What is the meaning of Franking Charges?

If you have already bought a property or a piece of land in India, then you might know about franking and the charges associated with the same. Franking is an easy process that is done to confirm the payment done for stamp duty. Years back, printed stamp papers were known to be the only source to confirm stamp duty payment. Any land, property or loan-related documents that were printed before the franking era had stamp duty paid and printed within a non-judicial stamp paper. This led to multiple stamp paper scams and marked the birth of the franking process. If you are wondering, what is franking charges and why you must approach a franking centre or bank to take forward the document legalization process, then you have arrived at the right place, where we are about to explain things in detail.

Franking of Documents:

Franking is said to be a process that involves getting documents stamped from a recognized banking organization. People widely call it as franking of documents, as the whole process includes stamping or marking the documents to let it turn legal and to indicate the fact that the documents have been paid with stamp dutycharge that usually gets levied on them as well.

To acquire franking services, you need to approach a bank that offers such services in the first place. Prepare the required documents beforehand approaching the bank. After the stamp duty has been paid, the franking centre shall mark up the documents to let others get to know that the stamp duty has been vitally paid. Later on, these documents must be signed after completing the franking process.

Difference between Stamp Duty and Franking Charges:

Franking and stamping are two terminologies that are widely misunderstood by people and need to be addressed in the right ways to know what they mean in the first instance. If you are not able to find a difference between stamping and franking, keep reading as we uncover every other fact and difference between them in a readable way.

Differences in terms of Charging Nature:

The stamp duty is the tax that you need to pay in favor of the Indian Government to legalize the needed documents to complete the processof purchasing a home, land or commercial property. Contrary to this, the franking process involves paying the stamp duty at first, and then it must be passed over to a reliable franking services provider in Mumbai or as per the city that you are about to validate documents and get a paid stamp duty confirmation in return.

How stamp duty charges are calculated?

Stamp duty is usually calculated keeping the total cost of the home or property in mind. It shall vary from three to ten percent depending upon the exact location of the property, your age, gender, type of property and other factors. The stamp duty within Mumbai is calculated as three to five percent of the total property value. For example, if you are a woman and looking forward to acquiring stamp duty, then you shall pay 0.01% less as stamp duty value in most states of India. Confirm the stamp duty values before starting with the whole process.

How franking charges are calculated?

On the other hand,franking charges for a home loan shall range anywhere from 0.1% to 0.2%. The percentage value does vary across the states of India. To say in an example, people who are about to take a home loan that is worth about Rs.1.5 crore in the state of Karnataka, then the franking charges shall be calculated as 0.2% of the overall home loan value, which is 30,000 Indian Rupees.

Where do you need to pay stamp duty charges?

Stamp duty is usually paid during the time of registration at the Sub-Registrar office that lies within the jurisdiction of the property or land that you are about to buy. Being a buyer of a property, the stamp duty charges do fall upon you. Neglecting to pay stamp duty shall bring in a penalty. Ensure to arrange funds according to the stamp duty values before signing off the agreement.

Where do you need to pay franking charges?

Coming back to franking services, only the banks or the authorized agents who tend to have a valid accreditation provided by the Indian Government shall add up the franking stamps to the home or property loan agreement. This type of service shall be offered only for a few hours a day. Make use of keywords like ‘franking near me’ in search engine platforms like Google or Bing to find a reliable banking service provider whom you can conveniently visit from your current living place. Their team of experts shall arrange every other formality that must be completed upon your visit in-person to acquire franking services from them.

Important facts about franking charges:

  • Agents and banks franking the documents shall charge a nominal fee for providing such services. In states like Karnataka and Maharashtra, banking organizations do acquire a service fee calculated at 0.1 percent of the entire property sale value or the about to be acquired loan amount.
  • Franking in Mumbai banksmight differ in terms of charges from one another. Visit the nearest bank in person, get to know about their franking charges and then start with the process.
  • Some banks may request you to pay the charges to acquire franking services in cash. Always get to know about the available payment methods so that you can conveniently pay after visiting the bank.

Real day advantages of franking documents when compared to stamp papers:

  • Paying the stamp duty charges shall be a difficult process, and you need to ensure the process is done rightly; else you might end up paying it more in the name of the penalty. Franking can be easily done if at all you are about to pay for it in the form of demand draft or cash.
  • Calculating the actual stamp duty charges shall be a difficult process. You might end up paying less or more if at all the multiplication methods were done based upon a fake online stamp duty calculator. If you are about to avail home loan from a bank, then you can relax, as the bank shall host a team of experienced agents who shall help in completing the entire franking process at ease.
Samar Javed

I am Samar Javed working with AddressOfChoice Realty Private Limited as a Digital Marketing Executive. I have 4 Year Experience in same field. I love to share informative blog.