Who Pays Whom in an Indian Property Deal

The six parties

Almost every explanation of Indian property costs is written as though there are two: a buyer and a seller. There are six, and the confusion in most deals comes from not knowing which one a particular demand belongs to — because your remedy is completely different depending on the answer.

Two of these six can be argued with on legal grounds. Two cannot be argued with at all. Knowing which is which is most of what this article is for.

A real deal, priced line by line

Take a specific case, because averages hide everything. A woman buying a single under-construction flat in Noida, sole owner, with a home loan. Base price ₹1 crore. The builder’s cost sheet adds the usual items.

The government’s share of that deal is ₹14,23,500 — 13.0% of the consideration, on top of the price. Note it is charged on the full ₹1,09,50,000, not the ₹1 crore that appears in the advertisement.

Separately, the buyer must withhold ₹1,09,500 — 1% — from what she pays the builder and deposit it with the Income Tax Department. That is not an extra cost. It is part of the price, redirected. But it must actually be done, and it must be done on each instalment as it is paid, not once at the end.

What most people miss

1. Adding ₹9.5 lakh to the price cost her ₹1.66 lakh in stamp duty

Uttar Pradesh gives a woman buyer 1% off stamp duty — 6% instead of 7% — but only where the value does not exceed ₹1 crore. It is a cliff, not a taper. At exactly ₹1,00,00,000 she pays ₹6,00,000. At ₹1,09,50,000 she pays ₹7,66,500.

So the ₹9,50,000 of add-ons cost her ₹1,66,500 in stamp duty — an effective marginal rate of 17.5% on that slice, because crossing the line does not just tax the excess at 7%, it re-rates the entire value.

FACT The 7% rate, the 6% women’s rate and the ₹1 crore ceiling were confirmed by running the Uttar Pradesh Stamp and Registration Department’s own official calculator on 5 September 2026. INTERPRETATION The 17.5% marginal figure is our arithmetic on those rates, not a published number.

One warning specific to Uttar Pradesh: the department’s own static fee-table PDF still shows the superseded rule — a 4% women’s rate capped at ₹10 lakh of value, worth a maximum of ₹10,000. That document predates the July 2025 Cabinet decision. The live calculator reflects current law; the PDF does not. Almost every commercial site quoting a “₹10,000 maximum rebate for women in UP” is repeating the old rule.

2. GST is 5% of everything, not 5% of the building

The notification charges 7.5% on the total amount including land, then deems exactly one-third of that total to be land value and takes it out. The arithmetic result is 5% of the whole consideration, and CBIC states it that way itself.

The one-third is deemed. It is not the actual land cost. In a market where land is half or more of the price of a project — which is most of Delhi NCR and Mumbai — the buyer is paying GST on land value that the notification has decided, for administrative convenience, is not there.

There is a 1% rate for “affordable” flats, but both limbs must be met: carpet area within 60 sq m in a metropolitan city (90 sq m elsewhere) and a gross amount not above ₹45,00,000. That ₹45 lakh ceiling has not been revised since March 2019. In Mumbai, Delhi NCR and Bengaluru it now excludes essentially the entire new-build market, which makes the 1% rate close to a dead letter in the cities where affordability is most discussed.

3. A completed flat attracts no GST at all — and that is not a concession

Once a completion certificate has been issued (or first occupation has happened, whichever is earlier) and the whole consideration is received after that point, the sale falls out of Schedule II paragraph 5(b) of the CGST Act and into Schedule III entry 5 — activities that are neither a supply of goods nor of services. It is outside the charge of GST entirely, not exempt from it.

The trigger is receipt of the entire consideration after the certificate. A buyer who paid instalments during construction and takes possession after the certificate still pays GST on everything paid before it.

INTERPRETATION A five-point wedge is a real number, and it belongs in any comparison between a new launch and a ready flat at the same price. It is rarely in the comparison, because the party running the comparison is usually selling one of the two. A resale, of course, brings its own costs — authority or society transfer charges, and usually brokerage — which the sections below cover.

4. The 1% TDS is calculated on the all-in figure, including the club and the parking

Since 1 September 2019, “consideration” for this purpose expressly includes club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee and any other charge of a similar nature incidental to the transfer. So the deduction base in our example is ₹1,09,50,000, not ₹1,00,00,000.

Two more traps. The 1% applies to the higher of the consideration and the stamp duty value — documenting a sale below circle rate does not reduce the withholding. And since 1 October 2024 the ₹50 lakh threshold is tested on the aggregate paid by all buyers to all sellers, which closed the old practice of splitting a ₹90 lakh flat across two buyers and two sellers into four legs of ₹22.5 lakh each and deducting nothing.

