Palming off desert for water-theme park
DLF’s tie-up with Laing O’Rourke is a major development in the real estate sector, says Shveta Pathak after her return from Dubai

The booming real estate segment in Dubai is witnessing upcoming of a large number of projects, which are focussing not only on providing facilities in terms of providing space, but also on architecture that is the latest, adding to the beauty and efficiency of the place.

The upcoming Atlantis Development on the Cresent of The Palm, Jumeirah, Dubai, construction of which is being undertaken by the Al Naboodah Laing O’ Rourke, a company that offers services including general contracting, construction management, rebar cut and bend among others, is worth mentioning.

The development, that would be operational by mid 2008, comprises hotel, water park, conference centre and retail facilities, Project Leader, Atlantis Construction Management Team (ACMT), Mr Richard Thomas, said.

The Atlantis site has a total area of approximately 48 hectares and extends for over 1.6 km along the centre of The Palm Crescent, The Palm Development, Dubai.

The Atlantis resort would comprise of a 1,539-room hotel, spa facility, conference centre, aquarium, dolphin experience, retail area, and a theme water park. The 22-storey high hotel with numerous restaurant outlets will have some unusual and distinctive architectural features and impressive views over the Palm.

The water theme park, which will have the capacity to welcome more than 5,000 guests a day, is expected to feature unique water attractions, including one of the world’s largest marine habitats like sharks, an array of water slides and other marine-based attractions.

Of the total cost of $1.5 billion, the budget for development by Al Naboodah Laing O’ Rourke (LOR) is $640 million.

The company, that has to its credit major projects like the Creek and Emirates Golf Clubs, National Bank of Dubai, Twin Towers and Ski Dubai, is also undertaking Dubai International Airport expansion, which is near completion.

Passenger traffic, number of airlines and quantity of cargo increasing at a rapid rate at the Dubai International Airport, the extension would facilitate better and smooth handling of the traffic.

In 2004, a total of 21.7 million passengers used the airport and this number is expected to rise to 25 million this year.

According to LOR officials, Terminal 3 and Concourses 2 are scheduled to be operational very shortly.

The completion of the project would witness a Terminal 3, a multi -level underground structure measuring 300 meters long and 350 metres wide, featuring first-class lounges and dedicated counters, restaurants, 180 check-in counters and 2,600 underground parking spaces. The departure and arrival halls within the terminal would be located 10 metres below the apron and taxiways and passenger orientation would be heightened by the ability to maintain a visual contact with the landside through a fully-glazed facade at one end and with a bright, naturally lit atrium at the other.

Concourse 2, which would be directly connected to Terminal 3, will complement the existing concourse (Sheikh Rashid Terminal) by retaining the overall tapered ‘aircraft fuselage- like’ profile. It would be a multi-level structure for departures, arrivals and other facilities, having 27 gates and 59 loading bridges, the company said. The concourse would be 924 metres long and 80 metres wide at mid-point.

The new terminal would also feature a 300-bedroomed hotel and health club that would include five-star and three-star rooms. Nearly 10,000 square metres of commercial space, too, would be included within the terminal, including Dubai Duty Free shopping outlets and a variety of restaurants.

Not only would the company’s efficiency be witnessed post construction, it has attained several memorable milestones during the construction as well. For instance, in March this year, 50 tower cranes were being used simultaneously on the airport, believed to be the largest amount of tower cranes ever assembled and erected on one project in the world.

What impresses one is the fact that ongoing construction does not interfere at all with the existing structure and work continues smoothly despite construction in progress.

India’s DLF, the largest real estate developer in the country, recently entered into a joint venture with UK’s Laing O’ Rourke. Post the JV, DLF will execute several major projects with Laing O’ Rourke.

DLF, meanwhile, has planned a massive investment in Punjab towards developing of Special Economic Zones (SEZs), retail, commercial and residential complexes in the state. Investment would be directed primarily towards Jalandhar, Amritsar, Patiala, Mohali and Ludhiana.

While site acquisition is complete, the company would begin construction shortly. As per the plans, DLF would build sector-specific SEZ in Amritsar, and multiple product SEZ in Ludhiana. The economic zone in Ludhiana would include a captive power plant. These SEZs would be well connected with the rest of the country and ports, have world-class institutions and habitation areas, an environment friendly zone with green belts, infrastructure facilities on a par with international standards and well-connected transport facilities within the zone.

