FISCAL CONCESSIONS FOR HOUSING
This Ministry has been pursuing
with the Ministry of Finance the matter of provision of various fiscal
incentives for the Housing Sector. The existing concessions granted under Income
Tax by the Ministry of Finance are as under:-
1.Section 80 IA of IT Act
exempts 100% income from infrastructure projects from income tax for ten
2. Section 80 IB(10) of IT Act
exempts 100% income from housing
projects from income tax provided.
Project is approved before 31st March, 2007
Project is completed within in 4 years from the last day of financial year in
which it is sanctioned.
Project is on a minimum plot area of one acre.
built up area of residential unit is 1000 sqft for Delhi & Mumbai 1500 sqft
for other places
Built up area of shops and other commercial establishments is 5% of built up
area or 2000 sqft. whichever is less
3. Section 24 of IT Act
Sec. 24 deduction on account of interest payment on housing loans is permissible
to owners of rented dwelling units to the fullest extent.
In case of owner occupied houses the limit is set at Rs. 1.5 lakh.
4. Section 54 of IT Act
gain from transfer of residential property if invested in acquiring one
residential house is exempt from tax
5. U/S 36(1) of IT Act
of profit derived from business of providing long term housing finance is
deducted from income provided it is
carried to special reserve.
Before 1994-95 if used to be 40% of total income
6. U/S 36(1)(Viia) of IT Act
for bad and doubtful debts equivalent to 10% of the doubtful and loss assets is
available to banks
7.U/S 10(23G) of IT Act
Housing Projects qualifies for exemption and not individual housing finance.
8. Risk Weight(RW)
weight on housing loans has been increased from 50 to 75 % as far the banks but
capital adequacy requirement (CAR) for HFCs is maintained at 12% against 9% for