ITR Filing: How Much Deduction Can You Get for Stamp Duty and Property Registration?

Have you purchased a property in Financial Year 2022-23? If then, you can surely claim deductions to reduce your taxable income, with ITR filing, for stamp duty and registration fee that you paid during the process, for the AY 2023-2024.

ITR Filing 2023

How Much Tax Deduction Can You Get With ITR Filing?

A taxpayer can claim a maximum of up to ₹1.5 lakh towards the payment he or she has made for stamp duty and registration fee of the property, under Section 80C of the Income Tax.

“Section 80C (xviii)(d) of the Income Tax Act, 1961 permits a taxpayer being an individual or member of a HUF to claim a deduction for the stamp duty, registration fee and other expenses incurred in connection of purchase or transfer of any house property. The maximum quantum of such deduction (along with other deductions u/s 80C) would be restricted to Rs. 1,50,000,” Dr Suresh Surana, RSM India founder, was quoted saying by financial express.

Remember, if you are planning to claim the deductions for the stamp duty and registration then it must be a residential property. This facility does not apply to commercial properties.

“It is pertinent to note that the property for which the stamp duty has been paid is a residential property and not in the nature of the commercial property,” said Dr Surana further, mentioned by Financial Express.

Lock-In Period for Property

If you claim deductions for stamp duty and registration fee through ITR filing for your residential property then as per the law you cannot sell it for at least 5 years.
“The taxpayer would be subjected to a lock-in period of 5 years i.e. such house property in regards to which the stamp duty has been claimed could not be sold for 5 years,” further said Dr Surana.

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How does this System Work?

Let’s assume you have purchased a residential property and spent ₹5 Lakhs for stamp duty and registration. Now, with the ITR filing of AY 2023-24, you can claim the deductions up to ₹1.5 lacks and not for the remaining ₹3.5 lahks.

“Further, the Rs 1.5 lakh limit would be subject to the condition that you have not already exhausted the Section 80C limit through other tax-saving instruments like EPF, PPF, SCSS, Life Insurance Policy, ELSS etc.”, mentioned financial express.

“If you have already exhausted the Rs 1.5 lakh limit of Section 80C through other schemes, you cannot claim an additional deduction against stamp duty or registration fee paid in the last financial year. However, if you have not made any or less than Rs 1.5 lakh tax-saving investments, you can claim a deduction up to the full limit,” further wrote.

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Rishabh Sharma

Rishabh is an experienced content writer and editor, he is working for Viralbake to cover a diversified range of categories. His articles mainly focus on providing information, being a travel guide, educating others, and also making people aware of technology, after all, he is a technophile. When not writing he can be found gaming, watching movies, and travelling.

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