The All-In Cost of a Bank Auction Property in Karnataka and Telangana

What sits outside the bid, and why it is your own money

A SARFAESI sale is priced as a single figure — the sale price you bid. Everything needed to make the property usable in your name is paid separately: duty and fees to the State, tax mechanics to the Centre, dues to the municipality and utilities, and fees to the platform and your advisers.

Under RBI’s housing-finance rules for banks, stamp duty, registration and other documentation charges are not to be included in the cost of the property when the loan-to-value limit is worked out; only for a unit costing up to ₹10 lakh may a bank add them. In practice, every cost line in this guide is paid from your own money, in addition to the 25% deposit (including the EMD) that Rule 9(3) requires by the next working day after the win.

The balance can come partly from a home loan, but the loan is limited by your eligibility and by RBI’s loan-to-value caps, and a lender can sanction it only after you win, once it has reviewed and valued the property. Before the bid, Kenstone Credit — Auction Dunia’s group credit desk, disclosed as such — assesses eligibility on your income and credit profile; the eligibility letter is indicative and you can take it to any lender. Our fifteen-day money calendar sets out when each payment falls after the win.

Karnataka: stamp duty, additional duty, surcharge and registration

The Department of Stamps and Registration lists a conveyance, including a flat or apartment, at 5% on the market value plus surcharge and additional duty, with a registration fee of 2%. “Market value” is defined as the price the property would fetch in the open market or the consideration stated, whichever is higher (Karnataka Stamp Act, 1957 s.2(1)(mm)); in practice, the guidance value or the price, whichever is higher.

• Additional duty: 10% of the stamp duty (Karnataka Stamp Act s.3B) — 0.5% of value at the 5% rate.
• Surcharge: charged on the duty and varying by area; 2% of the duty in city corporation areas, as recorded by the CAG’s audits of the department — about 0.1% of value.
• Registration fee: 2% of value, doubled from 1% with effect from 31 August 2025 (Notification No. RD/46/MNMU/2025, 29 August 2025, under Registration Act s.78).

Lower percentages that circulate online do not appear in the department’s current table for conveyances. Guidance values are revised from time to time, so check the property’s current guidance value on Kaveri 2.0 before you bid.

Telangana: stamp duty, transfer duty, registration fee and market value

The Registration and Stamps Department’s ready reckoner sets a sale deed outside gram panchayat areas at 5.5% stamp duty, 1.5% transfer duty and 0.5% registration fee — 7.5% in total. In gram panchayat areas it is 5.5% stamp duty, no transfer duty and a 2% registration fee. Both are charged on the market value or the consideration, whichever is higher.

Some bank and lender pages still show an older 6% total; it is out of date. Market values were revised across the State with effect from 5 June 2026, as reported, with the percentage rates unchanged — so for many properties the base on which duty is charged has gone up. Check the current market value for the property on the IGRS portal.

The sale certificate: when stamp duty arises

A certificate of sale granted to a buyer at a public auction by an officer is exempt from compulsory registration (Registration Act s.17(2)(xii)). The officer sends a copy to the sub-registrar, who files it in Book 1 (s.89(4)). The Supreme Court has held that this filing is sufficient, and that stamp duty arises only when the buyer presents the original for registration or uses it for some other purpose (Esjaypee Impex v. Canara Bank, Supreme Court, 2021; Inspector General of Registration v. G. Madhurambal, Supreme Court, 2022; State of Punjab v. Ferrous Alloy Forgings, Supreme Court, 2024).

That is not the same as “no stamp duty”. Lenders creating a mortgage, municipal desks changing the Khata or tax record, and a future buyer’s lawyer commonly ask for a registered document, and the moment you present the certificate, duty is payable. Karnataka charges a certificate of sale the same duty as a conveyance on a market value equal to the purchase money (Karnataka Stamp Act, Schedule, Article 15). Telangana’s ready reckoner lists a certificate of sale at 5% stamp duty and 0.5% registration fee on the purchase money. Budget for it from the start; the steps belong to the after-the-win guides.

