Affordable homes may get tax boost
Currently, there is a 10-year tax holiday on profits under section 80-IA for infrastructure companies developing roads, highways, ports, bridges, water supply projects, power plants, industrial parks, special economic zones and for providers of telecom and domestic satellite services.
Inclusion of affordable housing in the infrastructure definition could attract more investments into this business.
Housing companies, like other corporate taxpayers, however, will have to pay an 18.5% minimum alternative tax (MAT) on their book profits if the tax liability is found to be less than this threshold due to tax breaks.
Confirming the same, HUPA minister Ajay Maken told FE, “We are being told that the finance ministry is favouring (these proposals). We have learned that the finance ministry has also written to the RBI (Reserve Bank of India) for considering restructuring of loans which have been declared as NPAs (non-performing assets) because of delays in statutory clearances where a developer is not at fault and hence should not be termed as NPAs.”
Under 80-IB (10), a taxpayer is entitled to 100% deduction while calculating the taxable income