5. Some of what the builder is charging for may already belong to you

RERA defines a garage as a place with a roof and walls on three sides, and it is separately saleable. It defines common areas to include open parking areas, and common areas belong collectively to the allottees.

FACT Sections 2(y) and 2(n)(iii) of the Real Estate (Regulation and Development) Act, 2016. INTERPRETATION A covered or stilt bay can be sold to you. An open, unenclosed parking space is a common area — and selling a common area is a different thing from selling a garage.

The same logic reaches further than parking. Community and commercial facilities provided as part of a project are also common areas, to be conveyed to the association of allottees. A perpetual “club membership” charged over a facility that is a common area is a contractual assertion, not a statutory entitlement.

Development charges work the other way. EDC and IDC are genuine statutory levies on the builder under state urban development law — not an invention. But under the model agreement for sale prescribed by state RERA rules, the Total Price is defined as escalation-free and already inclusive of internal and external development charges, infrastructure augmentation charges, and the cost of electrical connectivity and wiring. The only permitted increase is one imposed by a competent authority — and the builder must enclose the notification with the demand. Even that is not chargeable to you if the increase comes after the project’s registered completion date.

What a builder cannot do

There is no single section of RERA that reads “the promoter shall not demand undisclosed charges.” Anyone who tells you there is one is paraphrasing. The prohibition is structural, assembled from five provisions, and it is worth knowing precisely — a vague claim is easy for a builder to deflect.

• Section 13(1) — a promoter cannot accept more than 10% of the cost as advance or application fee without first entering into a written agreement for sale and registering it. Note both points: it is 10% of cost, not of the “basic” price, and the agreement must be registered, not merely signed.
• Section 13(2) — that agreement must specify the dates and manner of payment, with internal and external development works particularised. A demand outside the specified manner is outside the contract the Act requires.
• The model agreement under state rules — the Total Price is a single escalation-free number, with a closed list of permitted increases.
• The state rule on earlier documents — in Haryana, rule 8(2) provides that an application or allotment letter signed before the agreement for sale “shall not be construed to limit rights and interests of the allottees.” The standard practice of burying charges in an application form does not survive this.
• Section 18(3) — failure to discharge obligations under the Act, the rules, or the terms of the agreement for sale attracts compensation.

A builder will point in return to section 19(6), which obliges the allottee to pay their share of registration charges, municipal taxes, water and electricity charges, maintenance, ground rent and other charges. That obligation is real — but it applies “in the manner and within the time specified in the said agreement for sale.” It presupposes disclosure. It does not cure its absence.

And on where your money goes: 70% of amounts realised from allottees must sit in a separate scheduled-bank account, usable only for land and construction cost, withdrawable only in proportion to completion, and only after an engineer, an architect and a chartered accountant have all certified that proportion. All three, not any one.

The lender

This is the part of the deal where the rules changed most recently, and entirely in the borrower’s favour.

Nothing can be charged that was not disclosed

Since 1 October 2024, every retail term loan — home loans squarely included, from banks, NBFCs and housing finance companies alike — must come with a Key Facts Statement carrying an all-in Annual Percentage Rate. The APR includes interest and all other charges, and third-party costs recovered through the lender, such as insurance and legal fees, form part of it and must be disclosed separately with receipts provided.

The operative sentence, from the RBI circular of 15 April 2024: any fees or charges not mentioned in the KFS cannot be charged to the borrower at any stage during the term of the loan without the borrower’s explicit consent. The KFS is also valid for at least three working days, and the lender is bound by its terms if you accept within that window.

Floating-rate home loans no longer carry prepayment charges

Under the RBI (Pre-payment Charges on Loans) Directions, 2025, for all loans sanctioned or renewed on or after 1 January 2026, a lender may not levy prepayment charges on a floating-rate loan to an individual for a purpose other than business. A home loan for your own residence qualifies.

Three things make this stronger than the rule it replaced: it applies irrespective of the source of funds, so a balance transfer to another lender counts; there is no minimum lock-in; and it covers NBFCs and housing finance companies, not only banks, which is where the old carve-outs used to live. Fixed-rate loans are not covered — for those, charges follow the lender’s approved policy, but must be based on the amount prepaid, and must have been disclosed in the sanction letter, the loan agreement and the KFS.

Two more things worth knowing

A bank may require the mortgaged property to be insured — that is a condition of the security. What it may not do is force you to buy from a particular insurer or link the purchase of any insurance product to the sanction of the loan. RBI’s Master Direction on financial services provided by banks says this in terms: the sale of insurance to a bank’s customer is “purely voluntary, and is not linked to availment of any other facility from the bank.”

