Tax Benefit for Home Buyers on Stamp Duty, Registration Charges

Are you a home buyer looking to invest in a house in 2015? Expect generous tax benefits if you do.

Home buyers can claim tax breaks upto Rs 1.5 lakh on stamp duty and registration charges on purchase or construction of a house under section 80C of the Income Tax Act, 1961.

These deductions however are only available for new property purchases or on newly constructed houses. Also, the deductions can be claimed only once and that too in the financial year in which stamp duty and registration charges were paid. For instance, if you have bought a house and paid stamp duty and registration charges in September 2014, then you can claim tax benefit for the same in the financial year 2014-2015 only. Expenses for earlier years cannot be claimed.

In case you have a joint ownership over your home, you can claim deductions as per your share in the said property while keeping the cap of Rs 1.5 lakh in mind.

Important Points to Note:

• These deductions are available only on new constructions and new property purchases and not on resale properties
• Only individuals and HUF (Hindu Undivided Family) applicants can claim these  tax benefits
• The said house should be in your name and all expenses towards stamp duty and registration charges should be borne in your name only. No deductions if these expenses were borne by any other person
• You cannot claim deduction for under-construction properties
• Tax breaks can be claimed only in the year of actual payment made towards stamp duty and registration. Claim for previous years is not allowed.
• Commercial properties are not eligible for these claims. These tax incentives are only offered for residential properties.
• Other conditions that qualify for Section 80C deductions include Life insurance premiums, Provident Fund and Five year term deposits.  While claiming for stamp duty and registration tax benefits, keep these options and the Rs 1.5 lakh cap in mind.

To know about tax benefits on property purchases, keep coming back to www.proptiger.com