Tax benefits you can avail on stamp duty and registration charges

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Stamp duty and registration fees add a considerable amount to the cost of purchasing a home. In India, stamp duty is between 4 and 10% of the property’s value, with registration fees of one percent. Buying a home is an expensive procedure, and because banks usually issue home loans for just 80% of the property’s value, purchasers are forced to come up with this additional cash on their own.

Note that despite the several RBI orders requiring financial institutions in India to include stamp duty and registration fees when estimating the total cost of a property, little has changed in the industry’s practice.

The Indian tax laws provide some aid to homebuyers by allowing them to deduct stamp duty, registration fees, and similar expenses they pay while purchasing a property. Let’s take a look:

Here’s what homebuyers should know

Section 80C of the Income Tax Act, 1961 allows for a deduction for stamp duty and registration fees paid when purchasing the property. It is important to know that the annual deduction maximum under Section 80C is Rs 1.50 lakh, which offers a rebate against many different types of investments such as pension funds (PPF), personal pension funds (PPF), life insurance, and home loan principle.

As a result, homebuyers can get a tax break under Section 80C on all of their expenses, not just their mortgage principal. This is only for a one-year limit of Rs 1,50,000.

Who is eligible to receive these advantages?

Individuals and Hindu Undivided Families (HUFs) can take advantage of Section 80C’s rebate on stamp duty and registration fees when purchasing real estate.

What are the requirements for claiming Section 80C tax benefits on stamp duty and registration fees?

Section 80C allows buyers to deduct stamp duty and registration fees from their taxable income. These are a few examples:

– A HUF or a single individual is required.

Only once may you use this: Furthermore, this is a one-time deal. This deduction is only available to the taxpayer in the year in which the payment was made.

-The deduction is only applicable to home purchases and construction. In other words, the stamp duty you paid on the plot or land acquisition isn’t deductible.

-Co-owners can claim deductions when filing their individual income tax returns for a co-owned property. Section 80C of the Income Tax Act imposes a maximum of Rs 1.50 lakh on each of them.