Apart from being equipped with a robust infrastructure including arterial roads, connecting each zone to the national highway, an inland container depot, air cargo handling facility and captive power plant at Ludhiana, these zones would have provision of a direct road connectivity to the nearest railway track and a trading zone for efficient global supply chain management.

Besides, it would come up with retail malls in Ludhiana, Jalandhar, Amritsar, Amritsar, Patiala and Mohali. Key features of the retail malls would be that they would have a visual connectivity through the atrium, visitor traffic flow would be through escalators, have glass capsule lifts and staircases, be centrally air conditioned with a 100 per cent power backup and have a glass façade in elevation.

The company would also develop townships and undertake group housing projects in the state.

Apartments get luxurious
Ruchika M. Khanna

Disposable incomes, less availability and high cost of residential plots and assurance of round- the- clock amenities like security and power back- up... all these factors have facilitated real-estate developers, bringing home the idea of high- end luxury apartments and penthouses in the city and peripheral areas.

With the growing class of nouveau riche, some of the top real estate developers in the country have set their eyes on the city and surrounding areas of Panchkula, Zirakpur, Dera Bassi and Mohali, to develop and sell high-end luxury apartments. Offered at a price between Rs 50 lakh and Rs 1. 50 crore, it is estimated that about 2,000 luxury apartments would be constructed in this region.

Gone are the days when you would brood (of course with your interior designer), trying to bring in some semblance of design and aesthetics in the rather dull flats in a group housing society. The flavour of the residents is now centrally air -conditioned apartments with modular kitchens, Italian marble flooring, jacuzzis, wi-fi connectivity, walk-in closets et al. Name it and the facility is being offered by the developers.

After the Uppal Group took over a 5.4-acre land in Manimajra, Chandigarh, in an open auction, for constructing hi-end apartments, it led to a race of sorts among the leading developers in the country. Parasvanath Developers and Samar Estates are both developing luxury apartments in Sector 20, Panchkula.

Omaxe is coming up with their apartments, Omaxe Greens, in Dera Bassi, while Silver City is constructing penthouses in Zirakpur. Luxury apartments are also coming up in Bartana (Zirakpur) and IT Park, Mohali. But will these luxury apartments have takers, considering the high cost and less covered area than residential plots. Flats in the surrounding locations are being sold 30 to 50 per cent less than the price quoted for these luxury apartments. So how do the developers propose to sell these? “Our USP,” says Mr Rumneek Bawa, CEO of Uppal Group that is promoting Uppals Marble Arch, “lies not just in the aesthetics of the apartment. Facilities like jogging tracks, gymnasium, round-the-clock power, security, and maintenance staff, coupled with a clean environment, has already enthused a lot of residents. We have already booked 60 per cent of the 164 flats”.

Agrees Mr Vinod Bagai of Samar Estates, who is coming up with 1,100 luxury apartments in Panchkula. “Security is a primary concern with those booking our flats. 

Realty soars, yet rental yield remains poor
Naveen S Garewal writes from City Beautiful

Real estate in Chandigarh has never been as tempting in terms of an investment as it is today. But with the prices continuing to skyrocket, there is bound to be a cap on the maximum limit on the investment return ratio, putting a ceiling on the upward trend in pricing. Realtors are bullish on Chandigarh, but pure financial analysts scoff at the idea of an investment that has no correlation with the return to investment ratio.

“Rentals are not keeping pace with increased property prices, resulting in low rental yields. Currently the rental yields (rent divided by property price) is in the range of 1 to 2 per cent in terms of residential homes.

The figures for commercial properties are not very different. In cities like Bangalore, Pune, Mumbai and Delhi, this ratio is much higher and in the range between 5 and 6 per cent, annually. Put in a layman’s term it means that the property gives a return that is equal to a one year fixed deposit, besides also offering potential for capital appreciation,” says a leading city-based investment planner.

The two kinds of properties that have steadily been rising defying all laws of escalation are the properties in the Industrial Area that are now legally allowed to be converted in terms of their right to use. As a result, owners of four prime properties have applied change of land use after conversion with proposals, mostly to set up malls. This includes the space that formerly housed the Pasco Motors and now owned by Uppal Group.

