How to Claim Stamp Duty Exemption on Property (2024)

Looking for tax benefits on your property? Did you know that stamp duty is tax-deductible under Section 80C of the Income Tax Act, 1961? Stamp duty can go as high as 8% on your property value. Hence, a stamp duty rebate in income tax can be a huge sigh of relief. The exemption from stamp duty can be availed if it is paid in the same financial year.

Conditions for Income Tax exemption on stamp duty

Stamp duty is paid for the registration of residentialproperties. This tax is imposed on the transfer of ownership in real estate. Theexemption can be availed by the assessee up to a limit of Rs. 1.50 lakhs.However, you cannot avail an income tax exemption on stamp duty on land purchase.

To be eligible for a stamp duty rebate, the assessee must be anindividual owner, a co-owner or a member of a Hindu Undivided Family that haspurchased a residential property. In case of joint ownership, the tax rebatecan be availed by the co-owners up to Rs. 1.5 lakhs each.

Stamp duty payment

The stamp duty and registration charges have to be paid by the assessee. No stamp duty rebate in income tax will be provided if the stamp papers are on another person’s name. You can calculate stamp duty using our stamp duty calculator.

AdditionalRead: What is a Stamp Duty? How to Calculate Stamp Duty Online?

Possession

Theassessee must be in legal possession of the property for which the tax rebateis claimed.

Fresh occupancy

Noincome tax rebatecan be claimed on properties which have been already occupied by the assessee,wholly or partially. It is vital that the property is new and had not been usedpreviously by the beneficiary. The tax deductions can be claimed for a newresidential house property and not for a resale property.

Type and use of property

The tax benefit can be availed only on residential propertiesand not on commercial properties. Additionally, the income tax exemption is notapplicable. The benefit is only for housing properties.

Relevant year

Make sure that the claimedincome tax deductionsare forthe expense paid in the same fiscal year. For example, if you pay Rs. 3 lakhsas stamp duty in August 2019, you have to claim for deduction in the IT Returnfiling of 2019-20. In this case, you will get an exemption of Rs. 1.5 lakhs.

Looking for more tax deductions? Claim deductions for moreexpenses incurred on your property. Furthermore, under Section 80EEA, you canget income tax benefits on interest payments of home loans up to a deductiblelimit of Rs. 1.5 lakhs.

Additional Read: Everything You Need to Know About Home Loan Tax Benefit

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