Hi Friends,

Me & my wife have bought a new home in May-2010 & the registration fees & stamp duty was paid in same month. The Possession will be in April-2011.
As per Income Tax Act you can get the deduction u/s 80C for registration fees & stamp duty in the year of payment i.e. for me it will be F.Y. 2010-11.
But I heard that there is a amendment in act & Possession should be also in the same year to claim the deduction for registration fees & stamp duty. Is this correct? If yes, can you pls guide me to proper circular/notification which states this? If I possession is compulsory for claiming stamp duty & registration fees, how same can be claimed subsequently

Thanks,
Datta
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  • Hi,

    You can claim SD/Reg deduction u/s 80C if the payment & posession is in same year. It can't be differed over the period of 5 yrs. It can be done only for interest component. Principal component of loan can't be differed over 5 yrs.
    To claim a deduction under 80C payment is required to made in the same year....

    :-Datta


    Originally Posted by am_pune
    Hi All,

    as per my knowledge, to take benefit of the SD/Reg the you should get the possession in the same financial year.
    Else you can claim 20% amount of SD/Reg under 80C. for the next 5 years.
    once you get possession.

    Hope this will help you !!!

    -
    CommentQuote
  • Some builder asks Stamp Duty and Registration charges as cash. Even builder won't issue cash receipt. Is it illegal or that is the practice ?
    They are arguing that they need to purchase Stamp paper etc and Agreement need to be prepared by Notary so they need cash only. Any suggestion will be helpful.
    CommentQuote
  • Well, I don't know abt the builders as I have purchased resale properties only. For that I used to handover cash to advocate and he purchased DD (stamp + registration) from his account. For my last transaction I have purchased DD myself as my advocate suggested it.

    So, if you don't trust your builder then inform him that you will hand over the DD (in favour of haveli no) to him.

    Thanks,
    Jigar
    CommentQuote
  • Originally Posted by jigarshah
    Well, I don't know abt the builders as I have purchased resale properties only. For that I used to handover cash to advocate and he purchased DD (stamp + registration) from his account. For my last transaction I have purchased DD myself as my advocate suggested it.

    So, if you don't trust your builder then inform him that you will hand over the DD (in favour of haveli no) to him.

    Thanks,
    Jigar

    Thanks for clarification jigar. As you suggested i had a talk with builder and he suggested to handover the sum to Advocate direclty and he will purchase the DD(stamp + registration), will do the franking and will setup the date with registration office, which looks fair enough.
    He told me that i will get all receipts like Stamp duty charge + Registration charges, but Advocate won't provide any receipt for his charges(which is around Rs4000).
    Now the issue is if Advocate make all the DD's then would i get the tax benefit OR i myself should provide all DD's of required values ?
    Pl suggest...
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  • DD and Transaction Fees will be on your name itself hence you can claim the expenses when u file for tax exemption.
    Advocate will only assit you in the registration process.
    CommentQuote
  • I see there are lot of confusions regarding documents, registration, Index-II etc. I would like to share my experience for benefit off all.
    (i) Some builders are asking cash for SD and registration. Some are asking for DD. No problem with both. Actually, if DD is used then for registration it should be in the name of sub-registrar. For SD it should be in favour of either Sub-postmaster (if franking is done at post office). One can himself take the UNSIGNED agreement and go to designated branches of HDFC, IDBI, ICICI banks or post office and get it franked by depositing required cash.
    (ii) Index -II is not given by builder but by the Sub-registrar's office and that forms a part of the agreement document. It is given as sson as agreement is done either for ready possession or undr construction flat.
    (iii) Photograph and thumb prints are must and they are taken care bu registrar's office.
    (iv) Normally builder gives 2 copies (one original and other xeroxed) to you. Original normally bank keeps for loan purpose. You are advised to make 3-4 more copies of this document for your own purpose and safety. I had gone one step ahead and kept the scanned copy of the agreement on my PC for safety.
    (v) Registration receipt for 30000/- shows other charges (scanning etc.) also. By mistake if the amount of SD is more and and franking isdone for less amount, don't worry. You can pay difference in cash at registrar's office and the amount will be shown as Extra SD charges on registration receipt.
    (vi) Please make sure that commencement certificate by the authorities and the certificate by advocate regarding title clearance form a part of agreement. It also includes the receipt of advance payment to builder.

    one more thing. Normally the agent of the builder at registrar's office charges 4-5k for services.

