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100% Tax Deduction for Affordable Housing

The document outlines the conditions for claiming a 100% deduction on profits from affordable housing projects under Section 80IBA of the Income Tax Act of 1961 as amended in 2017. The key conditions are that the project must be located in certain metro cities or other places, have minimum plot sizes, residential unit sizes not exceeding 30-60 square meters, floor space utilization ratios, approval and completion timelines, commercial space limit of 3%, ownership restrictions, separate bookkeeping, and exclusions for work contractors and if deductions are claimed under other sections.

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Sagar Kansal
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41 views2 pages

100% Tax Deduction for Affordable Housing

The document outlines the conditions for claiming a 100% deduction on profits from affordable housing projects under Section 80IBA of the Income Tax Act of 1961 as amended in 2017. The key conditions are that the project must be located in certain metro cities or other places, have minimum plot sizes, residential unit sizes not exceeding 30-60 square meters, floor space utilization ratios, approval and completion timelines, commercial space limit of 3%, ownership restrictions, separate bookkeeping, and exclusions for work contractors and if deductions are claimed under other sections.

Uploaded by

Sagar Kansal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Section – 80-IBA, Income-tax Act, 1961 – FA, 2017 (Affordable

Housing Schemes / Housing for All)

Deduction of 100% profits to Affordable Housing Projects:


Where the gross total income of an assessee includes any profits and gains derived from the
business of developing and building housing projects, there shall, subject to the provisions of
this section, be allowed, a deduction of an amount equal to hundred per cent (100%) of the
profits and gains derived from such business.

Conditions for Section – 80IBA


(A). Main Conditions:
Particulars Metro Non-Metro
Location Chennai, Delhi, Kolkata or Mumbai Any other place
Minimum size of project Plot size of land should not be less than Plot size of land should not be less
1,000 sq. mtrs. than 2,000 sq. mtrs.
Residential unit size Does not exceed 30 sq. mtrs. Does not exceed 60 sq. mtrs.
Utilization of Floor area Not less than 90% permissible under rules Not less than 80% permissible under
ratio made by Government or local authority. rules made by Government or local
authority.

(B). Other Conditions:


 Plan should be approved by the Competent Authority after 1st June, 2016, but on or before 31st
March, 2019.
 The Project should be completed within the period of 5-years from the date of approval by the
Competent Authority.
 If the approval related to Housing Project is obtained more than once, the date of first approval
will be considered as approval date. The Project deemed to be completed when the certificate
of completion will be obtained from the competent authority in writing.
 Shops and Commercial Area included in the housing project cannot exceed 3% of the total
built-up area.
 If the Individual is allotted residential unit in the project, no other unit should be allotted to the:
 Same individual
 Spouse of the individual
 Minor children of such children
 Assessee should maintain their separate books of accounts in respect of housing project.
 If Project is not completed within specified years from the date of approval, profits which were
allowed as deductions shall be deemed to be profits of the year in which such limit expires.
 This section shall not apply to work-contractor (including the Central Government or the State
Government).
 If deductions are claimed and allowed under this section, then deductions to the extent of such
profits and gains shall not be allowed under any other provisions of this Act.
Section – 80-ID, Income-tax Act, 1961 – FA, 2011 (Hotels and
Convention Centre in specified area)

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