Mortgage tax

Mortgage tax is a tax levied on the creation or registration of a mortgage, typically in the form of a stamp duty on the mortgage document. It is a one-time charge paid when a property is mortgaged, rather than a recurring tax on income or property value.

Key Features: Usually calculated as a percentage of the loan amount or property value. Paid to the state or local government where the property is located. Serves as a legal requirement for registering the mortgage with authorities. Ensures validity and enforceability of the mortgage agreement.

Example: A borrower takes a mortgage of ₹50 lakh to purchase a property. If the mortgage tax (stamp duty) is 0.5%, the tax payable would be ₹2.5 lakh at the time of registration.