The rental yields in terms of prime commercial properties in the city are said to be in tune of 3 to 4 per cent. After the notification by the Chandigarh Administration allowing conversion of land use in the Industrial Area, there has been a sharp increase in prices. A plot that sold for anything between Rs 2 to 2.5 crore per acre, is currently being quoted for around Rs 10 to 12 crore for an acre. Almost out of reach of a small businessman, most people showing interest in property in the Industrial Area are small and medium builders proposing to build shopping malls and multiplexes.

According to Mr. Amarjit Sethi, a consultant, “the four, six and eight kanal houses in the City Beautiful have become priceless. For one such house on sale there are at least ten buyers despite the abnormally high prices at any given time. The prices of such houses are booming because unlike the two kanal and smaller properties that are available in Chandigarh, Panchkula and Mohali, the four kanal and larger properties are only available in Chandigarh”.

Mr. Tirlok Singh, President of the Chandigarh Property Consultants Association (CPCA) said: “There has been a 25 per cent increase in the value of properties larger than four kanals, located in the northern sectors of the city. Quoted for around Rs 6 to 7 crore in December last, sellers are asking for anything between Rs 9 to 10 crore today.

A Sector 22 property dealer, Mr. Davinder Kumar said: “The situation is, however, different in terms of houses that are two canals or lower. A two kanal house (1,000 square yards) in good sectors of the city have met their ceiling at around Rs 5 crore. This is the same value that these houses were assessed at in the beginning of the year. This is mainly because there are hundreds of houses of this size available in Chandigarh, Mohali, Panchkula and the periphery”.

However, there has been depreciation, ranging between 15 to 20 per cent, in terms of houses smaller than two kanals over the past three to four months. Property dealers attribute this to a ‘correction of sorts’ in prices that had become unreasonably high due to a boom caused by factors such as setting up of an Information Technology (IT) Park, upgrading of Chandigarh Airport into an international airport, setting up of a Biotechnology Park in the Dera Bassi, promoting Chandigarh as a weekend get away from Delhi, etc.

Mr. Sethi said, “the slow down in the market could revive after the money is pumped back into real estate in the post-harvesting phase in the third quarter of the current financial year”.

Estrate talk
Slump eases out middlemen
Peeyush Agnihotri

Farmhouses are giving way to malls and lush fields to housing societies. Real-estate boom, which has taken the tricity (Chandigarh, Panchkula and Mohali) by storm, has also hit mofussil towns on the periphery.

Punjab, a state synonymous with open fields, is fast getting converted into a land of choc-a-bloc flats.

Sky-rocketing property prices in the tricity has made the middle-income group look towards small townships, adjoining Chandigarh.

“The concept of six-storeyed luxury flats was hitherto unknown to people in Punjab townships though it is not new for the residents of bigger cities. Housing societies had flats no bigger than 3-storeys. Developers and builders are these days constructing six-storeyed luxury flats,” says Manmohan Goyal, Director, Astha Enclave. Astha Enclave is coming out with 200 houses in Kharar, which would have motley of independent houses and flats of different configurations. More mega-schemes are in the pipeline for bigger cities.

While agreeing that there is a slump in the market currently, Manmohan opines that it is to the benefit of builders. “The slump has eased out middlemen from the trade. Genuine buyers turn up to genuine sellers and the deals that do take place are not motivated by the quick-buck syndrome factor.

Manmohan, a BE (Civil) from PEC, Chandigarh, has a word of advice for those investing in real estate shares. “Realty boom on the stock market is not going to stay for long.”

DLF, Indiabulls joint venture harbinger
of new trend
Manoj Kumar

The pact between the Delhi-based real estate major DLF Universal and Indiabulls Financial announced last week, to form a 50:50 joint venture Kenneth Builders & Developers seems to the beginning of a new trend in the public private partnership to address the housing shortage in urban India.

To begin with, Kenneth Builders & Developers has acquired 35.8 acres of land from Delhi Development Authority (DDA) through a competitive bidding process for Rs 450 crore to develop residential and commercial properties. DDA had called for bids to develop residential projects under its public-private partnership project.

The market experts are considering it as major development claiming that efforts of the state governments to address the issue of housing for the lower and middle classes in the urban areas have failed over years.

The JV is expected to sharply reduce the construction period of the residential and commercial complexes, besides offering an substantial revenue to the government to development necessary infrastructure.

The foreign direct investment in the sector alone is expected to be nearly $16 billion over the next five to six years. Government has asked the state governments to follow the model of public-private partnership in real estate to boost the housing sector, besides generating revenue for the state economies.