    I hope I could help a little to the members here.
    CommentQuote
  • Originally Posted by pnb_2k
    Thanks for clarification jigar. As you suggested i had a talk with builder and he suggested to handover the sum to Advocate direclty and he will purchase the DD(stamp + registration), will do the franking and will setup the date with registration office, which looks fair enough.
    He told me that i will get all receipts like Stamp duty charge + Registration charges, but Advocate won't provide any receipt for his charges(which is around Rs4000).
    Now the issue is if Advocate make all the DD's then would i get the tax benefit OR i myself should provide all DD's of required values ?
    Pl suggest...


    Hello,

    Yes, you sud be fine with this approach. You will find receipts in registration documents (pavti against your name). You just need index || for tax claim under 80C benefit.

    You won't get receipts from advocate as thr services are now under service tax provision. If you are fine with service tax then its ur choice. :)

    Thanks,
    Jigar
    CommentQuote
  • Originally Posted by Alok65
    I see there are lot of confusions regarding documents, registration, Index-II etc. I would like to share my experience for benefit off all.
    (i) Some builders are asking cash for SD and registration. Some are asking for DD. No problem with both. Actually, if DD is used then for registration it should be in the name of sub-registrar. For SD it should be in favour of either Sub-postmaster (if franking is done at post office). One can himself take the UNSIGNED agreement and go to designated branches of HDFC, IDBI, ICICI banks or post office and get it franked by depositing required cash.
    (ii) Index -II is not given by builder but by the Sub-registrar's office and that forms a part of the agreement document. It is given as sson as agreement is done either for ready possession or undr construction flat.
    (iii) Photograph and thumb prints are must and they are taken care bu registrar's office.
    (iv) Normally builder gives 2 copies (one original and other xeroxed) to you. Original normally bank keeps for loan purpose. You are advised to make 3-4 more copies of this document for your own purpose and safety. I had gone one step ahead and kept the scanned copy of the agreement on my PC for safety.
    (v) Registration receipt for 30000/- shows other charges (scanning etc.) also. By mistake if the amount of SD is more and and franking isdone for less amount, don't worry. You can pay difference in cash at registrar's office and the amount will be shown as Extra SD charges on registration receipt.
    (vi) Please make sure that commencement certificate by the authorities and the certificate by advocate regarding title clearance form a part of agreement. It also includes the receipt of advance payment to builder.

    one more thing. Normally the agent of the builder at registrar's office charges 4-5k for services.

    I hope I could help a little to the members here.


    Hi Alok,
    Yes. This information is very correct and detailed.

    I just want to add a couple of points here:
    1. We should always take a blue print (which has architects stamp of approval and mentions PMC/PCMCs sanction plan number) from builder. Builders normally do not give this as part of agreement docs. Some buildres take 300-350 Rs charges for giving it to us.
    2. We should have 2-3 photocopies of registered agreement and 1-2 copies amongst this can be made notorised true copy. This can be done at any notory advocate. They normally charge 100 Rs per copy. They give TRUE COPY stamp on each page of your aggrement.
    CommentQuote
  • one more imp doc/plan we should asked to builder that is Electrical Wiring Plan... this helps while designing your interiors...
    CommentQuote
  • Hi
    I have purchased a flat and now I am getting possession of the flat. I have got the flat finanaced from the bank and currently a loan is ongoing. Now, I have to register the flat. Bank has agreed to fund the stamp duty/registration charges. If I get stamp dump charges financed from bank, will I be able to claim the tax benifit under 1.5L for stamp duty charges as well just like the ongoing home loan or are stamp duty/registry cost not covered under 1.5L rebate that you get on interest component paid for the current financial year.

