80ib(10) deduction availability

[hubert fernandes]

We developed a project u/s 80ib(10) and availed 100% deduction till finacial year ended march 2012. However  in the Financial year 2012-2013 two flats less than 1500 sq ft (ie non adjacant flats in two different buildings in the said 80ib(10)project) were sold to one individual. These flats were sold out of inventory, the project being 100% completed in FY 2009-2010. Clause (e) introduced w.e.f  01.04.2010 of section 80ib(10)restricts from 2 flats being sold to one individual or to spouse/children/representative of such individual.

in view of the above violiation of clause (e) whether the assessse would loose deduction for the entire project Or whether it would loose deduction only on these two flats sold to one individual OR whether the ENTIRE UNSOLD AREA as on 31-3-2010 (since clause (e) of 80ib(10) applicable from 01.04.10) would be open for disallowance

 

AI Summary

Section 80IB(10) Tax Deduction in Question Over Sale of Two Flats to One Buyer in Real Estate Project A query was raised regarding the applicability of the Section 80IB(10) tax deduction for a completed real estate project. The project, which was eligible for a 100% tax deduction until March 2012, sold two non-adjacent flats to one individual in the financial year 2012-2013. This sale potentially violated Clause (e) of Section 80IB(10), effective from April 1, 2010, which prohibits selling more than one flat to an individual or their relatives. The query sought clarification on whether the entire project's deduction, the deduction for the two flats, or the unsold area as of March 31, 2010, would be affected.