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February 2012

Guidelines for Notification of affordable housing project u/s.35AD — Notification No. 1/2012, dated 2-1-2012.

By Pinky Shah, Sonalee Godbole
Chartered Accountants
Reading Time 2 mins
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The Board vide the Income-tax (First Amendment) Rules, 2012 has Rule 11-0A prescribing guidelines for approval of affordable housing projects u/s.35AD. This includes Form No. 3CN in which the application needs to be made to Member (IT), Central Board of Direct Taxes, the manner in which the form would be approved and the objections/defects if any would be treated, the circumstances under which the application would be rejected, etc. It also lays down the conditions for eligibility of such projects. Conditions are as under:

  • 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.

  • Date of commencement of the project should be on or after 1st April 2011 and date of completion should be within five years from the end of financial year in which the above authorities have sanctioned it.

  • The plot of land should not be less than one acre.

  • Of the total allocable rentable area of the project, affordable housing units for Economically Weaker Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) should be as prescribed in the Rule.

Separate books need to be maintained for the project. Also the various terms like date of commencement, housing unit, etc. have been defined in the said rules.

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