Feb 28, 2010 Budget 2010
Under the existing provisions of section 80-IB(10),
100 per cent deduction is available in respect of
profits derived by an undertaking from developing
and building housing projects approved by a local
authority before 31.3.2008. This benefit is available
subject to, inter alia, the following conditions:
(a) the project has to be completed within 4 years
from the end of the financial year in which the project
is approved by the local authority.
(b) the built-up area of the shops and other commercial
establishments included in the housing project should not
exceed 5 per cent of the total built-up area of the housing
project or 2,000 sq.ft. whichever is less.
To allow for extraordinary conditions due to the global
recession and the resultant slowdown in the housing sector,
it is proposed to increase the period allowed for completion
of a housing project in order to qualify for availing the
tax benefit under the section, from the existing 4 years to
5 years from the end of the financial year in which the
housing project is approved by the local authority.
This extension will be available for housing projects
approved on or after 1.4. 2005.
Further, it is also proposed to enhance the current
norms for built-up area of shops and other commercial
establishments in housing projects in order to enable
basic facilities for the residents.
The built-up area of the shops and other commercial
establishments included in the housing project is
proposed to be three per cent of the aggregate built-up
area of the housing project or 5000 sq. ft., whichever is
higher. This benefit will be available to projects approved
on or after the 1.4.2005, which are pending for completion,
in respect of their income relating to assessment year 2010-11
and subsequent years.
These amendments are proposed to take effect retrospectively
from 1st April, 2010 and will, accordingly, apply in relation
to the assessment year 2010-11 and subsequent years
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