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CS Executive · Tax Laws and Practice · Deductions

Under the Income-tax Act, 2025, section 142 provides a deduction for profits from developing and building housing projects. How is the amount and the period of this deduction determined?

The amount and the years are determined by reference to section 80-IBA of the Income-tax Act, 1961, as if it had not been repealed. Section 142 of the Income-tax Act, 2025 adopts that calculation and those eligible tax years, so no new flat rate or period applies.

  1. ACalculated and allowed for tax years as per section 80-IBA of the Income-tax Act, 1961, as if that Act had not been repealedCorrect
  2. BAt a flat 100% of profits for any ten tax years chosen by the assessee
  3. CAt 30% of profits for the first five tax years only
  4. DDetermined by the Board each year through a notification

Explanation

Section 142 allows the deduction subject to conditions that the amount is calculated per section 80-IBA of the 1961 Act and allowed only for those tax years that would have been allowed under that section, as if it had not been repealed. No flat rate, choice of years or annual notification is specified.

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