TDS: 1% of the price, deducted rather than added

From 1 April 2026 the Income-tax Act, 2025 applies. Where the consideration for immovable property (other than agricultural land), or its stamp-duty value, is ₹50 lakh or more, the buyer deducts 1% of the consideration or the stamp-duty value, whichever is higher (s.393(1), Table Sl. No. 3(i), formerly s.194-IA). The tax is deposited with Form 141, Schedule B, which replaced Form 26QB, within 30 days from the end of the month of deduction, from the buyer’s own PAN login; no TAN is needed.

Bank sale notices commonly tell the buyer to deduct this TDS. The bank sells as secured creditor, not as owner, so which person is shown as the seller on the form, and how the 1% is split between the 25% and the balance, are points to confirm in writing with the Authorised Officer and with your tax adviser before you pay. Keep the challan; the bank will ask for it. If the owner is a non-resident, a different entry and higher rates apply (s.393(2)). Our TDS guide covers the form, joint buyers and owners abroad in detail.

Buying below the stamp-duty value: a tax risk to price in

Where any person — an individual, a firm or a company — receives immovable property for less than its stamp-duty value, and the gap is more than the higher of ₹50,000 and 10% of the price, the gap can be taxed as income from other sources (Income-tax Act, 2025 s.92(2)(m); formerly s.56(2)(x) of the 1961 Act). Auction prices can sit below government values, so this matters.

Tribunal orders have gone both ways. In one, the Mumbai bench accepted the price reached at a supervised public auction — a liquidator’s e-tender, not a SARFAESI sale — as the fair value and deleted the addition (ITO v. Mahavir Enterprises, ITAT Mumbai, 2023). In another, where the property was bought while the seller faced bank recovery proceedings, the bench sent the valuation back to the Department’s Valuation Officer instead (ITA No. 4770/Mum/2025, ITAT Mumbai, 2025). Neither order decides a SARFAESI auction. Treat it as an open risk and discuss it with a tax adviser before the bid; our guide to buying below guidance value goes through the rule and the cases.

GST, inherited dues and transfer fees

• GST: the sale of a completed building is neither a supply of goods nor of services (CGST Act, 2017, Schedule III, para 5), so a completed property attracts no GST. The services around the purchase — platform fees, legal and valuation work — do.
• Dues: sale notices usually put property tax, electricity, water and association dues on the buyer, and the Supreme Court has held that “as is where is” puts bidders on notice of such dues (K.C. Ninan v. Kerala State Electricity Board, Supreme Court, 2023). Get the arrears figures before the EMD and count them as cost.
• Hyderabad mutation fee: 0.1% of the registered document value, collected by the sub-registrar at registration, for Greater Hyderabad (G.O.Ms.No.155, MA&UD, 2016, as corrected by G.O.Ms.No.192). If the property falls in the Cyberabad or Malkajgiri corporation, confirm the current fee with that corporation.
• Bengaluru e-Khata transfer and utility name changes: fees apply, but no current official schedule could be confirmed for this guide; ask the GBA ward office, BESCOM and BWSSB (or TGSPDCL and HMWSSB) for the figure.

The cost lines at a glance, with a worked example

Questions buyers ask

Sources

Statutes, rules and judgments first. Checked as of 17 October 2026; the law and portal practice change, so confirm against the source before relying on a detail.

1. Official portalDepartment of Stamps and Registration, Karnataka — Stamp duty and registration fees
2. RegulatorGovernment of Karnataka — Notification No. RD/46/MNMU/2025 (registration fee 2% from 31 Aug 2025)
3. StatuteKarnataka Stamp Act, 1957 — s.2(1)(mm), s.3B, Schedule Article 15
4. Official portalRegistration and Stamps Department, Telangana — Ready reckoner (stamp duty, transfer duty, registration fee)
5. Official portalIncome Tax Department — Form 141, challan-cum-statement under s.393(1)
6. StatuteIncome-tax Act, 2025 — s.92(2)
7. JudgmentInspector General of Registration v. G. Madhurambal, Supreme Court, order of 11 Nov 2022
8. JudgmentITO v. Mahavir Enterprises, ITAT Mumbai, ITA 1304/Mum/2023, 27 Jul 2023
9. RegulatorGovernment of Telangana — G.O.Ms.No.192 (MA&UD), errata on GHMC mutation fee
10. SecondarySCC Online — State of Punjab v. Ferrous Alloy Forgings, Supreme Court, 2024 (report)