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BUIDERS GIVEN BENEFIT OF 100% TAX FREE BY SEC 80IB OF INCOME TAX ACT, 1961 FOR MORE 1 YEAR ......WELCOME STEP IN BUDGET, 2019


CONSTRUCTION OF AFFORDABLE HOUSING AND BENEFIT OF 100% TAX FREE PROFIT U/S 80IB OF THE INCOME TAX ACT, 1961 EXTENDED FOR ONE MORE YEAR…..NOW  PROJECT CAN BE REGISTERED FOR BENEFITS OF SECTION 80IB TILL 31/03/2020…..WELCOME PROPOSAL IN BUDGET 2019

UPA GOVERNMENT HAS ALSWAYS FOCUSSED THE ENRICHMENT AND BETTERMENT OF MASS POPULATION WHO HAS STILL “OWN HOME” IS A DREAM.  AFFORDABLE HOUSING CONCEPT WORKED MIRACLY AND OWING DREAM HOUSE COMES TRUE FOR THOUSAND OF FAMILY AND TO ENCOURAGE MORE AND MORE AFFORDABLE HOUSES ARE BUILTUP….GOVERNEMTN INTRODUCED SECTION 80IB FOR THE 100% TAX BANEFITS FOR BUILDERS WHO CONSTRUCTS “AFFORDABLE  HOUSING PROJECT”
AS PER PREVIOUS BUDGET, DEDLINE WAS SCHEDULED 31/03/2019 FOR REGISTRATION OF THE PROJECT FOR BENEFITS OF SEC 80IB, WHICH NOW EXTEDED UPTO 31/03/2020, FOR ONE MORE YEAR .

WHAT IS SEC 80IB, WHO CAN TAKE BENEFITS UNDER THIS SECTION, WHAT ARE THE CRITERIA TO BE FULFILLED….ETC ARE AS SUMMARISED BELOW.

Deductions in respect of profits and gains from housing projects.—(1) 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.
*        the project is approved by the competent authority after the 1st day of June, 2016, but on or before the 31st day of March, 2019;
*        the project is completed within a period of FIVE (5)  years from the date of approval by the competent authority:
*        the CARPET AREA of the shops and other commercial establishments     included in the housing project does not exceed three per cent (3%) of the aggregate CARPET AREA area;
*        the project is on a plot of land measuring not less than—
*        one thousand (1000) square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai; or
*        two thousand (2000) square metres, where the project is located in any other place;
*        the project is the only housing project on the plot of land as specified in clause (d);
*        the CARPET AREA area of the residential unit comprised in the housing project does not exceed—
*        Thirty (30) square metres, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai or
*        sixty (60) square metres, where the project is located in any other place;
*        where a residential unit in the housing project is allotted to an individual, no other residential unit in the housing project shall be allotted to the individual or the spouse or the minor children of such individual;
*        not less than ninety per (90%) cent of the floor area ratio permissible in respect of the plot of land under the rules to be made by the Central Government or the State Government or the local authority, as the case may be, where the project is located within the cities of Chennai, Delhi, Kolkata or Mumbai or
*        not less than eighty per (80%) cent of such floor area ratio where such project is located in any place other, than the place referred to in sub-clause (i); and
*        the assessee maintains separate books of account in respect of the housing project.
*        Nothing contained in this section shall apply to any assessee who executes the housing project as a works-contract awarded by any person (including the Central Government or the State Government).
*        Where the housing project is not completed within the period specified under clause (b) of sub-section (2) and in respect of which a deduction has been claimed and allowed under this section, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of the assessee chargeable under the head “Profits and gains of business or profession” of the previous year in which the period for completion so expires.
*        Where any amount of profits and gains derived from the business of developing and building housing projects is claimed and allowed under this section for any assessment year, deduction to the extent of such profit and gains shall not be allowed under any other provisions of this Act.

AMENDMENTS BY FINANCE ACT 2017,
These amendments will take effect from 1st April, 2018 and will apply in relation to assessment year 2018-19 and subsequent years.
•  in sub-section (2),—
• in clause (b), for the words “three years”, the words “five years” shall be       substituted; Explanation :- Period of Completion of Project is expanded from 3   years to 5 years.
• in clauses (c) and (f), for the expression “built-up area” wherever they occur,     the words “carpet area” shall be substituted;
• the words “or within the distance, measured aerially, of twenty-five kilometres    from the municipal limits of these cities” wherever they occur shall be omitted;
  Explanation :-  Condition of 25 km is removed so that deduction to projects of    non metro areas which are nearby metro areas can claim deduction.
• in sub-section (6), for clause (a), the following clause shall be substituted,     namely:—
‘(a) “carpet area” shall have the same meaning as given to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016.’.

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