Budget 2016 : Deduction of 100% profits to Affordable Housing Projects u/s 80IBA
Section 80IBA is proposed to be inserted in Income Tax Act, which governs the deduction of 100% profits from affordable housing projects.
Following are the proposed provisions of the same.
Conditions to be satisfied by such housing projects
The housing project must satisfy the following conditions to claim benefit under this section.
- The project must be approved by competent authority after 01-06-2016 but on or before 31-03-2019.
- Where the approval in respect of a housing project is obtained more than once, the date of first approval should be taken as the date of approval of the project.
- The project must be completed within a period of three years from the date of approval by the competent authority
- The project will be deemed to be completed where certificate of completion in obtained from competent authority in writing.
- The shops and commercial built up area cannot exceed 3% of total built up area of the project.
- The minimum area of project land should be;
- In case of metro cities : 1000 Sq Meters or more
- In other cities : 2000 Sq Meters of more
- The project should be located ;
- In case of metro cities : within the area of 25 kilometres of the municipal limits of these cities
- In case of other cities : within the jurisdiction of municipality or cantonment board.
- The carpet area Residential units in the housing project should not exceed;
- In case of metro cities : 30 Sq Meter (322.91 Sq Feet)
- In other cities : 60 Sq Meter (645.83 Sq Feet)
- If an individual is allotted a residential unit in the project, no other unit should be allotted to the;
- same individual
- spouse of the individual
- minor children of such individual
- The project should utilise the FAR
- In case of metro cities : Not less than 90%
- In other cities : Not less than 80%
- Separate books to be maintained for such project.
- If the project is not completed within 3 years from the date of approval, the profits which were allowed as deduction under this section shall be deemed to profits of the year in which such time limit of completion expires.
Amit Mundhra FCA