Deductions in respect of profits and gains from housing projects
[Section-142 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
In respect of any tax year, where––
- (a) the gross total income of an assessee, includes any profits and gains derived from the business of developing and building housing projects or rental housing projects referred to in section 80-IBA of the Income-tax Act,1961; and
- (b) such assessee is eligible to claim a deduction from the profits and gains derived from such business for such tax year under the provisions of the said section, if the said Act had not been repealed,
there shall be allowed, in computing the total income of the assessee, a deduction from the profits and gains derived from such business, subject to the conditions that—
- (i) the amount of deduction is calculated as per the provisions of section 80-IBA of the Income-tax Act,1961; and
- (ii) the deduction under this Act shall be allowed only for such tax years, as would have been allowed under section 80-IBA of the Income-tax Act,1961, if the said Act had not been repealed.
FAQs on Section 142 of Income Tax Act 2025
What is the objective of Section 142 of the Income Tax Act, 2025?
Section 142 provides a deduction for profits and gains derived from developing and building housing or rental housing projects, continuing benefits that were earlier allowed under section 80-IBA of the repealed Act.
Who is eligible to claim deduction under Section 142?
Any assessee whose gross total income includes profits and gains from the business of developing and building housing or rental housing projects as referred to in section 80-IBA of the repealed Income-tax Act,1961.
Does the project have to be newly approved under the 2025 Act?
No, the section applies to projects that would have qualified under section 80-IBA of the repealed Act if it had not been repealed.
Is the deduction automatic or are there conditions to fulfill?
The deduction is subject to the conditions that were applicable under section 80-IBA of the repealed Act.
How is the amount of deduction determined under Section 142?
The deduction amount is to be calculated exactly as it would have been under section 80-IBA of the repealed Income-tax Act,1961.
For how many years is the deduction allowed under Section 142?
The deduction is allowed only for such tax years that would have been eligible under section 80-IBA, had the earlier Act continued.
Can an assessee claim the deduction under both Section 142 and any other section simultaneously?
No clarification is provided in Section 142, but typically, deduction under the same income cannot be claimed under multiple sections.
Is there a sunset clause or end date for this deduction?
Yes, the deduction is allowed only for those tax years which were eligible under the repealed section 80-IBA, so it effectively inherits its sunset clause.
What types of projects qualify under this section?
Housing projects or rental housing projects as would have been qualified under section 80-IBA of the repealed Income-tax Act,1961.
Is there any benefit under this section if the project does not comply with 80-IBA conditions?
No, the deduction under Section 142 is contingent upon the project meeting all the conditions that would have applied under section 80-IBA.
Can a new assessee, not earlier eligible under 80-IBA, now claim this deduction under Section 142?
No, only those who would have been eligible under section 80-IBA can claim the deduction under Section 142.
What is the effective date of applicability for Section 142?
Section 142 is effective from 1st April, 2026.
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