Section 80-IBA allows a deduction of one hundred per cent of the profits and gains derived from developing and building housing projects (sub-section (1)) and rental housing projects (sub-section (1A)). A housing project must be approved by the competent authority after 1 June 2016 but on or before 31 March 2022, and completed within five years of approval. A rental housing project must be notified by the Central Government on or before 31 March 2022.
For projects approved before 1 September 2019, the plot must be at least one thousand square metres in Chennai, Delhi, Kolkata or Mumbai and two thousand elsewhere, with unit carpet area up to thirty and sixty square metres respectively. For projects approved on or after 1 September 2019, the metropolitan list widens to Bengaluru, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad), Hyderabad, Kolkata and Mumbai Metropolitan Region, the carpet area limits rise to sixty and ninety square metres, and the stamp duty value of a unit must not exceed forty-five lakh rupees. Commercial space is limited to three per cent of carpet area, the project must use ninety or eighty per cent of the permissible floor area ratio, only one unit may go to an individual and his spouse or minor children, and separate books must be kept.
Operative consequences
If the project is not completed within five years of approval, the whole deduction allowed in earlier years is deemed business income of the year in which the period expires (s. 80-IBA(4)).
A project executed as a works contract does not qualify (s. 80-IBA(3)).
Profits allowed under this section cannot be deducted under any other provision (s. 80-IBA(5)).
Under s. 80AC, no deduction is allowed unless the return is furnished on or before the due date under s. 139(1).
Status
Operative for assessment year 2026-27 for projects approved within the window; time-limited by the approval and notification dates. The Finance Act, 2026 does not amend s. 80-IBA.
The Income-tax Act, 1961 governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, the corresponding provision is s. 142.
Case Laws & Commentary
SECTION 80-IBA — DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM HOUSING PROJECTS
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUTORY SCHEME (editorial summary — verbatim bare-Act text in the companion Block-1 file)
Marginal heading: Deductions in respect of profits and gains from housing projects.
Section 80-IBA allows a deduction of 100 per cent of the profits and gains derived from the business of developing and building an eligible affordable-housing project approved by the competent authority during the qualifying window, subject to detailed conditions as to the size of the plot, the carpet area of the residential units, the period of completion, the utilisation of floor area ratio and the limit on commercial area. It is the successor to the housing-project deduction in section 80-IB(10).
A. SECTION COMMENTARY
A.1 Structural position
Section 80-IBA is the modern affordable-housing-project deduction, replacing section 80-IB(10). It is available for projects approved within the qualifying window (which has now closed for fresh approvals) and is conditioned on detailed project parameters.
A.2 Provision taxonomy
A 100-per-cent deduction on profits from an eligible affordable-housing project, gated by plot-size, carpet-area, completion-period, FAR-utilisation and commercial-area conditions, with a recapture where the completion condition is not met.
A.3 Core doctrinal themes
The operative questions are the satisfaction of the project parameters and the completion timeline; the section 80-IB(10) jurisprudence (e.g. the prospective application of conditions and the treatment of mixed projects) informs the analysis, and the section 80-IA machinery applies.
A.4 Legislative evolution / FA amendment trail
Inserted by the Finance Act, 2016 for projects approved from 1 June 2016; the approval window was extended by later Finance Acts up to 31 March 2022 and has not been further extended. Not amended by the Finance Act, 2026.
A.5 CA practitioner pointers
(1) Confirm the project approval date falls within the window and that every parameter (plot size, carpet area, FAR, commercial-area limit) is met. (2) Watch the completion-period condition — failure triggers recapture. (3) The section 80-IB(10) authorities (Sarkar Builders, Brahma Associates) guide the interpretation of analogous conditions. (4) Observe the section 80AC due-date condition.
B. FA 2026 IMPACT NOTE
Section 80-IBA is NOT amended by the Finance Act, 2026; the approval window has closed for fresh projects and the existing conditions continue to govern projects already approved.
C. CASE LAW — CLUSTERED BY ISSUE
Cluster C-1 : Project-parameter conditions and the section 80-IB(10) analogy
Applied authorities: CIT v. Sarkar Builders (2015) 375 ITR 392 (SC); CIT v. Brahma Associates (2011) 333 ITR 289 (Bom)(FB)
Facts: Section 80-IBA carries forward, with refinements, the housing-project deduction of section 80-IB(10).
Issue: How the project-condition questions are resolved for section 80-IBA.
Held: The section 80-IB(10) jurisprudence guides section 80-IBA: conditions are tested by reference to the law at approval and applied prospectively (Sarkar Builders), and the treatment of commercial components follows the statutory limits (Brahma Associates and the express conditions of section 80-IBA).
Ratio: Section 80-IBA is interpreted consistently with the established section 80-IB(10) authority on housing-project conditions.
Editorial scheme summary prepared from the Income-tax Act, 1961 as amended by the Finance Act, 2025, read with the Finance Act, 2026; verbatim bare-Act text is carried in the companion Block-1 treatise file. Digested authorities are reported Supreme Court / High Court decisions verified against standard law reports (ITR/Taxman/CTR). Several deductions in this cluster are sunset for new undertakings but carry substantial pending litigation and remain the governing law for open assessments.
