Latest Query & Reply

Can you provide details with practical examples of deduction u/s 80IBA 

Reply

As per section 80IBA, 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.

Conditions to be proved for claiming deduction u/s 80IBA

1. The project must be approved by competent authority after 01-06-2016 but on or before 31-03-2019
2. The project must be completed within a period of three years (replaced by five years w.e.f 01-04-2018) from the date of approval by the competent authority
3. The carpet area of the shops and other commercial establishments included in the housing project does not exceed three per cent of the aggregate.
4. If an individual is allotted a residential unit in the project, no other unit should be allotted to the;
same individual
spouse of the individual
minor children of such individual

5.  If the project is not completed within 3 years from the date of approval, the profits which were allowed as deduction under this section shall be deemed to profits of the year in which  such time limit of completion expires.

For example if Project was approved on 01.07.2017 than the project should be completed on or before 30.06.2022. If not completed before 30.06.2021 than deduction claimed u/s 80-IBA was taxed in FY 2022-23.