When you buy property in India, two numbers matter: the price you agree with the seller and the circle rate the government has fixed for that area. This guide explains how the two interact.
Why the higher value wins
Stamp duty is calculated on whichever is higher — the agreement value or the circle-rate value. If you agree a price below the circle-rate value, you still pay duty on the circle-rate value, and the difference may also have income-tax consequences for both buyer and seller.
A quick example
Say the circle rate is ₹80,000 per sq m and the flat measures 90 sq m. The circle-rate value is ₹72 lakh. If the agreed price is ₹68 lakh, duty is still charged on ₹72 lakh. If the agreed price is ₹85 lakh, duty is charged on ₹85 lakh.
Use the stamp duty calculator on this site to run the numbers for your own property.