Is housing really infrastructure?
Based on these features, the Rangarajan Commission has classified certain activities as infrastructure: railway tracks, signalling system, stations, roads, bridges, airports, power — generation, transmission and distribution, telecom networks, pipelines and canals etc.
The Income Tax Act has its own definition of what constitutes infrastructure for the benefit of tax breaks under Section 80-IA: electricity, water supply, sewerage, telecom, roads & bridges, ports, airports, railways, irrigation, storage at ports and industrial parks/special economic zones.
A taxing exigency
With a multitude of official definitions in existence, what do developers imply when they ask for grant of infrastructure status?
“Basically developers are asking for tax breaks and cheaper and easier funding when they are asking for infrastructure status. Frankly, these ends can be met by other means also without actually classifying housing as infrastructure,” says Pankaj Bajaj, president, CREDAI-NCR and MD, Eldeco Properties.
The tax benefits imply those available under Section 80-IA, where income from infrastructure projects is exempt from income tax subject to conditions.
The other benefit that was available to developers was under Section 80-IB, which gave a tax holiday for housing construction subject to conditions, that would end this fiscal.
The conditions were that the area of the plot be at least 1 acre and the housing unit having a maximum built-up area of 1,000 square feet within
Be the first to comment.