The industry experts said despite increase in interest rate on housing loans, the entry of corporate sector in real estate would help bring down costs due to economies of scale besides pushing the unorganised players from the market.

Under the Public-Private partnership model, the government will emerge as a regulator to monitor the ‘project and especially the quality of construction material.” Consumers would have plenty of choice and also have an opportunity to design their own homes according to their own needs.

“Whether it is DDA in Delhi, PUDA or HUDA in Punjab, Haryana, one can see the failure of state agencies to create adequate and good houses for the people. One can only hope that with the entry of corporate sector, there will be a boom for the housing sector in urban India,” said an official in the industrial chamber, Assocham.

Although some experts doubted over the future of the JV, after Security and Exchange Board of India (SEBI) rapped the Indiabulls but later reviewed its order.

The JV company is expected to develop high-end residential properties in the National Capital Region, said sources adding the DLF will shortly float an IPO to raise necessary funds from the market.

The company had entered into another tie up in Februray with UK based Laing O’Rourke (LOR), $ 5 billion infrastructure major to form DLF Laing O’Rourke with an initial investment of around Rs 500 crore to set up a construction company.

Considering the huge potential of the sector, government has already opened the real estate for the foreign investors. The real estate prices have already appreciated by 80 per cent to 100 per cent in the region, especially in Delhi, Gurgaon, Noida and other towns.

The Indiabulls - DLF JV has floated a special purpose vehicle (SPV) to acquire the DDA property. The newly formed JV will be used to buy commercial and residential properties across India in the future. Currently, the JV is bidding for more than four properties in Delhi and the NCR.

As the real estate industry witnesses exponential growth in the coming years, property consultants feel that the process of acquiring huge chunks of land will continue. There is an unmet demand of housing in the metros, and fast emerging towns in Punjab, Haryana, Western UP and other towns in Rajasthan.

Real estate consultants said government as the industry sees more and more joint ventures being signed with international players, the pressure on the industry to acquire more land will increase.

“It is not the biggest deal in terms of value. But these deals are surprising everybody because they are beating the market expectations in terms of land prices,” said another real estate consultant in Noida.

Homes that bear the shock
Quake-resistant homes are in vogue in Doaba region, says Varinder Singh

Earthquake-resistant buildings are in vogue in Doaba region of Punjab, where, incredibly increased awareness about vulnerability of the area to deadly quakes during past about four years, is driving home builders to go in for reinforced earthquake-resistant residential and commercial buildings.

The safety oriented transformation in thinking, particularly, from building point of view, is apparent from the fact that a large number of owners of those multi-storeyed buildings, which, were devoid of any ‘shock absorbing’ structures, were indulging in renovation of their places to meet any threat posed by a quake. But most of the effort is at the end of people is not stirred by the authorities concerned.

Decide between the Victorian and the Georgian
Exteriors are as important as interiors, says A.P. Singh

If home carries the soul of the family, then its exteriors are surely the body, which houses that soul within. Just as you have spent hours pouring over the concepts to finalise the designs for the interiors of your home, ensure that you don’t allow fatigue to catch up on your energy and desire to create the exteriors, which are going to speak volumes about your dream home for years to come.

Is it the tranquil English country cottage look that you hold close to your heart? Do you prefer the vibrancy of colourful stucco period for your façade instead? How about the informality of American ranch look? Do you like the swirls of Victorian period or calm staidness of Georgian designs? Are you intrigued by the mystery of gothic structures? Have you considered the rustic looks reflecting your roots? Perhaps you wish to pinch ideas from cities or countries you have visited. You may love the windows of Louvre museum or the externally visible staircase of Modern Art Museum in Paris. Rajasthan’s Jaali work in marble or natural stone still spells magic. Towering glass-panes offer contrast to the wooden trellis decked with vines.

Arches

Exteriors are not limited to the façade itself; but include numerous other elements, which are either mandatory, offer utility or are provided for sheer beauty. You may want arches of Marble Arch to adorn your lawn if it is large enough or a self-contained marble fountain to soothe the frayed nerves. Do you like the manicured lawns or wild outgrown look for your garden? Would you like a little patch of kitchen garden to add fresh ingredients to your cooking?