    Also one more question, I want a second car parking as well? So, will the second parking be covered under 1.5L interest section as well?
    CommentQuote
  • IT rebate under section 80C

    The Section 80C allows tax benefit for the amount paid towards the Stamp Duty and the Registration process.
    1.5 lakh is the maximum amount you can claim in a year if your interest repayment exceed 1.5 lakhs. EMI consists of principal element and interest payment. These benefits start only after possession of flat is handed over to you.
    80C of IT act provides for deduction upto 1 lakh which includes principal repayment and stamp duty,registration.
    CommentQuote
  • Thanks for reply. Yes, so my question is

    I amgetting the possession for the flat this year. My bank has agreed to
    finance the stamp duty charges. They are roughly 4 lac . So, I will be paying 3.5-4k interest per month for this. Can I include this interest as
    currently my interest per annum is roughly 1 lac per year.

    Originally Posted by vaibav123
    The Section 80C allows tax benefit for the amount paid towards the Stamp Duty and the Registration process.
    1.5 lakh is the maximum amount you can claim in a year if your interest repayment exceed 1.5 lakhs. EMI consists of principal element and interest payment. These benefits start only after possession of flat is handed over to you.
    80C of IT act provides for deduction upto 1 lakh which includes principal repayment and stamp duty,registration.
    CommentQuote
  • pre emi

    Originally Posted by realguru
    Thanks for reply. Yes, so my question is

    I amgetting the possession for the flat this year. My bank has agreed to
    finance the stamp duty charges. They are roughly 4 lac . So, I will be paying 3.5-4k interest per month for this. Can I include this interest as
    currently my interest per annum is roughly 1 lac per year.


    Loan installments paid prior to possession is known as pre emi.IT benefits start only after possession as is well known.In the pre-EMI cases , the loan payouts are calculated only on the basis of the actual loan disbursement.
    You will not be able complete interest paid will be aggregated and permitted as deduction in five equal instalments only after the construction is complete.
    if you have paid Rs 5 lakhs as the pre-EMIs, then Rs 1 lakh will be shown yearly during the next five years as tax deduction. Pre-EMI is the interest paid during the period. If you have paid any principal amount, it is not eligible for tax deduction.
    Link for some info pre emi on under constructed properties | investmentbazar
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  • Thanks Vaibahav. But my case is possession in year 2012-13 and asking for loan of stamp charges in year 2012-13 as well. So, now say my interest component gets increased by 3-4k per month (say it goes to 12k) but is still less than 12.5 k(max limit) per month. So, I can get tax benefit even though some interest is charged on loan on stamp duty. I am concerned about interest waiver from this year only.


    Originally Posted by vaibav123
    Loan installments paid prior to possession is known as pre emi.IT benefits start only after possession as is well known.In the pre-EMI cases , the loan payouts are calculated only on the basis of the actual loan disbursement.
    You will not be able complete interest paid will be aggregated and permitted as deduction in five equal instalments only after the construction is complete.
    if you have paid Rs 5 lakhs as the pre-EMIs, then Rs 1 lakh will be shown yearly during the next five years as tax deduction. Pre-EMI is the interest paid during the period. If you have paid any principal amount, it is not eligible for tax deduction.
    Link for some info pre emi on under constructed properties | investmentbazar
    CommentQuote
  • Can anyone confirm this ?
    Originally Posted by realguru
    Thanks Vaibahav. But my case is possession in year 2012-13 and asking for loan of stamp charges in year 2012-13 as well. So, now say my interest component gets increased by 3-4k per month (say it goes to 12k) but is still less than 12.5 k(max limit) per month. So, I can get tax benefit even though some interest is charged on loan on stamp duty. I am concerned about interest waiver from this year only.
    CommentQuote