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Rule 11-OA of Income Tax Rules 1962: Guidelines for notification of affordable housing project as specified business (Sec 35AD)

Rule 11-OA : Guidelines for notification of affordable housing project as specified business under section 35AD
(Chapter: II Part F. - National Committee for Promotion of Social and Economic Welfare)

(1) The form and manner in respect of notification of an affordable housing project as a specified business under sub-clause (vii) of clause (c) of sub-section (8) of section 35AD of the Act shall be as follows:—

(a) the applicant shall apply for notification of the project in Form No. 3CN to Member (IT), Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, North Block, New Delhi;
(b) if any defect is noticed in the application in Form No. 3CN or if any relevant document is not attached thereto, a deficiency letter may be served on the applicant;
(c) the applicant shall remove the deficiency within a period of fifteen days from the date of service of the deficiency letter or within such further period which, on an application made in this behalf may be extended;
(d) if the applicant fails to remove the deficiency within the period so allowed, the Board, if satisfied, may pass an order treating the application as invalid;
(e) the Board may, before granting approval, call for such documents or information from the applicant as it may consider necessary and may call for further details or information from the applicant as well as from the income-tax authorities and other Departments or agencies, as it may deem fit;
(f) the Board may issue the notification to be published in the Official Gazette granting approval to the project or for reasons to be recorded in writing, reject the application;
(g) the Board may withdraw the approval if it is satisfied that the assessee has ceased its activities relating to the specified business or its activities are not genuine or are not being carried out in accordance with all or any of the conditions under this rule;
(h) no order treating the application as invalid or rejecting the application or withdrawing the approval or cancellation of the notification, shall be passed without giving an opportunity of being heard to the assessee;
(i) a copy of the order invalidating or rejecting the application or withdrawing the approval shall be communicated to the applicant as well as the Assessing Officer and the Commissioner having jurisdiction over the assessee.
(2) A project shall be considered for notification if it fulfils all of the following conditions, namely: —
(a) the project shall have prior sanction of the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(b) the date of commencement of operations of the project shall be on or after the 1st day of April 2011;
(c) the project shall be on a plot of land which has a minimum area of one acre;
(d) at least thirty per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS category;
(e) at least sixty per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS and LIG categories;
(f) at least ninety per cent of the total allocable rentable area of the project shall comprise of affordable housing units of EWS, LIG and MIG categories;
(g) the remaining ten per cent or less of the total allocable rentable area of the project may comprise of other residential or commercial units;
(h) the layout and specifications including design of the project to be developed and built shall be approved by the State or Union territory Government or its designated implementing agency;
(i) the project shall be completed within a period of five years from the end of the financial year in which the project is sanctioned by the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India.
(3) The assessee shall maintain separate books of accounts for the project with complete details of all capital expenditure incurred during the previous year on which it intends to claim the said deduction under section 35AD and shall file the relevant income-tax returns by the due date to the Income-tax Department to avail the tax benefit under section 35AD.

(4) A project notified under sub-clause (vii) of clause (c) of sub-section (8) of section 35AD shall continue to be governed by the provisions of this rule to the extent it is not in contravention with the provisions of the Act, as amended from time to time.

(5) In this rule,—
(a) "affordable housing units" shall be of the following categories:-
Category
Rentable Area (in square metres)
Specified cities
Other cities
Economically Weaker Section (EWS)
Up to 25
Up to 30
Lower Income Group (LIG)
Greater than 25 and up to 50
Greater than 30 and up to 60
Middle Income Group (MIG)
Greater than 50 and up to 70
Greater than 60 and up to 85
(b) "date of commencement of operations" means the date on which the project is sanctioned by the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;
(c) "housing unit" means an independent residential unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building - (i) directly accessible from an outer door or through an interior door in a shared hallway and not by walking through another household's living space and (ii) excluding any shared dining areas;
(d) "project" means an affordable housing project;
(e) "rentable area" means the carpet area at any floor level, including the carpet area of kitchen, pantry, store, lavatory, bathroom, fifty per cent of unglazed verandah and hundred per cent of glazed verandah, in accordance with the provisions of the Indian Standard - Method of Measurement of Plinth, Carpet and rentable Areas of Buildings, IS 3861 : 2002, formulated and published by the Bureau of Indian Standards;
(f) "specified cities" shall mean the following—
(i) Greater Mumbai urban agglomeration;
(ii) Delhi urban agglomeration;
(iii) Kolkata urban agglomeration;
(iv) Chennai urban agglomeration;
(v) Hyderabad urban agglomeration;
(vi) Bangalore urban agglomeration;
(vii) Ahmedabad urban agglomeration;
(viii) District of Faridabad;
(ix) District of Gurgaon;
(x) District of Gautam Budh Nagar;
(xi) District of Ghaziabad;
(xii) District of Gandhinagar; and
(xiii) City of Secunderabad;
Explanation.—For the purposes of this clause,—
the area comprising an urban agglomeration shall be the area included in such urban agglomeration on the basis of the latest census;
(g) "total allocable rentable area" means the total rentable area of all the proposed housing units or non-housing units but excluding the areas earmarked for common facilities and services.



Extra Notes for Readers:

- Rule 11-OA was introduced by the Income Tax (1st Amendment) Rules, 2012, w.e.f. 02-Jan-2012



Reference/Source: Check at Income Tax site for latest version of the Rules - link

This page was last updated on 17th October 2016.
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