Housing Sector: Period for Sec 80IB benefits extended from four to five years; Commercial area also extended to 5000 sq ft

By TIOL News Service

NEW DELHI, MAR 02, 2010: HOUSING is one of the basic necessities. And not to leave any room for grievance by the realty sector, the Finance Bill, 2010, has extended the period of availment of Sec 80IB(10) benefits.

In view of the acute recession breaking the backbone of the realty sector, many of the developers could not complete their projects within the four year limition. In this backdrop the Finance Minister has 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.