1. Affordable Housing Scheme For Real Estate Projects

2. GST Rate on Under-Construction Properties
Conditions of “Affordable Housing”:
A Residential House/Flat of carpet area
(Metropolitan Cities- Bengaluru, Chennai, Delhi-NCR,
Kolkata, Hyderabad and Mumbai)
Up to
60 Sq. meters In
Metropoliton Cities
Up to
90 Sq. meters
In Non-Metropoliton Cities
Value
Up to
Rs.45 lakhs

3. GST Rate on Under-Construction Properties
Particulars
Up to 31/03/2019
From 01/04/2019
Residential Units
12%
(With ITC) 5%
(Without ITC)
Affordable Residential Units
8 % 1%
Commercial Units

4. GST Rate on Under-Construction Properties
Conditions in case of Mixed Projects:
Carpet area of Commercial part not more than 15% out of carpet area of Total Projects,
(entire Project treated as Residential)
GST Rate Applicability:
1) In Affordable Housing Units - 1%
2) Residential Units - 5%
3) Commercial Units - 5%

5. Exemption to Services [Notification 12/2017]
Services provided by way of pure labour contracts of
a civil structure or any other original works
pertaining to the beneficiary-led individual house construction or enhancement
under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.

6. Exemption to Services [Notification 12/2017]
PMAY (also known as Housing for all) Scheme has four components:
Credit Linked Subsidy Scheme
Beneficiary-Led Individual Housing Scheme
Affordable Housing in Partnership Scheme
Slum Rehabilitation Scheme
Granting Exemption under this Entry:
Government has granted exemption to pure labour contracts
If, transactions includes supply of material, then benefit under this entry cannot be claimed

7. Concession in Rate Available for Affordable Housing

8. Concession in Rate [Notification 11/2017]
This notification prescribes rates of tax on various services.
Also prescribes lower rates for certain specified works contract services.

9. Composite supply of works contract Entry 3(iv) of Notification 11/2017
Supplied made of a road, bridge, tunnel or terminal for
road transportation for use by general or public
by way of-
Construction
Erection
Commissioning
Installation
Completion
Fitting out
Repairs & Maintenance
Renovation
Alteration

10. 1. Entry 3(iv)(b) of Notification 11/2017
a civil structure or any other original works
pertaining to a scheme under
Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awas Yojana

11. 2. Entry 3(iv)(c) of Notification 11/2017
a civil structure or any other original works
pertaining to the "ln-site redevelopment of existing slums using land
as a resource, under the Housing for All
(Urban) Mission/ Pradhan Mantri Awas Yojana (Urban)

12. 3. Entry 3(iv)(d) of Notification 11/2017
a civil structure or any other original works
pertaining to the "Beneficiary led individual house construction / enhancement“
under the Housing for All
(Urban) Mission/Pradhan Mantri Awas Yojana

13. 4. Entry 3(iv)(da) of Notification 11/2017
a civil structure or any other original works
pertaining to the “Economically Weaker Section (EWS) houses”
Constructed under the Affordable Housing in partnership
By State or Union territory or local authority or urban development authority
under the Housing for All
(Urban) Mission/ Pradhan Mantri Awas Yojana

14. 5. Entry 3(iv)(db) of Notification 11/2017
a civil structure or any other original works
pertaining to the
-Credit Linked Subsidy Scheme for EWS
-Lower Income Group (LIG)
-Middle Income Group-1 (MlG-1)
-Middle Income Group-2 (MlG-2)
under the Housing for All
(Urban) Mission/ Pradhan Mantri Awas Yojana

15. 5. Entry 3(iv)(db) of Notification 11/2017
Applicability of
Subsidy & Interest Amount of Loan
Particulars
EWS
LIG
MIG-1
MIG-2
Annual Income
≤ Rs.3 Lakhs
Rs.3 Lakhs To
Rs.6 lakhs
Rs.6 Lakhs to
Rs.12 Lakhs
Rs.18 Lakhs
Housing Loan Amount Eligible
Up to Rs. 6(L)
Up to Rs. 9(L)
Up to Rs. 12(L)
Maximum Loan Tenure
20 Years
Carpet Area
30 Sq. Mt.
60 Sq. Mt.
120 Sq. Mt.
150 Sq. Mt.
Interest Subsidy
6.5% 4% 3%

