No Income Tax on Affordable Housing Schemes for Builders : Union Budget 2016

chinaBy 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.

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