Sec 80c
This query is : Resolved
17 December 2014
Under Sec 80C(Xiii)a -Deduction available for
"any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis"
What does Self financing scheme mean..also I request to please clarify this section.
"any instalment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis"
What does Self financing scheme mean..also I request to please clarify this section.
17 December 2014
like housing board colony: they construction the house and give also finance and you give the amount in installments.
17 December 2014
the assessee himself is financing.............
17 December 2014
I appreciate your replies but I am not yet clarified with the answers provided.
Lets take a case study to understand,
M/s XYZ Ltd. took land on lease for 999 years from say Kolkata development authority and constructed and alloted flats.Now say, Mr. A purchased a flat,without taking any loan i.e self financed entire cost of house and paid the amount due to M/s XYZ Ltd. in installments,as per the terms of XYZ Ltd. agreement,during the period of construction of house.
Q. Whether Mr A is eligible for deduction under sec 80C ?
Lets take a case study to understand,
M/s XYZ Ltd. took land on lease for 999 years from say Kolkata development authority and constructed and alloted flats.Now say, Mr. A purchased a flat,without taking any loan i.e self financed entire cost of house and paid the amount due to M/s XYZ Ltd. in installments,as per the terms of XYZ Ltd. agreement,during the period of construction of house.
Q. Whether Mr A is eligible for deduction under sec 80C ?
23 July 2025
To answer your query regarding Section 80C(Xiii)(a) and whether Mr. A is eligible for a deduction, let’s break down the provisions and the concept of self-financing schemes under this section in detail.
Section 80C(Xiii)(a) Overview
This section allows a deduction for installments or part payments made to any authority, housing board, or any other body engaged in construction and sale of house property on ownership basis. The deduction applies when payments are made under a self-financing scheme or similar schemes provided by authorities like housing boards.
What is a Self-Financing Scheme?
A self-financing scheme refers to a scheme wherein the buyer does not take a loan from a financial institution or a bank, but rather pays for the property in installments directly to the builder or the authority offering the property. The installment amounts paid by the buyer in the construction phase or after the agreement are considered under this scheme.
The self-financing scheme could be part of a government scheme or a private developer’s initiative where the buyer is directly paying for the property without involving a third-party lender or financier.
Case Study Clarification:
In your case, where Mr. A buys a flat from M/s XYZ Ltd., and self-finances the entire amount (without taking a loan) by paying in installments to the developer, here’s how the provisions of Section 80C would apply.
Nature of Payment:
Mr. A is paying in installments as per the terms of the agreement with M/s XYZ Ltd.
The flat is being allotted to Mr. A on an ownership basis and the payments are being made directly to M/s XYZ Ltd. for the construction and sale of the flat.
Eligibility for Deduction:
The key is whether the payments made by Mr. A are to a body or authority engaged in the construction and sale of house property on ownership basis.
If M/s XYZ Ltd. is part of a development authority or housing board offering such a scheme (i.e., self-financed installments), and the flat is provided on an ownership basis, then Mr. A is eligible to claim the deduction under Section 80C for the installments he pays.
Important Condition: The housing authority or company should be involved in constructing and selling property on an ownership basis. This can include housing boards, development authorities, or developers engaged in constructing and selling property, typically with payment made in installments.
Conclusion:
Mr. A is eligible for a deduction under Section 80C for the installments or part payments he makes under the self-financing scheme, as long as:
The payments are made to a housing authority or body engaged in construction and sale of house property on ownership basis.
The scheme is recognized as a self-financed installment scheme.
In summary, if M/s XYZ Ltd. is acting as a developer offering a self-financing scheme for the sale of the property, then Mr. A can claim the deductions under Section 80C for the amount paid towards the flat.
Let me know if any specific part of this still requires clarification!
Section 80C(Xiii)(a) Overview
This section allows a deduction for installments or part payments made to any authority, housing board, or any other body engaged in construction and sale of house property on ownership basis. The deduction applies when payments are made under a self-financing scheme or similar schemes provided by authorities like housing boards.
What is a Self-Financing Scheme?
A self-financing scheme refers to a scheme wherein the buyer does not take a loan from a financial institution or a bank, but rather pays for the property in installments directly to the builder or the authority offering the property. The installment amounts paid by the buyer in the construction phase or after the agreement are considered under this scheme.
The self-financing scheme could be part of a government scheme or a private developer’s initiative where the buyer is directly paying for the property without involving a third-party lender or financier.
Case Study Clarification:
In your case, where Mr. A buys a flat from M/s XYZ Ltd., and self-finances the entire amount (without taking a loan) by paying in installments to the developer, here’s how the provisions of Section 80C would apply.
Nature of Payment:
Mr. A is paying in installments as per the terms of the agreement with M/s XYZ Ltd.
The flat is being allotted to Mr. A on an ownership basis and the payments are being made directly to M/s XYZ Ltd. for the construction and sale of the flat.
Eligibility for Deduction:
The key is whether the payments made by Mr. A are to a body or authority engaged in the construction and sale of house property on ownership basis.
If M/s XYZ Ltd. is part of a development authority or housing board offering such a scheme (i.e., self-financed installments), and the flat is provided on an ownership basis, then Mr. A is eligible to claim the deduction under Section 80C for the installments he pays.
Important Condition: The housing authority or company should be involved in constructing and selling property on an ownership basis. This can include housing boards, development authorities, or developers engaged in constructing and selling property, typically with payment made in installments.
Conclusion:
Mr. A is eligible for a deduction under Section 80C for the installments or part payments he makes under the self-financing scheme, as long as:
The payments are made to a housing authority or body engaged in construction and sale of house property on ownership basis.
The scheme is recognized as a self-financed installment scheme.
In summary, if M/s XYZ Ltd. is acting as a developer offering a self-financing scheme for the sale of the property, then Mr. A can claim the deductions under Section 80C for the amount paid towards the flat.
Let me know if any specific part of this still requires clarification!
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