Have you got space and are inclined to cool off in a swimming cool adorning your garden? A birdbath is equally soothing for the winged souls if space is restricted. If you are a pet friendly household, then have you accommodated your pets? BBQ is wonderful and practical feature to have but only if you grill well. External fireplace will warm many a hearts.

Garage

How many vehicles can be housed in the garage or have you converted the garage into a spare bedroom or utility room? How many cars need to be parked in the driveway? Have you allowed for the security cabin? Have you thought about compensating for scarcity of water supply by installing sub-level water tanks underneath your lawn? Have you paid sufficient attention to various lighting options? Remember, internal lights are usually not suitable for external usage.

If design and element choices are plenty, so are the materials to employ for your exteriors. However, do these complement the exteriors at large? Natural stones and slate in myriad of colours and textures can be used literally anywhere on the walls and flooring. Glass and metal modern exteriors will look out of place with rustic garden concept. Spanish garden walls with English house are becoming. Add Scandinavian garden furniture and you have whole of Europe at your doorstep to greet your guests. Reed fencing however is comfortable with all informal concepts.

Driveway surfaces should be of rough texture to prevent slipping. Well-lit pathways from your transportation point to the house should have a smooth surface and be as short as possible. To be fully accessible, driveways and walkways need to be designed wider so that car doors can open fully without hitting any wall or fence. Porches built should have a radius of at least five feet for ease of manoeuvring. Consider putting a bench, flower planter or protective wall where there is a change in floor level.

Feng shui

Principles of feng-shui have generated interest in people lately. The building characteristics branch of feng-shui studies the flow of energy within a structure. The feng-shui practitioner evaluates a building’s overall shape using three main criteria comprising of stability, smoothness and balance.

Generally a building’s shape is thought of as stable if none of the levels is significantly larger than the others and if the structure doesn’t rest on pillars. A building is said to be balanced if it has a regular (i.e., symmetrical) shape. A building is said to be smooth if it has no harsh, protruding features, whether vertical or horizontal. Houses shaped like triangles and those with knifelike edges also lack smoothness.

A building’s appearance is also evaluated according to the principle of “resemblance.” Buildings that resemble prisons, fortifications, and weapons are undesirable, as are buildings that appear to be falling down, burning, or getting chopped up.

Last, but not the least, does you choice of exteriors reflect your personality and falls within your budget? Do your exteriors make you lift your head in pride?

Holy City fast turning into City of Malls
Sanjay Bumbroo

The emergence of the new shopping malls on the Mall Road and other areas is having a spiralling effect on the land prices, including commercial as well as residential, in the vicinity of Holy City.

According to insiders, the land prices have shot up in and around Amritsar due to the influx of land mafia, which has cornered the best sites and are carving out commercial and residential localities of the holy city.

Sword of demolition dangles on Gurgaon colonies
Residents are left to face the music after colonisers exploit the legal loopholes, sell land and vanish, reports Ravi S. Singh

The high appreciation in value of land in Gurgaon keeps the land sharks and mafia active in their business of illegal colonisation and poaching of land, posing a severe challenge to the government machinery in the process.

Hundreds of farmhouses have come up in the areas of Sohna and Taoru. No one is sure how long the ongoing drive against illegal colonisation would be sustained The farmhouses were set up several years ago after demolishing and levelling the Aravali hills.

It all happened under the very nose of the authorities, more than a decade back. The spectre of demolition now hangs on the house-owners. Land sharks made another attempt to set up a separate colony adjacent to New Palam Vihar. The DPC and road networks were laid, which was dismantled by the authorities, a few days ago.

Pulse Group ties up with oil firms for highway hotels
Manoj Kumar

India’s first organised food chain of North Indian food — Pulse Foods India Private Limited — has announced a tie up with oil marketing companies to open restaurants on the petrol pumps at select locations, initially on the Delhi-Amritsar and Delhi-Chandigarh Highways.

“With the improvement of road network especially in Punjab, Haryana, we are witnessing a sharp increase in travelling by middle-class families through own cars and deluxe buses. They are ready to spend money to have good food in hygienic environment,” said Mr Neeraj Jain, CEO of the company.

The company is in talk with public and private oil companies, he said, to open restaurants under the Pulse brand name, and hope to open restaurants soon say, near Karnal, around Ludhiana, Ambala and near Solan on the Chandigarh- Shimla highway.

