Section 80C (xviii)(d) of the Income Tax Act, 1961 permits a taxpayer being an individual or member of a HUF to claim a deduction for the stamp duty, registration fee etc.
If you purchased a property in FY 2022-23 and paid for stamp duty, registration fee etc, you can claim some deduction under Section 80 C while filing the Income Tax Return for AY 2023-24. Read on to know what the rules say and how much tax deduction you can claim.
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How much tax deduction can be claimed?
A maximum deduction of Rs 1.5 lakh on payments towards stamp duty, registration fee etc. is allowed under Section 80C of the Income Tax.
“Section 80C (xviii)(d) of the Income Tax Act, 1961 permits a taxpayer being an individual or member of a HUF to claim a deduction for the stamp duty, registration fee and other expenses incurred in connection of purchase or transfer any house property. The maximum quantum of such deduction (along with other deductions u/s 80C) would be restricted to Rs. 1,50,000,” says Dr Suresh Surana Founder of RSM India.
If you are planning to claim a deduction this year then the property for which stamp duty has been paid must be a residential property. This facility is not available for commercial properties.
“It is pertinent to note that the property for which the stamp duty has been paid is a residential property and not in the nature of commercial property,” says Dr Surana.
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Lock-in period
There is also a compulsory lock-in period of 5 years when claiming a deduction for stamp duty, registration fee etc. This means, if you claim the deduction, you must not sell the house for 5 years.
“The taxpayer would be subjected to a lock-in period of 5 years i.e. such house property in regards to which the stamp duty has been claimed could not be sold for 5 years,” says Dr Surana.
How it works
Let’s understand this with an example. Suppose you have paid Rs 5 lakh as stamp duty, registration charges etc in FY 2022-23. While filing ITR for AY 2023-24, you can claim a deduction only up to Rs 1.5 lakh. No deduction can be claimed for the remaining Rs 3.5 lakh.
Further, the Rs 1.5 lakh limit would be subject to the condition that you have not already exhausted the Section 80C limit through other tax-saving instruments like EPF, PPF, SCSS, Life Insurance Policy, ELSS etc.
If you have already exhausted the Rs 1.5 lakh limit of Section 80C through other schemes, you cannot claim an additional deduction against stamp duty or registration fee paid in the last financial year. However, if you have not made any or less than Rs 1.5 lakh tax-saving investments, you can claim a deduction up to the full limit.
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Can you carry forward the balance?
Suppose you claim Rs 1.5 lakh deduction for the stamp duty or registration fee paid in the last FY, can you claim a deduction for the remaining Rs 3.5 lakh in the subsequent years?
Tax experts say you cannot carry forward any benefit of deduction to subsequent years.
“Maximum tax benefit for principal repayment on home loan, stamp duty and registration charges is restricted to Rs 1.5 lakh (the overall limit under section 80C). There is no provision to carry forward stamp duty cost and claim any balances in the following year,” says Archit Gupta, Founder and CEO of, Clear (formerly ClearTax).
Dr Surana also says that Section 80C of the IT Act does not allow to carry forward any benefit of deduction to subsequent years.
“Accordingly, the taxpayer can only claim an amount of Rs. 1.5 lakhs as deduction and the balance amount of Rs. 3.5 lakhs would lapse as no deduction u/s 80C can be claimed for the same in the relevant financial year or any subsequent year/s,” says Dr Surana.
