Sec 80ib(10)

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Harshil

Harshil (Querist)
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03 December 2011 I want to know the basic understanding of this section.Thank you

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 December 2011 This section has been inserted -to promote the construction activity in housing sector.
.
Basic Understanding of the Section-
.
An undertaking engaged as developer and builder can claim deduction in respect of
profits of an eligible project - 100% profit is deductible.
.
The plot of 1 acre or more, max. built up area
for Mumbai & Delhi 100 sq ft, Other cities 1500 sq ft are the main conditions for the eligibility for deduction.
.
The plan should be sanctioned before 31st March 2008
by the local authority.
.
There are certain more conditions which are not being mentioned due to the limitations applied by the Author.
.

yuvraj ramesh deshmane

yuvraj ramesh deshmane (Expert)
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05 December 2011 Rationalising the provisions of deduction under section SO-IB(IO) developing and building housing
projects - Not to apply to any undertaking which executes the housing project as a works contract
awarded by Amendments in section 80-IB
any other person (including Central or State Government) [Section 80-IB(10)]
Sub-section (10) of section 80-IB of the Income-tax Act, 1961 provides for 100% deduction of the
profits
derived by an undertaking from developing and building housing projects, This benefit is available
subject to the following conditions:
(a) The project is approved by a local authority before 31-3-2007. (See amendment below).
(b) The project is constructed on a plot of land having a minimum area of one acre.
(c) The built-up area of each residential unit should not exceed 1,000 sq. ft. in the cities of Delhi and
Mumbai
(including areas falling within 25 kms. of municipal limits of these cities) and 1,500 sq. ft. in other
places.
(d) The built-up area of the shops and other commercial establishments included in the housing project
should not exceed 5% of the total built-up area of the housing project or 2,000 sq. ft. whichever is
less.
(e) The project has to be completed within 4 years from the end of the financial year in which the project
is approved by local authority.

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