ITR Filing FY 2023-24: Deductions On Stamp Duty And Property Registration

The deadline for filing the Income Tax Return ( ITR) for the Financial Year 2023-24 is July 31. Failure to submit submit ITR before the last date will result in late fees. While filing tax returns, the citizen must be aware of the deductions which are offered under section 80C of the Income Tax Act. It permits certain investments and expenses to be tax-exempted.

Investing in real estate is one form of availing the deductions under this act. As per the provisions of the Income Tax Act, the taxpayers are entitled to tax exemption on the stamp duty or registration fee paid for registration of property. Under Section 80C of the Income Tax Act, a maximum deduction of Rs 1.5 lakh can be availed on payment of stamp duty, registration fee etc.

The benefit of tax exemption on expenses incurred on the purchase or transfer of property like stamp duty and registration fees can be availed only on residential property and not on commercial property. Hence, you can avail of a deduction only if you buy or own a residential property in the ongoing financial year of ITR. Under-construction properties are not eligible for stamp duty tax benefits.

The tax exemption on stamp duty can be claimed by individual owners, co-owners or undivided families. In the case of joint ownership, the exemption is given to the co-owners according to their share. However, to receive the benefit of the same, the property must be registered in the name of all the owners followed by the payment of stamp duty. It should also be noted that you can claim exemption only on the stamp duty paid in the ongoing financial year for which the ITR is being filed. It will not be available for the house purchased in the previous financial year.

The property for the purchase for which tax exemption on stamp duty has been availed, cannot be sold for five years. If someone sells the property before this period, the ITR of the year for which the exemption was availed will get revised and the stamp duty deducted will be taxed.

The taxpayer should also be careful of the maximum limit of deduction under section 80C of the Income Tax Act. You must not have crossed the deduction limit before availing of the tax exemption for Stamp Duty. Meaning: If you have already availed of the exemption up to Rs 1.5 lakh on investments in EPF, PPF, SCSS, Life Insurance Policy, ELSS etc, then you cannot claim tax exemption on stamp duty.