Whether I-Tax exemption is possible for the registration fee for mortgage of house plot to obtain loan?

Question

I am a Central govt employee. I have mortgaged the house plot to obtain house loan admissible for CG employees. I have paid registration fee of 2% of the loan amount for registering the mortgage deed. Can I claim IT exemption for this amount ?

Answer 1

I reproduce section 80(C)(2)(xviii) relevant to house:

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—

(a) any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

(b) any instalment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

(c) repayment of the amount borrowed by the assessee from—

(1) the Central Government or any State Government, or

(2) any bank, including a co-operative bank, or

(3) the Life Insurance Corporation, or

(4) the National Housing Bank, or

(5) any public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes which is eligible for deduction under clause (viii) of sub-section (1) of section 36, or

(6) any company in which the public are substantially interested or any co-operative society, where such company or co-operative society is engaged in the business of financing the construction of houses, or

(7) the assessee’s employer where such employer is an authority or a board or a corporation or any other body established or constituted under a Central or State Act, or

(8) the assessee’s employer where such employer is a public company or a public sector company or a university established by law or a college affiliated to such university or a local authority or a co-operative society; or

(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,

but shall not include any payment towards or by way of—

(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out; or

(C) any expenditure in respect of which deduction is allowable under the provisions of section 24;

You will kindly observe that (A-B-C) above spells out items to be excluded for the purpose of deductions. These are 3 types - expenses for obtention membership of society - expenses expended after completion of construction- expenses covered under section 24. REGISTRATION FEE OF 2% IS NOT INCLUDED IN THIS LIST.

SUBCLAUSE 8(d )ABOVE :
"stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee" are eligible deductions. Cannot you treat the registration fee of 2% as "other expenses". You incurred this because you had to raise loan for purchase/construction of house. Is it not expenses incidental to acquiring house? In my opinion - yes

Even in case of doubt, kindly confirm from local income tax office/consultant.

BEST OF LUCK

Answer 2

I am talking about only IT Act. according to section 24(Deductions from income from house property) It is written that only Intt. on borrowed Loan for purchase of /construction of/Repair of property is admissible as deduction. I repeat it is only Interest Amount. Even Though Installment is not Deductible.
It is also confirmed that any expenditure incurred on Stamp duty or Registration of the lease deed is not deductible from the annual value of the house property.
Sir, you can't claim deduction for registration fee for mortgage of house plot to obtain loan.

Answer 3

Registration fees you can not claim. No no no no