Tax benefit on Stamp Duty & Registration Charges of a Property

If you have purchased or constructed a house property you might be wondering about stamp duty exemption. Stamp duty & registration charges and other expenses which are directly related to the transfer are allowed as a deduction under Section 80C. The maximum deduction amount allowed under this section is capped at Rs.1,50,000.

When can you claim this deduction?

This deduction can only be claimed in the year the actual payment is made towards these expenses. If you buy the property on 30th August 2016 and pay its stamp duty and registration charge, you can claim these expenses under section 80C only in FY 2016-17. Both an individual and a HUF can claim this deduction in their income tax return.

What expenses cannot be claimed as a deduction?

• admission fees, cost of share and initial deposit which a companies shareholder or co-operative societies member has to pay to become a shareholder or member
• cost of addition, alteration, renovation done after getting a certificate of completion or after the house has been occupied by buyer or let-out.

Joint Owners

If you have purchased the property jointly, the co-owners can claim these expenses in their respective income tax returns based on their share in the property. However, the maximum limit of Rs. 1,50,000 available under section 80C shall apply.