Pradesh — reduced to a nominal ₹5,000 for gifts of immovable property between specified blood relatives (Yogi Adityanath government initiative).
• Delhi — 4% for gifts to women, 6% to men — same as sale-deed rates. No special concession for family.

If the gift is to a non-relative (a friend, an institution, etc.), the rate is usually the same as a sale-deed rate. This is the state preventing under-the-table sales disguised as gifts.

Partition deed

Used when co-owners — typically family members who jointly own ancestral property — agree to divide the property among themselves. Each co-owner ends up with a clearly demarcated share.

Stamp duty on a partition deed is typically lower than a sale, because the partition is not creating new ownership — just formalising an existing co-ownership. Most states charge a fixed fee or a low percentage (0.5 to 2%) on the value of the share each person ends up with.

Important: if the partition results in any co-owner receiving more than their share (with some compensation paid to the others), the excess is treated as a sale and stamp duty applies on that excess at the sale-deed rate.

Release deed (relinquishment)

Used when a co-owner gives up their share to one or more of the other co-owners. Commonly used in inheritance situations — for example, after a parent dies intestate and three children inherit, two of the children might execute a release deed in favour of the third.

Stamp duty on a release deed is usually lower than a sale, similar to a partition. Most states charge a fixed fee (a few thousand rupees) or 1 to 3 percent on the released share, often with special low rates between family members.

Exchange deed

Used when two parties swap properties — A's plot for B's plot, with or without cash adjustment. Stamp duty is usually computed on the value of the higher-valued property, at the sale- deed rate, paid by both parties (or whoever the deed nominates).

Mortgage deed

When a property is pledged as security for a loan. The mortgage deed creates an encumbrance on the property in favour of the lender. Stamp duty on mortgage deeds is typically 0.1 to 0.5 percent of the loan amount (much lower than a sale, because no ownership transfer is taking place).

Two specific sub-cases worth knowing:

• MODT (Memorandum of Deposit of Title Deeds) — when a home loan is taken without a formal mortgage deed, the bank instead records a MODT. Stamp duty on MODT is typically 0.1 to 0.5% of the loan amount, capped in some states (e.g., Maharashtra caps MODT stamp duty at ₹25,000).
• Equitable mortgage — created by simply depositing the original title deeds with the lender. No deed at all, no stamp duty in some states; a token amount in others.

Lease deed

For leases above 1 year, registration is compulsory and stamp duty applies. The rate depends on:

• The lease tenure (longer leases attract higher duty)
• The annual rent
• Any security deposit (in many states, the deposit is added to the rent for duty purposes)

Most states use a formula like "average annual rent × multiplier based on tenure". The duty is usually 1 to 3% of the resulting figure — much smaller than a sale deed.

For leases under 12 months, there is no compulsory registration and stamp duty is nominal (₹100 to ₹500 on a stamp paper). This is why most residential rental agreements in India are exactly 11 months long.

Power of Attorney (PoA)

Increasingly used (and often misused) for property transactions. A General Power of Attorney that includes the power to sell can effectively transfer property without a registered sale deed. The 2011 Supreme Court ruling in Suraj Lamp v. State of Haryana held that this is not a valid transfer, but the practice continues. Stamp duty on PoA varies — typically ₹100 to a few thousand rupees, but Maharashtra charges sale-deed-equivalent stamp duty on a PoA that grants the agent power to sell to specific parties.

Practical advice

Choose the right deed type for the actual transaction, not the one with the lowest stamp duty. A gift deed used to disguise a sale can be challenged by the income-tax department (which treats it as income from other sources for the receiver) and by the sub- registrar (penalty for under-stamping). Likewise, a PoA used in place of a sale deed will not give the buyer a clean title that can be sold on later.

For genuine family-property transfers, gift / partition / release deeds are exactly the right tools and worth using to save stamp duty legitimately. Always consult an advocate familiar with your state's schedule before drafting.

Related

• Stamp Duty Calculator (sale-deed rates by state)
• Stamp duty in India: how it works
• Common stamp duty mistakes buyers make