Function in the statutory architecture
Section 80-IBA allows a deduction of one hundred per cent of the profits and gains derived from developing and building housing projects (sub-section (1)) and rental housing projects (sub-section (1A)). A housing project must be approved by the competent authority after 1 June 2016 but on or before 31 March 2022, and completed within five years of approval. A rental housing project must be notified by the Central Government on or before 31 March 2022.
For projects approved before 1 September 2019, the plot must be at least one thousand square metres in Chennai, Delhi, Kolkata or Mumbai and two thousand elsewhere, with unit carpet area up to thirty and sixty square metres respectively. For projects approved on or after 1 September 2019, the metropolitan list widens to Bengaluru, Delhi National Capital Region (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad), Hyderabad, Kolkata and Mumbai Metropolitan Region, the carpet area limits rise to sixty and ninety square metres, and the stamp duty value of a unit must not exceed forty-five lakh rupees. Commercial space is limited to three per cent of carpet area, the project must use ninety or eighty per cent of the permissible floor area ratio, only one unit may go to an individual and his spouse or minor children, and separate books must be kept.
Operative consequences
Status
Operative for assessment year 2026-27 for projects approved within the window; time-limited by the approval and notification dates. The Finance Act, 2026 does not amend s. 80-IBA.
The Income-tax Act, 1961 governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, the corresponding provision is s. 142.
Case Laws & Commentary
SECTION 80-IBA — DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM HOUSING PROJECTS
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUTORY SCHEME (editorial summary — verbatim bare-Act text in the companion Block-1 file)
Marginal heading: Deductions in respect of profits and gains from housing projects.
Section 80-IBA allows a deduction of 100 per cent of the profits and gains derived from the business of developing and building an eligible affordable-housing project approved by the competent authority during the qualifying window, subject to detailed conditions as to the size of the plot, the carpet area of the residential units, the period of completion, the utilisation of floor area ratio and the limit on commercial area. It is the successor to the housing-project deduction in section 80-IB(10).
A. SECTION COMMENTARY
A.1 Structural position
Section 80-IBA is the modern affordable-housing-project deduction, replacing section 80-IB(10). It is available for projects approved within the qualifying window (which has now closed for fresh approvals) and is conditioned on detailed project parameters.
A.2 Provision taxonomy
A 100-per-cent deduction on profits from an eligible affordable-housing project, gated by plot-size, carpet-area, completion-period, FAR-utilisation and commercial-area conditions, with a recapture where the completion condition is not met.
A.3 Core doctrinal themes
The operative questions are the satisfaction of the project parameters and the completion timeline; the section 80-IB(10) jurisprudence (e.g. the prospective application of conditions and the treatment of mixed projects) informs the analysis, and the section 80-IA machinery applies.
A.4 Legislative evolution / FA amendment trail
Inserted by the Finance Act, 2016 for projects approved from 1 June 2016; the approval window was extended by later Finance Acts up to 31 March 2022 and has not been further extended. Not amended by the Finance Act, 2026.
A.5 CA practitioner pointers
(1) Confirm the project approval date falls within the window and that every parameter (plot size, carpet area, FAR, commercial-area limit) is met. (2) Watch the completion-period condition — failure triggers recapture. (3) The section 80-IB(10) authorities (Sarkar Builders, Brahma Associates) guide the interpretation of analogous conditions. (4) Observe the section 80AC due-date condition.
B. FA 2026 IMPACT NOTE
Section 80-IBA is NOT amended by the Finance Act, 2026; the approval window has closed for fresh projects and the existing conditions continue to govern projects already approved.
C. CASE LAW — CLUSTERED BY ISSUE
Cluster C-1 : Project-parameter conditions and the section 80-IB(10) analogy
Applied authorities: CIT v. Sarkar Builders (2015) 375 ITR 392 (SC); CIT v. Brahma Associates (2011) 333 ITR 289 (Bom)(FB)
Facts: Section 80-IBA carries forward, with refinements, the housing-project deduction of section 80-IB(10).
Issue: How the project-condition questions are resolved for section 80-IBA.
Held: The section 80-IB(10) jurisprudence guides section 80-IBA: conditions are tested by reference to the law at approval and applied prospectively (Sarkar Builders), and the treatment of commercial components follows the statutory limits (Brahma Associates and the express conditions of section 80-IBA).
Ratio: Section 80-IBA is interpreted consistently with the established section 80-IB(10) authority on housing-project conditions.
Relevance: Provides the interpretive bridge from the well-developed section 80-IB(10) case law to the newer section 80-IBA.
Editorial note on sourcing
Editorial scheme summary prepared from the Income-tax Act, 1961 as amended by the Finance Act, 2025, read with the Finance Act, 2026; verbatim bare-Act text is carried in the companion Block-1 treatise file. Digested authorities are reported Supreme Court / High Court decisions verified against standard law reports (ITR/Taxman/CTR). Several deductions in this cluster are sunset for new undertakings but carry substantial pending litigation and remain the governing law for open assessments.