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Stamp duty paid for residential property

Prashant Balkrishna Thanekar (Accounts Manager) (181 Points)

12 January 2018

Dear sir/madam

I have paid Stamp duty for purchases of Residential flat. Is stamp duty paid is allowable for income tax deduction

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12 Replies

Arun (student ) (112 Points)
Replied 12 January 2018

Stamp Duty is not allowed as deduction in income tax act. however it is added to purchase price.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 12 January 2018

Stamp Duty and Registration Charges are covered under Section 80C, thus falls in the threshold limit of Rs.1.5 lakhs. Maximum amount of deduction of Stamp Duty and Registration Charges paid is restricted to Rs.1.5 lakhs.

For claiming deduction, you must possess the house i.e. Payment for under-construction is not allowed. In simple words both payment of expenses and possession of the house must be in the same fiscal year for claiming expenses.

Deductions can only be claim, if expenses are for new residential house property for self and not for a resold property. Payment for commercial property is also not eligible for deduction under this section

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Arun (student ) (112 Points)
Replied 12 January 2018

@ Dhirajlal Sir
are u damn sure that we can claim stamp duty and registration charge? with my limited understanding I learnt only repayment of housing loan is deductible u/s 80C. if u are sure pls let me know.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 12 January 2018

The deduction for stamp duty is governed by section 80C (2)(xviii)(d) of the Income tax Act,1961.

Read the extract......

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—

(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

(1) the Central Government or any State Government, or

(2) any bank, including a co-operative bank, or

(3) the Life Insurance Corporation, or

(4) the National Housing Bank, or

(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or

(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or

(7) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

(8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or

(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,

but shall not include any payment towards or by way of—

(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

For more details refer : bareacts/income-tax-act/section80C-income-tax

&/or deduction-allowed-stamp-duty-registration-charges