Tax exemptions for house registration charges under sec 80c

Dear Hari, The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house. Accordingly, you can claim the deduction u/s. 80C.

Dear Hari, The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house. Accordingly, you can claim the deduction u/s. 80C.

Dear Hari ya you can claim the deduction u/s. 80C.

Agreed with saleem

1. As you mentioned stamp duty, registration charges and other expenses which are directly connected for acquiring the house property can be claimed as exemption under section 80c in the year of actual registration. 2 and 3. Though "other expenses" were not defined under the IT act, it can be construed that the expenses which are to be paid compulsorily to the government under various statute and the payment of which cannot be avoided by the buyer otherwise. In my understanding, construction agreement charges and mortgage deed charges cannot be claimed as exemption as the liability arose as a consequence of mutual arrangement/agreement. However, in my opinion service tax and vat paid to the builder can be claimed as "other expenses". I need more comments on this...

It is eligible for exemption U/s 80C

If in case those expenses which are essential for acquisition or purchase of property can be taken as deduction construction agreement charges and mortgage deed charges can very well be claimed as without paying these charges the acquisition and ownership of property cannot be confirmed.

Thank you for all your replies. I have one more question. Can principal repayment amount be claimed under Section 80C even when the house is under construction.

Enter comment here

Yes, it is eligible for deduction U/s 80C. But, you have to finish the construction within 3 years of taking the loan.

No... it cannot be claimed till you complete and possess the house.

Is that clause mentioned in the IT act under Section 80C that only after possession of the house principal amount repayment can be claimed? Can you clarify.

It looks like Section 80C doesn't have this condition mentioned for principal repayment. Can someone provide correct information on this.

Regards,
Hariharan.

Dear Hariharan,

 

For your information –

Often it is seen that housing loan is taken but the possession of the property is received in the next or later financial year. It may be because the property is not completed or constructed. Tax benefits of housing loan can still be enjoyed but there are certain restrictions to it.

Principal: Till the house is not constructed and the possession is not taken over, deduction on house loan principal repayment is not allowable. You need to have possession and certificate of ownership to claim tax under section 80C. In simple words it is said that you should be the owner of the house property. After the possession is received, the deduction can be claimed normally up to a maximum of Rs. 1.5 Lakhs under section 80C.

Interest: The interest deduction u/s 24(b) can be claimed after the possession of the house property is taken over. However, the total amount of interest paid on home loan prior to possession of house property as can be claimed as pre-construction interest in 5 equal installments for next 5 years from the financial year in which possession is received. The pre-construction interest is allowed upto a limit of Rs 2 Lakhs including the current year interest payment on home loan. This can be claimed only after the house is ready and possession is taken over. If the house has been let out, the taxpayer can claim the entire interest component as deduction from the rental income without any restriction.