How to Claim Tax Exemption on Stamp Duty and Registration Charges u/s 80C

Updated on 22 Jan 2020.

You have to pay Stamp Duty and Registration Charges while buying a house. You pay stamp duty charges to government to get the property registered in your name. Since stamp duty can be as high as 8% of the property value (varies from state to state), it adds up to around 8% to 10% of your house purchase cost.

Government in-return has given you the exemption on the stamp duty and registration charges paid (to be deducted from your total annual income) under section 80(C) of Income-tax Act, 1961.

Stamp Duty and Registration Charges Deduction Conditions

You can get tax exemption on Stamp Duty and Registration Charges up to Rs.1.5 lakhs. Any amount paid over and above this limit is not eligible for the deduction. Along with that, you can apply only in the year the actual payment is made.

For example, If you bought a house in october 2019 and paid Rs. 2 lakh as stamp duty charges. Now you will get exemption on your expense of Rs. 1,50,000 out of actual amount of Rs. 2,00,000 and you will have to take exemption in the Income-tax return filing of 2019-20. You can’t get exemption in the next years.

Read: How to Maximize Tax Savings on Salary Income

Other important conditions for claiming Stamp Duty and Registration Charges deductions

1. Only Individuals and HUF assesses can claim tax deductions on Stamp Duty and Registration Charges paid.

2. The house should be in the name of the assessee and he must have paid these  Stamp Duty and Registration Charges himself. No deduction if the expenses are paid by any other person.

3. You must possess the house also to claim the deduction.  In simple words, both payment of expenses and possession of the house must be in the same fiscal year to claim expenses.

4. You can claim tax deductions 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.

6. A joint owner can individually claim a deduction based on their share in the property up to Rs.1.5 lakhs each.

7. No expenses can be claimed if assessee has already occupied the house property either wholly or partially. The house property should be new and had not been in use for the assessee?s own residence.

8. You can claim a tax deduction against Stamp Duty and Registration Charges paid for a residential house only. Any expenses for paid residential plot does not qualify for tax deduction under Section 80C.

9. You can also claim for any other expenses paid for the purpose of transfer of property such as service tax paid can also be claimed as deduction under section 80C.

Remember –

If you are the owner of house and you have yourself paid the stamp duty & registration charges, then do not forget to claim the expenses while filing the Income-tax return of the relevant financial year. Because its a one-time benefit that you shouldn’t miss at any cost.

Let me know your experience in the comments.


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