Pulse Foods India Pvt Ltd, is the hospitality initiative of the Rs 1,000 -crore Poddar Heritage Group, headed by Ficci President Saroj K. Poddar. Other brands of the group include Singer, Style Spa, Gillette, Hettich and Get Lionel.

“Customers can easily find fast food, South Indian and Chinese food on the roadside, but for the North Indian food, especially the Punjabi food, they would have to go either to dhabas or five-star restaurants. To bridge the gap, we have entered to provide good quality food at reasonable price in a neat and clean environment,” he said claiming there was an overwhelming response to the initiative.

The company has already set up retail network in Delhi, Noida, Faridabad, Ludhiana and Gurgaon in North India, besides Bangalore in the South and Pune in the West.

Dubai to build world’s longest hotel strip

The booming Gulf city state of Dubai will add another feather in its cap with the construction of world’s longest hotel strip at a cost of $27 billion, developers said today.

One of the seven members of the United Arab Emirates federation, Dubai has made plans to receive about 15 million visitors a year from 2010. — AFP

TAX tips
Determining fair rent of property
by A.N. Shanbagh

Q: I have two flats — one in Mumbai (self-occupied) and the other in Jalandhar.

The one in Jalandhar is empty and is not let out but is used be me & my family as a weekend holiday flat and we visit there once in about two to three months.

In my IT return, I declare the notional income from the Jalandhar flat taking the Annual Ratable value as declared by Jalandhar Municipal Corporation in their property tax bill as under:

Municipal Value Rs. 2550.00

Municipal Taxes Paid Rs. 2220.00

Ratable Value. Rs. 330.00

Less Repair & Collection Charges Rs. 99.00 and Rs. 231.00

Therefore, income from house property of Rs 231.00 is added in my IT Return.

However, the IT officer insists that I should take the notional rental value as that may be obtained by any rented flat in the neighbourhood. How do I go about finding this!

He is, thus, inclined to fix it arbitrarily at Rs. 8 per sq. ft. per month, or Rs. 4,000 per month (being a 500-sq. ft. flat). This would mean an unjustified burden on me as in any case, I do not have any income from the flat but keep paying society dues, electric charges, annual property tax and also spend money on the occasional maintenance of the flat.

Can you please advise the correct position is there any case law etc. on the subject? If so, can you please provide me the details of the case number etc. so I can take up the matter with greater confidence?

— Mayank

A: The IT officer is partly justified, however, you can challenge the arbitrary fixing of the rent.

For calculating the annual value of a let out property, including a deemed let out property, the higher of the reasonably expected rent of the property or the municipal valuation has to be taken. However, a number of factors go into determining the fair rent such as location of the property, rents of similar properties in the neighbourhood etc.

Fair rent of the property can be determined on the basis of a rent fetched by a similar property in the same or similar locality. Though two properties cannot be alike in ever respect, it has been observed in Stocks v Sulley 4TC98 that the evidence afforded by transactions of other parties in the matter of other properties in the neighbourhood, more or less comparable with the property in question, is relevant in arriving at reasonable expected rent.

Capital gains

Q: I am employed in an MNC. For .2005-2006, I sold. ESOP/ESPP shares (thereby incurring capital gains) of the company and prepaid a certain portion of the principal amount of an existing home loan (taken in 2003). Am I eligible for capital gains exemption u/s 54F. This is the only house property that I am having.

— Mahajan

A: The exemption is available for a direct purchase of property and not for prepaying a loan. Sec. 54F will not be available to you.

Law of the land
No rebate if house is on in-law’s name
by S. C. Vasudeva

Q. I am a government schoolteacher. I took a loan of Rs 3 lakh from HDFC Bank for extension in the house, which is in the name of my father-in-law and mother-in-law. They are retired persons and not eligible for income tax. They are co-borrowers. The sale deed is in their name. Please tell me whether I am entitled to avail the IT rebate on the interest being paid on the loan.

Kamlesh Kumari, Ludhiana

A. Section 80C of the Act provides that in computing the total income of an assessee being an individual or an HUF, there shall be deduction, in accordance with and subject to the provisions of the section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub section (2) of the said section, as does not exceed Rs 1 lakh. Sub section (2) of the said section provides that the sums referred to in sub section (1) shall be any sum paid or deposited in the previous year by the assessee in respect of various schemes specified therein. One of the items covered in the aforesaid sub section is the amount paid during the previous year towards the repayment of amount borrowed for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head Income from House Property or which would, if it had not been for the assessee’s own residence, have been chargeable to tax under that head.

