Deductions in respect of profits and gains from housing projects - Section 80-IBA - Income Tax - Ready Reckoner - Income Tax

Deductions in respect of profits and gains from housing projects - Section 80-IBA The deduction in case of an assessee whose gross total income includes any profits and gains from the business of developing and building housing projects ,shall be allowed a deduction 100% of the profits and gains from such business. Housing project shall be a project which fulfils the following conditions:- the project is approved by the competent authority after 01.06.2016, but on or before 31.03. 2022. the project is completed within a period of 5 years from the date of approval. the built up area of the commercial establishments included in the housing project does not exceed 3% of the aggregate built up area Size of the plot, area of residential units and minimum utilization of FAR (floor area ratio) should satisfy the criteria given below Location of Project Area of Plot of Land on which Project is situated Carpet Area of Residential Units comprised in the Housing Project Utilisation of Permissible FAR (Floor Area Ratio) Project is located within the cities of Chennai, Delhi, Kolkata or Mumbai Not less than 1,000 square metres Not to exceed 60 square metres Not less than 90% Project is located in any other place Not less than 2,000 square metres Not to exceed 90 square metres Not less than 80% the project is the only housing project on the land separate books of account are maintained 3. This section does not apply to an assessee who executes the housing project as a works-contract awarded by any person (including the Central Government or the State Government) 4. If the project is not completed within the period specified then deduction claimed shall Profits and gains of business or profession of the previous year in which the period for completion so expires. 5. Deduction claimed under this section shall not be allowed under any other provision of the income tax act. 6. The stamp duty value of a residential unit in the housing project does not exceeds ₹ 45 lakh ( this condition is applicable if only if the housing project is approved on or before after September, 01, 2019) 7. Provisions of minimum alternate tax (MAT) or alternate minimum tax (AMT) are applicable, even if an assessee is eligible for the aforesaid deduction. Notes: Housing project means a project consisting predominantly of residential units with such other facilities and amenities as the competent authority may approve subject to the provisions of this section. From 01/04/2022, in this section Rental house project also included, it means a project which is notified by the Central government on or before the 31.03.2022 and fulfils such conditions as many be specified in the said notification. Competent authority means the authority empowered to approve the building plan by or under any law for the time being in force.