How to claim stamp duty paid while purchasing property?
Claim Stamp Duty Paid On Sale Of A Property
If you have ever purchased property, you must have paid stamp duty. It is a type of tax that the state government levy on sale of a property. As stamp duty charges are significant and vary from 6 to 8 percent depending on region and state, it significantly increases the property's cost.
For example, if you live in Noida, where stamp duty is 7 percent, you must pay 3.5 lacs as tax if you purchase a property worth 50 lakhs. It significantly increases the cost of the property.
Due to this significant tax payable, buyers always wonder if there is any way to claim it or get an exemption. However, there are ways, but not so easy, so read this article further to know how to claim paid stamp duty.
Can I claim stamp duty and registration charge ?
Yes, you can claim stamp duty and registration charges paid while buying property under section 80C of the Stamp Duty Act 1961 up to a maximum of 1.5 lacs. If co-owners are in the property, they are all eligible to get this deduction benefit.
Which documents are required to claim tax exemption of stamp duty and registration fees under 80C?
Collect all necessary documents, including proof of property purchase, stamp duty payment receipts, and any relevant exemption certificates. Accurate documentation is crucial for a successful claim. These are some essential documents you should keep ready before you claim for stamp duty paid on the property:
• Receipts for the stamp duty and registration charges paid.
• The original property deed or sale deed.
• A certificate confirming the completion of the property construction.
• Proof that you have taken legal possession of the property.
• The ITR form where you claim the deduction under Section 80C.
What are the conditions to claim stamp duty and registration charges?
1. First, you must be the owner, co-owner, or member of a Hindu Undivided Family (HUF) that has bought the property. The deduction is only available to individuals or certain family members, not to companies or other types of organisations.
2. Next, you must claim the deduction in the same financial year when you pay the stamp duty. If you pay the stamp duty in April 2021, you can only claim the deduction for the financial year 2021-2022. You can't claim it for a year in which you haven't paid the stamp duty yet or for a payment made in a previous year.
3. If you're buying an under-construction property, you can only claim the deduction once you take possession of the property. This means you must move into or receive the property before you can use the deduction.
4. Also, the stamp duty deduction is only available for residential properties. You can't claim it for commercial properties, plots of land, or any property not used for living. It's also unavailable if you buy a resale property, meaning a property that someone else already owned. You can only claim the deduction for a "fresh occupancy," which means a brand-new property you are moving into.
5. Finally, if you sell the property within five years of buying it, you will lose the stamp duty deduction. The tax benefit will be reversed, and you must repay the amount you claimed earlier. So, keeping the property for at least five years is essential to keep the tax benefits.
Is TDS deducted on stamp duty?
No, TDS is not deducted on stamp duty but on the purchase or sale of the property.
Conclusion
You can claim stamp duty paid on property, but only upto 1.5 lacs in the same financial year when stamp duty was paid. Also, HUF and some individuals are allowed for the exemption; companies and organisations are not eligible.
.webp)
.webp)
.webp)