And when the loan is closed, the lender must release your original property documents and remove the registered charge within 30 days. Where the delay is the lender’s, it must compensate you at ₹5,000 for each day of delay.

The broker

FACT Real estate agency services attract 18% GST, under heading 9972 of the rate notification. The correct classification code for selling a flat or house on commission is SAC 997222 — 997224, which is very widely quoted, is appraisal, not sales.

FACT An agent dealing in a RERA-registered project must be registered as a real estate agent under section 9 of the Act.

OPINION No Indian law fixes the brokerage rate, and no Indian law allocates it between buyer and seller. The familiar “1% from each side” is market custom and contract, nothing more. RERA regulates who may act as an agent and how they must conduct themselves; it says nothing about what they may charge. Which means it is negotiable, in both amount and incidence, and it is worth settling in writing before a property is shown rather than after an offer is accepted.

If the seller is an NRI, the deal is different — and the risk is the buyer’s

Where the seller is a non-resident, the buyer’s withholding obligation is not 1%. It falls under section 393(2) of the Income-tax Act, 2025 (formerly section 195), at “rates in force” — the actual tax rate on the income, currently 12.5% on a long-term capital gain, plus surcharge and cess. There is no ₹50 lakh threshold: a ₹15 lakh sale by an NRI attracts withholding.

The decisive point is the base. Absent a certificate, the deduction is computed on the entire consideration, not on the gain. On a flat bought for ₹80 lakh and sold for ₹1 crore, the gain is ₹20 lakh but the deduction base is ₹1 crore. The route out is an application under section 395(2) for a certificate fixing the deduction on the appropriate proportion — the seller’s job to obtain, but the buyer’s exposure if it is not obtained and not enough is withheld.

FACT A buyer deducting under the non-resident provision has needed a TAN. The Finance Act 2026 removes that requirement for a resident individual or HUF buying from a non-resident, with effect from 1 October 2026. As this is published the relief is not yet in force and the TAN is still required. It arrives in under a month.

The resale layer: transfer charges

On a resale these are separate from stamp duty and go to the authority or the society, not the government. They vary so widely that a national figure would be meaningless, and two examples show the range.

Haryana (HSVP) publishes a category-based schedule: ₹7,500 for LIG, ₹12,500 for MIG, and for HIG ₹25,000 up to ₹10 lakh of sale value plus 2% of the excess above it, with a processing fee on top.

A Maharashtra cooperative housing society is the more interesting case, because it is capped. Under the model bye-laws the transfer fee is ₹500 and the entrance fee ₹100, and the transfer premium is fixed by the general body but only within limits set by the Department of Co-operation. Bye-law 37(e)(ix) then says something that is routinely ignored: no additional amount towards donation or contribution to any funds or under any other pretext shall be recovered from transferor or transferee. Societies demand more anyway. The bye-law is the answer when they do.

And finally: registration is not mutation

These are two different acts, before two different authorities, under two different statutes, and a great many buyers believe the first accomplishes the second.

Registration operates on the instrument. The Sub-Registrar registers your sale deed under the Registration Act, 1908. That records that a document was executed. It is what your stamp duty and registration fee bought.

Mutation — dakhil kharij in UP, intkal in Haryana and Punjab, khata transfer in Karnataka, ferfar in Maharashtra — operates on the record of rights. It substitutes your name for the seller’s in the revenue or municipal record that determines who is billed for tax and who the state treats as being in possession.

Under the Uttar Pradesh Revenue Code, 2006, the registering authority merely sends intimation to the Tahsildar; the buyer must separately report the transfer, the fee is payable by the person in whose favour the entry is made, arrears of land revenue block the mutation, and a person who has not reported the transfer cannot even bring a suit in a revenue court. The appeal window against a mutation decision is thirty days.

OPINION Of everything in this article, an unmutated property is the failure most likely to surface years later — usually when the owner tries to sell, and discovers the record still shows someone else.

Run the numbers on your own deal

Every figure in the worked example above can be reproduced for your own property. The stamp duty and registration calculator covers 15 states including the women-buyer concessions, so you can test whether your all-in figure crosses a threshold before you commit to the cost sheet. The home loan EMI and eligibility calculator shows the repayment and the down payment the deal actually needs, and the brokerage calculator nets a commission down through GST and TDS. They are free, they need no login, and nothing you type leaves your browser.

