Exemption for registration and stamp duty on under construction property

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  1. JatinS

    JatinS New Member


    Need help on tax exemption for registration and stamp duty on under construction property owned jointly.

    We bought the property in September 2014 and made registration and stamp duty in Dec 2014. So per my understanding, co-owners can claim these expenses in their respective income tax returns based on their share in the property. However, the maximum limit of Rs 1,50,000 available under section 80C shall apply. So for example, if Rs 3,00,000 spend on registration and stamp duty can be equally bifurcated between both of us.

    Please correct me if my understanding is wrong.
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    Dear Jatin

    Your understanding of the deduction allowed is 100% correct.

    Rs. 3,00,000 would be equally bifurcated among the co-owners and they would be allowed to claim deduction under Section 80C subject to a maximum limit of Rs. 1,50,000
  3. JatinS

    JatinS New Member

    Thank for your reply Gaurav.

    However I forgot to convey that my property is still under construction. So, is it true that I can claim the deduction only when I have a possession of the property in the same year. And if that is true then does that mean I will not be able to claim this deduction at all. I have read mixed review so not sure on this part.

    Also, as we are joint owners and wife is primary applicant, how does we exactly bifurcate all these fees, interest and principal paid while we apply for deduction. Can we bifurcate at our own ease or their is any rules to evaluate the same.

    Awaiting reply. Thanks
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    The principal repaid during the pre-construction period cannot be claimed as a deduction.

    The interest accrued during the pre-construction period can be claimed as a deduction in 5 equal installments after the construction is completed.
  5. gaurav_kumar

    gaurav_kumar Well-Known Member

    As you are joint owners, you should ideally claim the deduction in the same ratio i.e. 50:50

    However, in case you are repaying more part of the loan - you can claim it in the ratio of loan repaid as well.

    But, dont keep changing the ratio every year. Decide it at once, and then claim deduction in the same ratio in future as well.
  6. JatinS

    JatinS New Member

    Hi Gaurav,

    And what abt stam duty and Registration can claim it in 2014-15 as property is under construction still.
  7. rudrabose

    rudrabose Active Member

    Yes, you can claim deduction for payment of Stamp Duty and Registration Charges in the year of payment for under-construction property
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