Yes. According to Section 80C of the Income Tax Act 1961, expenses related to stamp duties and registration charges directly related to the transfer are eligible for a tax deduction. The maximum deduction limit is ₹1,50,000.
Individuals and HUFs are eligible to claim deduction under the following circumstances -
- You can claim tax deduction during the year the actual payment of these expenses is made.
- The property construction is complete, and you are the legal owner of the respective property.
- Commercial property, residential plot and resale property are not eligible for a tax deduction. Only new residential property qualifies for exemption.
- Co-owners in joint ownership can claim a tax deduction on their tax returns. The deduction is based on their share in a property. The maximum deduction limit remains at ₹1,50,000. However, if a taxpayer possesses complete or partial property ownership, he/she cannot claim this tax exemption.
- If there is a property transfer within 5 years of purchase, you are liable to pay the tax in the assessment year when you transferred this property.
The property registration in Mumbai increased to 270%. There was a registration of approximately 1.13 lakh properties between September 2020 and July 2021 in Greater Mumbai. The main reason behind it is the reduction in stamp duty in Mumbai.
So, whether you are a real estate developer or a homebuyer, it is a viable opportunity. Before moving ahead, make sure to check stamp duty rates in Mumbai and calculation procedures to avoid any last-minute inconvenience.