By Accommodation Times Research Bureau
Deduction in respect of profit from housing projects: Section 80IBA
This is a new provision introduced to provide incentive for construction of low
income houses by allowing 100 % deduction to a builder in respect of profit derived
from the project of constructing residential units with built up area of 30 square
meters in metropolitan cities and 60 square meters in other places. Metropolitan area
is Chennai, Delhi, Kolkata, Mumbai or an area within 25 Kilometers from the
municipal limits of these cities. To be eligible for deduction the project should be
approved by the competent authority after 1.6.2016 but before 31st March, 2019.
Further, it should be on a plot of land measuring at least 1000 sq.mtrs. where the
project is located in metropolitan areas or 25 kilometers from the municipal limits
thereof and 2000 square meters where the plot is in other place. The built up area of
the shops and commercial establishments within the housing project should not
exceed 3 % of the aggregate built up area.
The provision is effective from 1.4.2017 i.e. Assessment year 2017-18.