16. Composite supply of works contract Entry 3(v) of Notification 11/2017
Supplied made of railways, including monorail and Metro;
and a single residential unit otherwise than as a part of
residential complex; by way of-
Construction
Erection
Commissioning
Installation
Completion
Fitting out
Repairs & Maintenance
Renovation
Alteration

17. 6. Entry 3(v)(c) of Notification 11/2017
Low-cost houses
up to a C/A of 60 sq. mts. per house
project approved by competent authority
empowered under the 'Scheme of Affordable Housing in Partnership’
Framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India

18. 7. Entry 3(v)(d) of Notification 11/2017
Low cost houses
up to a C/A of 60 sq. mts. per house
project approved by the competent authority
Under “Affordable Housing in Partnership”
component of the Housing for All
(Urban) Mission/Pradhan Mantri Awas Yojana
Any Housing Scheme of a State Government

19. 8. Entry 3(v)(da) of Notification 11/2017
Low-cost houses
up to a C/A of 60 sq. mts. per house
Under Affordable Housing Project
which has been given
Infrastructure Status

20. Scheme Benefits Under Section 80-IBA Of Income Tax For Affordable Housing

21. PROVISIONS OF SECTION 80-IBA
Deduction of 100% PROFITS TO HOUSING Projects (Sub-section 1):
Section 80-IBA provides for 100% deduction in respect of the profits and gains derived from developing and building housing projects subject to specified conditions.

22. PROVISIONS OF SECTION 80-IBA
Conditions: (Sub-section 2):
The project must be approved by competent authority after but on or before
The project must be completed within a period of 3 years (5 years w.e.f A. Y ) from the date of approval by the competent authority

23. PROVISIONS OF SECTION 80-IBA
Conditions: (Sub-section 2):
c. Where the approval in respect of a housing project is obtained more than once, the date of first approval should be taken as the date of approval of the project.
d. The project shall be deemed to have been completed when a certificate of completion of project as a whole is obtained in writing from the competent authority

24. PROVISIONS OF SECTION 80-IBA
Conditions: (Sub-section 2):
e. The shops and other commercial establishments should not exceed 3% of the aggregate carpet area of the project.
f. The project is the only housing project on the plot of land.

25. PROVISIONS OF SECTION 80-IBA
Conditions: (Sub-section 2):
Where an individual is allotted a residential unit in the project, no other unit should be allotted to the –
same individual or
spouse of the individual or
minor children of such individual
Separate books of account should be maintained in respect of the housing project.

26. PROVISIONS OF SECTION 80-IBA
Conditions: (d, f, h) (Sub-section 2)
Particulars
Metro
Others
Location
Cities of Chennai, Delhi, Kolkata or Mumbai or within the distance, measured aerially, of twenty-five kms from the municipal limits of these cities
Any other place
Plot of land measuring not less than
(Clause d)
1000 square meters
2000 square meters
Carpet area of residential unit should not exceed (Clause f)
30 square meters
60 square meters
Project utilisation
(Clause h)
Not less than 90% of the floor area ratio permissible* in respect of plot of land
Not less than 80% of the floor area ratio permissible* in respect of plot of land

27. PROVISIONS OF SECTION 80-IBA
Exclusion (Sub-section 3 ):
Any assessee who executes the housing project as a works­ contract awarded by any person (including the Central Government or the State Government) shall not be entitled to claim benefit u/s. 80-IBA.

28. PROVISIONS OF SECTION 80-IBA
Non-completion of project within the specified period (Sub-section 4):
On failure of completion of project within the period specified under clause (b) of sub-section (2) and in respect of which deduction has been claimed and allowed, the total amount of deduction so claimed and allowed in one or more previous years, shall be deemed to be the income of assessee chargeable under the head "Profit and gains of business or profession" of the previous year in which the period for completion expires.

29. PROVISIONS OF SECTION 80-IBA
No double deduction (Sub-section 5):
Where any amount of profits and gains derived from the business of developing and building housing projects is claimed and allowed under this. Section for any assessment year, deduction to the extent of such profit and gains shall not be allowed under any other provisions of this Act.

30. PROVISIONS OF SECTION 80-IBA
Definitions (Sub-section 6):
“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).
Clause (k) of section 2 of the Real Estate (Regulation and Development) Act, 2016:
The net usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or veranda area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment.