On the basis of the facts given by you, it is evident that the house does not belong to you and therefore, any payment made by you towards the repayment of loan would not be covered under the provisions of Section 80C of the Act. I may add that the interest on the loan would also not be deductible under any head of income, as amount has not been borrowed for the acquisition or construction of property by you.

Joint holders

Q. We both (husband and wife) are in a government job and have a plot on joint name. We have taken a housing loan for its construction on joint name. Kindly clarify can we divide the total amount (interest + principal) to be paid during this financial year for taking rebate from the Income tax. How this rebate is be considered for the calculation of the income tax.

K.G. Singh, Ludhiana

A. The interest and the principal shall have to be divided in the same proportion in which the money has been invested by you in the purchase of plot as well as in the construction of the house.

Sale and purchase

Q. I was allotted a flat by a co-op housing society of Punjab Government in an Urban Estate of Punjab in March 2004. I am paying quarterly instalments since then from my own income (income from salary). The construction has not yet started, so, possession has not been given.

(i) Whether instalments paid in the financial year out of my income will be eligible for deduction U/S 80c and up to what limit.

(ii) If I take loan from the bank for these instalments, then whether interest paid would also qualify for rebate in above case, in same financial year.

(iii) I am planning to sell this flat and apply the sale proceeds towards purchase of new house for my own use, then whether tax on short-term capital gains can be saved by this purchase.

Rekha, Chandigarh

A. The answers to your queries are as under:

(i) The instalments paid in the financial year towards the cost of the house property allotted to you, will be eligible for deduction under section 80C of the Act. The deduction allowable under Section 80C for the sums paid or deposited and covered in the said section is limited to Rs 1 lakh.

(ii) The interest paid on the amount borrowed for the acquisition of a house is deductible from the income from house property. In case there is no income from house property, which is obvious as the property is still under construction no deduction would be allowable under the Section 24 of the Act. However, as and when the construction is completed, the explanation to Section 24 of the Act would be attracted and interest, if any, payable on such capital for the period prior to the previous year in which the property has been acquired or constructed as reduced by any part of the interest allowed under any other provisions of the Act, shall be deducted in equal instalments for the said previous year and for each of the four succeeding previous years.

(iii) The tax on short-term capital gains cannot be saved in any manner and shall have to be paid.

Ancestral property

Q. I inherited a share in ancestral rural property consisting of agricultural land & barra from my father. This land is situated in a village of tehsil and district Ambala (Haryana) (25 km from Ambala). This land was purchased by great grandfather of my father. Now I sold my share for Rs.1.60 lakh in 2005-06. Please advise me:

(i) Whether a copy of registry is compulsorily enclosed with ITR.

(ii) Whether sale proceeds are taxable as capital gains. If yes, then, at what rate (year of purchase and amount not known)

(iii) Whether above rural land be treated as “Rural land outside municipal limits” or not and will be exempted from capital gains tax, hence need not to be shown in ITR. Whether separate proof besides registry, is required to prove that it is outside municipal limits and from where it is obtained-whether from patwari/kanungo.

R.K. Gupta, Chandigarh

A. In accordance with the provisions of the Act read with the notification issued by the Central Government in February 1991, the agricultural land situated in the area beyond a distance of 8 km from the municipal limits from all directions from Ambala City is not covered within the definition of the term capital asset. The capital gain earned on the sale of such capital asset is not taxable under the provisions of the Act. In case the agricultural land sold by you is beyond the aforesaid limits, no tax would be payable on the capital gains. However, a certificate from the patwari/kanungo with regards to the distance and situation of the agricultural land must be obtained, so that there is evidence to the effect that the agricultural land is beyond the distance specified in the Act. The capital gains earned should be shown in the Income-tax return in the column “Income claimed to be exempt from tax”. There is no necessity to enclose the sale deed along with the income-tax return in case the capital gain is not taxable.

Vaastu views

• The main gate should have two panels.

• The main door should not open inside the house.
• The doors in the house should not be noisy.
• The total number of doors, windows and ventilators in the house should be even in number for eg. 2, 4, 6 etc. but should not end with a 0 i.e. 10, 20 etc. If the front door frame is painted black, then the owner might have to face hardship.
• If the door has cracks or is too old, then the owner will have a tough time gaining respect in society.