By Arnav Pandya

There are tax benefits that are present for housing loans and while most people are aware of the details of the interest and capital repayment there are some other aspects that they might often miss. This is something that should not happen and knowing the details in advance could help them to ensure that this situation is avoided. Here is a look at the benefits that can be claimed in terms of the stamp duty and other registration fees paid at the time of the buying of the house.

Overall variation:
There are a few aspects of the benefits on the tax front as far as the individual is concerned. If there is a housing loan that is taken for the purpose of financing the purchase of the house then there are two angles that will come in to play. The interest paid on the repayment of the housing loan will be allowed as a deduction under the head of income from house property.  If there is the repayment of the capital then the amount repaid will be allowed as a deduction under Section 80C of the income tax act and this will be in aggregate with the other items that comprise the overall deduction of Rs 1 lakh. In addition to this if there is a purchase of the house property then some of the expenses incurred at the time of the purchase would also be allowed as a deduction under this section.

One time benefit:
A big difference with this aspect of the deduction is that this is not a continuous and recurring benefit but is just one time benefit. The repayment of the interest for example could be present for a long period of time that could stretch for years. On the other hand the benefit here is present only at the time of the purchase of the house and hence will be applicable only once when the purchase actually takes place.  If the opportunity to use this benefit is missed then this would not come again so this requires an element where you are ready for this right from the beginning.

Specific heads:
There are a few specific heads under which the expenses for this head would be allowed and this is also a point that needs attention. One of them is the stamp duty that is paid at the time of the sale or the purchase and this is often a significant amount so this will turn out to be a sizeable sum. Similarly the other heads would be registration fee and other expenses for the transfer of the property so every person who is making the purchase would need to see this and then take their actions forward.

Deduction:
The final aspect is the nature of the benefit and whether this can actually be claimed by the individual. This is a benefit in the nature of a deduction so the amount would be reduced from the taxable income of the individual. The other aspect is that this is included under Section 80C of the income tax act. This is actually a bit of a disappointment because of the fact that there are lots of other instruments that are being used for the purpose of claiming the benefits under this specific section. This results in a position where it is highly unlikely that the individual will actually be having some extra room that remains for the purpose of claiming the deduction. The other aspect is that the stamp duty would also be significant where the value of the property is high and hence this would result in a situation where the amounts could end up not providing much use in terms of a tax deduction.

The author can be contacted at arnavpandya@hotmail.com