Before you pay anything

• Ask for the cost sheet with every line itemised, and check whether the total the stamp duty will be computed on crosses a concession threshold in your state.
• Ask which parking is being sold: covered or open. If open, ask on what basis, given that open parking areas are common areas under the Act.
• Ask for the registered agreement for sale before paying more than 10% of cost — and check it is registered, not just signed.
• Check that every charge on the demand letter also appears in the agreement. Anything that appears only in the application form is on weak ground.
• Ask for the Key Facts Statement before accepting the loan, and read the APR, not the interest rate. Nothing outside it can be charged to you later.
• If the loan is floating-rate and sanctioned after 1 January 2026, confirm in writing that no prepayment or foreclosure charge applies.
• Confirm whether the seller is a resident or non-resident before agreeing the payment schedule — the withholding is completely different, and the exposure is yours.
• Deduct the 1% on each instalment, on the higher of price and stamp duty value, on the all-in figure, and file the correct form for the period.
• Diarise the mutation as a separate task, and the appeal window as thirty days.

What we could not confirm

Stated plainly, because a gap named is more useful than a gap filled with a plausible number.

• Noida and Greater Noida Authority transfer charges. Both Authority websites were unreachable, and every figure available elsewhere sits on commercial property sites. We have not published a number. The mechanism is a percentage of the applicable sector rate, differing between plots and group-housing flats, payable on the Transfer Memorandum.
• Haryana’s gendered stamp duty rates. The widely quoted 7%/5% male and 5%/3% female split could not be verified from any official source. What is verified: a 5% base conveyance duty, and a registration fee that is a slab amount capped at ₹50,000.
• Maharashtra’s metro cess and local body surcharge. The 1% metro cess said to apply in Mumbai, Pune and four other cities from April 2022 could not be verified officially. The sourced Maharashtra figure is 5% under Article 25(b)(i), before any municipal surcharge — so headline rates of 6% or 7% quoted elsewhere are not confirmed here.
• Whether Maharashtra’s 15-year resale lock-in on the women’s concession still applies. Reported as removed in 2023; no gazette order located either way.
• The 15% surcharge cap on capital gains. Well established in practice but not verified from an official source in this pass, and it changes the effective NRI withholding materially — roughly 14.95% with the cap against 17.81% without.
• CERSAI registration fee amounts. The statutory basis is verified; the rupee figures appear only on lender and aggregator pages.
• Karnataka’s registration fee, cess and surcharge. Universally quoted at 1%, 10% of stamp duty and 2–3%; no official Karnataka source was reachable to confirm them.

Sources and method

Every figure above was taken from the issuing authority, not from secondary reporting. Rates were verified on 5 September 2026.

• Stamp duty and registration, Uttar Pradesh — Stamp and Registration Department, official fee calculator, queried 5 September 2026. Women’s concession corroborated by Prasar Bharati’s report of the UP Cabinet decision, 23 July 2025.
• Stamp duty, Maharashtra — Maharashtra Stamp Act, 1958, Schedule I, Article 25(b), text as on 8 April 2025. Registration fee: Department of Registration and Stamps, Registration Fee Table.
• Stamp duty, Karnataka — Karnataka Stamp Act, 1957, Schedule, Article 20, as amended to Karnataka Act 30 of 2025.
• Registration fee and conveyance duty, Haryana — Revenue and Disaster Management Department / HALRIS published schedule.
• GST — Notification No. 03/2019-Central Tax (Rate), 29 March 2019; CBIC/TRU FAQ F. No. 354/32/2019-TRU, 7 May 2019; 34th GST Council press release, 19 March 2019; CGST Act, 2017, Schedule II para 5(b) and Schedule III entry 5. Agency services: Notification No. 11/2017-Central Tax (Rate), 28 June 2017, heading 9972, and the GST Council Scheme of Classification of Services.
• TDS and the new Act — Income-tax Act, 2025 (Act 30 of 2025), in force 1 April 2026 per PIB, 1 April 2026; sections 393(1), 393(2), 395. Form 141 and the transition rule: Income Tax Department e-filing portal, TDS Compliance. TAN relief: Memorandum to the Finance Bill 2026.
• RERA — Real Estate (Regulation and Development) Act, 2016, sections 2(n), 2(y), 4(2)(l)(D), 9, 13, 18(3), 19(6). Model agreement and rule 8(2): Haryana Real Estate (Regulation and Development) Rules, 2017, gazette notification of 28 July 2017.
• Lending — RBI Key Facts Statement circular, 15 April 2024, effective 1 October 2024; RBI (Pre-payment Charges on Loans) Directions, 2025, dated 2 July 2025, applicable from 1 January 2026; Master Direction on Financial Services Provided by Banks, 2016, para 18(d)(v); RBI circular on release of property documents, 13 September 2023.
• Transfer and mutation — HSVP Housing Wing published transfer schedule; Model Bye-laws of Cooperative Housing Society, Government of Maharashtra, bye-law 37(e); Uttar Pradesh Revenue Code, 2006, sections 34 to 37.