The government has clarified on criteria for allowing 100 per cent deduction of profits for promoting affordable housing projects. Companies building flats of up to 30 square metres in four metro cities can seek profit deduction.

In an explanatory note on amendments to the Finance Bill 2016, the government clarified that plot of land of 1,000 square metres and residential unit or flat of 30 square metres in four metros — Chennai, Delhi, Kolkata and Mumbai and any place which is not more than 25 km from these metros will qualify for seeking profit deduction. For projects built in places beyond 25 kms of these four metros, the size limits for a plot

of land and size of residential unit will be 2,000 square metres and 60 square metres, respectively.

The amendments to the Finance Bill 2016 were approved by the Lok Sabha on Thursday. The Finance Bill will now go to the Rajya Sabha for passage next week.

The government clarified the criteria for profit deduction on affordable housing following representations seeking clarification regarding certain conditions.

In another amendment to the Finance Bill 2016, the government has stated that disclosures made in the four-month compliance window under the Income Declaration Scheme, 2016 for domestic black money holders will be kept secret.

“Chapter IX of the Finance Bill seeks to introduce the Income Declaration Scheme, 2016 which provides an opportunity to persons who have not paid full tax in the past to come forward and declare the undisclosed income and pay tax, surcharge and penalty totalling in all to 45 per cent of such undisclosed income so declared. It is proposed to import section 138 and 119 of the Income-tax Act to the Income Declaration Scheme, 2016,” the explanatory note said.

Section 138 of the Income Tax Act states that “no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order”.

The amendments to Finance Bill 2016 have also clarified that the concessional rate of 15 per cent on short-term capital gain will be available for transactions which take place in foreign currency on a recognised stock exchange even if Securities Transaction Tax (STT) is not paid.

The government has also provided concessional rate of Minimum Alternate Tax (MAT) of 9 per cent in on units set up in IFSC even before April 1, 2016. Earlier, the Finance Bill had provided for 9 per cent MAT on units set up in IFSC after April 1, 2016.

The government has also levied 1 per cent tax on sale of car costing over Rs 10 lakh in order to bring high-value transactions within the tax net.

“In order to bring high value transactions within the tax net, the Finance Bill, 2016, inter alia, proposes to amend the aforesaid section, vide clause 86, to provide that the seller shall collect the tax at the rate of one per cent from the purchaser on sale of motor vehicle of the value exceeding ten lakh rupees,” the statement said.

The Finance Bill has also been amended to allow for extension of weighted deduction of expenditure incurred on notified agricultural projects till March 31, 2020 as opposed to March 31, 2018 proposed earlier.

Black money disclosures will be kept secret

> In an amendment to the Finance Bill 2016, the government has stated that disclosures made in the four-month compliance window under the Income Declaration Scheme, 2016 for domestic black money holders will be kept secret

> The government clarified that plot of land of 1,000 square metres and residential unit or flat of 30 square metres in four metros — Chennai, Delhi, Kolkata and Mumbai and any place which is not more than 25 km from these metros will qualify for seeking profit deduction