Procedure for notification of an affordable housing project as a specified business under section 46(11)(d)(vii) and a semi-conductor wafer fabrication manufacturing unit as a specified business under section 46(11)(d)(xiii)

Procedure for notification of an affordable housing project as a specified business under section 46(11)(d)(vii) and a semi-conductor wafer fabrication manufacturing unit as a specified business under section 46(11)(d)(xiii).

36. (1) The applicant shall apply for notification of––

(a) an affordable housing project (herein referred to as "the project") as a specified business under section 46(11)(d)(vii), in Form No. 18; or

(b) a semiconductor wafer fabrication manufacturing unit (herein referred to as "the unit") as a specified business under section 46(11)(d)(xiii), in Form No. 19.

(2) The notification mentioned in sub-rule (1) shall be in accordance in with the following procedure:––

(a) the person shall apply for notification of the project or the unit in Form No. 18 or Form No. 19, as the case may be, to Member (IT), Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, New Delhi;

(b) if any defect is noticed in the application or if any relevant document, as required is not attached, a deficiency letter may be served on the applicant;

(c) the applicant shall remove the deficiency within one month from the end of the month in which such deficiency letter is served;

(d) where the applicant fails to remove the deficiency within the period specified in clause (c), the Board, if satisfied, may pass an order treating the application as invalid;

(e) the Board may, before granting approval, call for such details, documents or information from the applicant as well as from the income-tax authorities and other Departments or agencies, as it may deem fit;

(f) the Board may issue the notification granting approval to the project or the unit, as the case may be, or reject the application, after recording the reasons for rejection in writing;

(g) the Board may withdraw the approval in the case of a project or a unit, if it is satisfied that––

(i) the assessee has ceased its activities relating to the specified business; or

(ii) such activities are not genuine or are not being carried out in accordance with all or any of the conditions under section 46 or under this rule;

(h) the Board may also withdraw the approval in respect of a unit under section 46(11)(d)(xiii), if it is satisfied that the approval granted by the competent authority on the recommendations of the Appraisal Committee under the Modified Special Incentive Package Scheme of the Department of Electronics and Information Technology has been withdrawn;

(i) an opportunity of being heard shall be given to the applicant, if an order invalidating or rejecting the application or withdrawing the approval or cancellation of the notification, were to be passed; and

(j) a copy of order mentioned in clause (i) shall be communicated to the applicant as well as the Assessing Officer and the Commissioner having jurisdiction over the applicant.

(3) The applicant mentioned in sub-rule (1) shall maintain separate books of account with complete details of all capital expenditure incurred during the tax year for which it intends to claim the said deduction under section 46 and shall file the relevant income-tax returns by the due date to avail the tax benefit under the said section.

(4) A project notified under section 46(11)(d)(vii) or a unit notified under section 46(11)(d)(xiii), as the case may be, shall continue to be governed by the provisions of this rule to the extent it is not in contravention with the provisions of the Act.

(5) A project shall be considered for notification under section 46(11)(d)(vii), if it fulfils the following conditions:––

(a) 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 Affairs, Government of India;

(b) the date of commencement of operations of the project shall be on or after the 1st April, 2011;

(c) the project shall be on a plot of land with a minimum area of one acre and out of the total allocable rentable area of the project, the affordable housing units shall comprise of at least—

(i) 30% for Economically Weaker Section (EWS) category;

(ii) 60% for Economically Weaker Section (EWS) and Lower Income Group (LIG) categories; and

(iii) 90% for Economically Weaker Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) categories;

(d) the remaining 10% or less of the total allocable rentable area of the project may comprise of other residential or commercial units;

(e) the design, layout and specifications of the project to be developed and built shall be approved by the State Government or Union territory Administration or its designated implementing agency; and

(f) the project shall be completed within a period of five years from the end of the tax year in which the project is sanctioned by the competent authority mentioned in clause (a).

(6) A unit shall be considered for notification under section 46(11)(d)(xiii), if it fulfils the following conditions:––

(a) the unit shall be exclusively for the manufacture of semi-conductor wafer fabrications;

(b) the unit shall have prior approval of the competent authority on the recommendations of Appraisal Committee under the Modified Special Incentive Package Scheme notified by the Department of Electronics and Information Technology, Ministry of Communications and Information Technology, Government of India;

(c) the date of commencement of operations, being the date on which the commercial production of the unit commences, shall be on or after the 1st April, 2014; and

(d) the unit may have one or more manufacturing facilities, but all the facilities shall be located in India.

(7) For the purposes of sub-rule (5),––

(a) "affordable housing units" shall be of the following categories:

Rentable Area (in square metres)

Other cities

Up to 25

Greater than 25 and up to 50

Greater than 50 and up to 70

(b) "date of commencement of operations" means the date on which the project is sanctioned by the competent authority empowered under the Scheme of Affordable Housing in Partnership framed by the Ministry of Housing and Urban Affairs, Government of India, for a project to be considered for notification under section 46(11)(d)(vii);

(c) "housing unit" means an independent residential unit with separate facilities for living, cooking and sanitary requirements, distinctly separated from other residential units within the building—

(i) directly accessible from an outer door or through an interior door in a shared hallway and not by walking through another household's living space; and

(ii) excluding any shared dining areas;

(d) "project" means an affordable housing project;

(e) "rentable area" means the carpet area at any floor level, including the carpet area of kitchen, pantry, store, lavatory, bathroom, 50% of unglazed verandah and 100% of glazed verandah, in accordance with the provisions of the Indian Standard - Method of Measurement of Plinth, Carpet and rentable Areas of Buildings, IS 3861:2002, formulated and published by the Bureau of Indian Standards;

(f) "specified cities" mean—

(i) the urban agglomerations comprising of the area included on the basis of the latest census, of Greater Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad;

(ii) the districts of Faridabad, Gurgaon, Gautham Budh Nagar, Ghaziabad, Gandhinagar; and

(iii) the city of Secunderabad; and

(g) "total allocable rentable area" means the total rentable area of all the proposed housing units or non-housing units but excluding the areas earmarked for common facilities and services.

(8) For the purposes of sub-rule (6),––

(a) "competent authority" means the authority approving the unit under the Modified Special Incentive Package Scheme notified by the Government of India, Ministry of Communications and Information Technology, Department of Electronics and Information Technology;

(b) "date of commencement of operations" means the date on which the commercial production of the unit commences;

(c) "semi-conductor wafer fabrications" means integrated circuits which are covered in the National Industrial Classification, 2008 under Division 26; Group 261; Class 2610; Sub-class 26103; and

(d) "unit" means a manufacturing facility for semi-conductor wafer fabrications.