Treatment of stamp duty for tax rebate

Q: As per clause (d) of Sec. 88(2)(xv), stamp duty, registration fees and other expenses for the purpose of transfer of such house to the assessee, subject to certain exceptions are eligible for rebate. Nowhere the clause says that such amount be financed by borrowers and that repayment of such loan will only qualify for rebate. Repayment of the amount borrowed is being contemplated in clause (c) of Sec. 88(2)(xv), but there too stamp duty, registration fee are not included. So in my opinion even if the stamp paper, registration fees and other expenses are provided for from own funds, the assessee will be eligible for rebate up to Rs. 20,000 according to clause (d) of Sec. 88(2)(xv) read with second proviso to Sec. 88(5).

A: Rebate under Sec. 88(2)(xv) of the Income-tax Act is meant for repayment of loan given by the employer or the specified agencies. Sec. 88(5) only explains that the investment in property will include stamp duty and registration charges, where the loan covers such amounts. The interpretation given by the reader is not only incorrect but is also not justified in the light of the objective of the relief, which is to cover only repayment of loan.

S. Rajaratnam

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