31. PROVISIONS OF SECTION 80-IBA
Definitions (Sub-section 6):
“Competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force;
“Floor area ratio" means the quotient obtained by dividing the total covered area of plinth area on all the floors by the area of the plot of land;
"housing project“ means a project consisting predominantly of residential units with such other facilities and amenities as the competent' authority may approve subject to the provisions of this section;

32. PROVISIONS OF SECTION 80-IBA
Definitions (Sub-section 6):
“Residential unit" means an independent housing unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building, which is directly accessible from an outer door or through an interior door in a shared hallway and not by walking through the living space of another household.

33. CASE STUDIES Ownership of land:
Whether builder developing a housing project is required to be owner of the land on which housing project is constructed? Will the answer be different if land is owned by a co-operative society?

34. CASE STUDIES Completion of the project:
There are 7 buildings in a hosing project. The builder could obtain certificate of completion of 5 buildings by the end of period of 5 years from the date of approval of building plan. Whether deduction u/s. 80-IBA would be available? If yes, to what extent?

35. CASE STUDIES Only housing project on the plot of land:
If a final plot is sub-divided by the builder into two or more sub-plots and puts up a housing project on one Of the sub-plots, whether deduction u/s. 80-IBA would be available?
If the sub-plotting of a final plot has been got done by some other person and a builder has purchased a sub-plot out of the final plot, would the answer be different?

36. CASE STUDIES Carpet area:
There are 100 residential units in a project. Carpet area of 10 units is 65 sq. meters and carpet area of 90 units is 58 sq. meters. Whether deduction u/s. 80-IBA would be available? If yes, to what extent?

37. CASE LAWS U/S. 80-IB(10) Ownership of land
CIT v. Radhe Developers (2012) 341 ITR 403 (Guj)
CIT v. Moon Star Developers (2014) 269 CTR 259 (Guj)
CIT v. Shital Corporation (2014) 369 ITR 476 (Guj)
CIT v. Keval Construction (2013) 354 ITR 13 (Guj)
Land owner is a Co-op. Society
CIT v. Swastik Associates (2015) 231 Taxman 893 (Guj)

38. CASE LAWS U/S. 80-IB(10)
Housing project approved by local authority must be treated as housing project in absence of definition under the Act
CIT v. Veena Developers (2015) 277 CTR 297 (SC)
Plan approval & completion certificate name of land owner
CIT v. Sahajanad Associates (2014) 367 ITR 645 (Guj)

39. CASE LAWS U/S. 80-IB(10)
B U Permission application within specified time
ITO v. Saket Corporation (2015) 234 Taxman 435 (Guj)
CIT v. Tarnetar Corporation (2014) 363 ITR 174 (Guj)
Partial completion - Completed units are eligible
CIT v. B. M. & Brothers (2013) 86 CCH 194 Guj HC
Open terrace of Pent house not part of built-up area
CIT v. Amaltas Associates (2016) 389 ITR 175 (Guj)

40. CASE LAWS U/S. 80-IB(10) Proportionate deduction
CIT v. Sanghvi and Doshi Enterprise (20 I3) 255 CTR 156 (Mad)
ITO v. Kirti Construction (2014) 41 CCH 305 AhdTrib
Brahma Associates v. JCIT (2009) 122 TTJ (Pune) (SB) 433
Dilip Kanaiyalal Tilwani v. ITO (2017) 51 CCH 360 PuneTrib
Pr. CIT v. Oceanus Dwellings Pvt. Ltd. (2017) 395 ITR 376 (Karn)

41. CASE LAWS U/S. 80-IB(10) Proportionate disallowance for unutilized FCI
CIT v. Desai Developers (2015) 232 Tax man 490 (Guj)
CIT v. Sahajanad Associates (2014) 367 ITR 645 (Guj)
CIT v. Moon star Developers (2014) 269 CTR 259 (Guj)

42. REGISTRATION I REPORT TO BE FILED WITH IT
AUTHORITIES
Section 80-IBA does not prescribe for separate registration and audit of the books of account of a housing project. As such no form is prescribed by CBDT so far.
As there is no enabling provision for getting audit report u/s. 80-IBA, it is likely that the same may be covered in Form No. 3CD as has been done in case of ICDS.

43. COMPILED BY : CA. NIRAV SHAH
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