Section 142
Section 142: deduction for profits from housing projects
Section 142 continues the deduction available to developers of housing projects and rental housing projects that was previously given under section 80-IBA of the repealed Income-tax Act, 1961. As with the other carry-forward sections in this Chapter, the amount and the years for which it can be claimed are both fixed by reference to the old section, not recalculated afresh.
What Section 142 does
Where the gross total income of an assessee includes 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 the assessee is eligible to claim a deduction from those profits and gains under that section (as if the said Act had not been repealed), a deduction from those profits and gains is allowed in computing total income under the 2025 Act.
How the deduction is worked out
- The amount of deduction is calculated as per the provisions of section 80-IBA of the Income-tax Act, 1961.
- The deduction under the 2025 Act is allowed only for the tax years for which it would have been allowed under section 80-IBA of the Income-tax Act, 1961, as if that Act had not been repealed.
Frequently asked questions
Does Section 142 create a fresh deduction for housing project developers?
No. It only continues the deduction available under section 80-IBA of the Income-tax Act, 1961, for developing and building housing projects or rental housing projects, for whatever remains of the original eligibility period, calculated the same way that section prescribed.
Does it also cover rental housing projects?
Yes - the section text refers to "housing projects or rental housing projects" as covered under section 80-IBA of the Income-tax Act, 1961.
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Talk to our tax team about housing project deductionsLast updated 9 September 2026