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Home Acts & Rules Bill Bills FINANCE BILL, 2017 Chapters List Chapter III DIRECT TAXES - Income-tax This
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Clause 37 - Amendment of section 80-IBA. - FINANCE BILL, 2017

Chapter III
DIRECT TAXES - Income-tax
  • Contents

Amendment of section 80-IBA.

37. In section 80-IBA of the Income-tax Act [as inserted by section 44 of the Finance Act, 2016 (28 of 2016)], with effect from the 1st day of April, 2018,-

(a) in sub-section (2),-

(i) in clause (b), for the words “three years”, the words “five years” shall be substituted;

(ii) in clauses (c) and (f), for the expression “built-up area” wherever they occur, the words “carpet area” shall be substituted;

(iii) 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;

(b) in sub-section (6), for clause (a), the following clause shall be substituted, namely:-

‘(a) “carpet area” shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016).’.



Notes on Clauses:

Clause 37 of the Bill seeks to amend section 80-IBA of the Income-tax Act relating to deductions in respect of profits and gains from housing projects.

The said section provides for hundred per cent. deduction of the profits and gains of an assessee developing and building housing projects subject to certain conditions which, inter alia, include that the upper limit for the built-up area of residential unit comprised in the housing project does not exceed thirty square metres in the cities of Chennai, Delhi, Kolkata and Mumbai and any place, within the distance of twenty-five kilometres, measured aerially, from the municipal limits of the said cities; and sixty square metres in any other place; and the project shall be completed within a period of three years.

It is proposed to amend the said section so as to substitute the expression “built-up area” with the words “carpet area” and also to do away with the restriction of aerial distance of twenty-five kilometres from the municipal limits of the above said cities and further to extend the period of completion of the housing project from three years to five years for eligibility under the section.

It is also proposed to provide the definition of “carpet area” as provided in the Real Estate (Regulation and Development) Act, 2016.

These amendments will take effect, from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.

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