Applicable to: Developers of Affordable Housing Projects
This section provides a 100% tax exemption on profits from eligible affordable housing projects, boosting the government’s “Housing for All” mission.
Key Features (AY 2025-26)
1. Eligibility Criteria
✅ Project Approval: Must be approved by regulatory authorities (like RERA) between 1 June 2016 to 31 March 2022
✅ Unit Specifications:
- Carpet Area:
- ≤ 90 sqm (Metros: Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Hyderabad)
- ≤ 60 sqm (Non-Metro Cities)
- Price Cap:≤ ₹45 lakh per unit (including GST)
✅ Completion Timeline: Project must be completed within 5 years of approval
2. Deduction Details
- 100% of profitsfrom eligible projects
- No upper limiton deduction amount
- Exemption Period:Available until project completion (max 5 years)
3. Compliance Requirements
- Books must be audited
- Separate accountsfor affordable housing projects
- Form 10-IBfiling with ITR
Illustrative Example
Case: Developer completes 100 affordable units (₹40 lakh/unit)
- Total Revenue:₹40 crore
- Profit:₹8 crore
- Tax Saved (@30%):₹2.4 crore
Comparison with Similar Sections
| SECTION | FOCUS | DEDUCTION | PERIOD |
| 80-IBA | Affordable Housing | 100% | Project Completion (max 5Y) |
| 80-IB(10) | Housing Projects | 100% | Phased out in 2017 |
| 24(b) | Home Loan Interest | ₹2 lakh | Annual |
Pro Tips for Developers
- Verify Approval Date:Only projects approved before 31 March 2022 qualify
- Track Carpet Area Strictly:Even minor excess disqualifies the project
- Claim GST Benefits:Additional savings under GST composition scheme
FAQs
Q: Can a project get extension beyond 5 years?
A: No, completion must be within 5 years of approval.
Q: Is this available for renovation projects?
A: No, only new construction qualifies.
Q: Can NRI developers claim this?
A: Yes, if project meets all criteria.
Current Status
- Closed for new projectspost-31 March 2022
- Existing approved projects can continue claiming till completion
Conclusion
Section 80-IBA has been instrumental in promoting affordable housing in India. While new projects no longer qualify, developers with ongoing approved projects should:
- Monitor completion timelines
- Maintain strict compliancewith size/price norms
- Maximize deductionsbefore project completion
