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DLF will be building a hotel-cum-convention centre at the Park.
— Tribune photo by Parvesh Chauhan
Zooming in
on housing project developer From
healing to dealing! Property
balloon starts deflating Apartments
Act causes resentment Global
firms pump funds into India Bangalore
to have five satellite townships soon Estate
talk Amritsar
topography undergoes sea change
Self-shading
marvel Realty
IPOs to make India a property-driven market Designer’s
corner TAX
tips
Buzz
on Bourses
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Zooming in on housing project developer When completed, Rajiv Gandhi Chandigarh Technology Park (RGCTP) will be one of the biggest IT specific SEZ park in the country. It has been divided into three phases. The first phase, comprising 123 acres, is already ready and all land allocations has been done. The development of the second phase (comprising nearly 250 acres out of which 125 is the IT area contiguous to Phase I) is going on and five bigger units have been allotted land. The remaining 125 acres has been earmarked for Techno-Habitat Development Centre where housing for the IT employees and other community infrastructure will be put in place. “This phase has Chandigarh Housing Board (CHB) as the nodal agency and they are in the process of shortlisting the developer by floating global tenders. CHB is in the process to shortlist the developer so that world-class companies come forward to bid for the housing projects,” says Mr Manjit Singh Brar, Director, IT, Chandigarh. “The third phase of the IT Park will be spread in an area of 250 acres for which land acquisition process is on,” he says. The Administration has now allowed developers to construct build-to-suit sites and other large and small campus sites for IT companies by amending the allotment of campus sites in the Chandigarh Information Services Park Rules, 2002. “This was a missing link in our policy. What we found out during interactions with many companies was that most of the foreign companies, especially the US-based ones, were not interested in owning land in India. These companies sought a third-party arrangement where a developer would hold the land and construct the building according to the specifications of the IT company. They, on the other hand, took up the building on long-term lease basis from the developer. To have a larger pie of international world-class companies in RGCTP, the amendment in the rules was done by the Administration. This step has removed a major irritant amongst the international companies and it is expected that host of international companies will now invest in RGCTP. The idea is to cater to all spectrums of the IT industry,” he says. |
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From healing to dealing!
Doctors find real estate business more lucrative than clinics, finds out
Varinder Singh
Dazzled by over 300 per cent appreciation of prime lands of Punjab and lured by the unprecedented and unparalleled boom in real estate sector within a short span of about one year, every Tom, Dick and Harry has jumped in property business to make most of the hay till the sun shines. Small investors, shopkeepers, businessmen, doctors and even small and medium industrialists, who were otherwise seemingly disturbed over the declining graphs of their business due to increased competition in their respective fields till about a year ago, have found a new and more profit generating alternative in shape of land dealings. Their strategy is working as every third person in Punjab wants to lay hands on whatsoever property is available in the market. There is, however, one exception in this case, the NRIs, who have always been the biggest investors in property with their floating money in the entire business usually touching the mark of 40 to 50 per cent. They have slowed down their investment flow as they have adopted a wait-and watch-policy, mainly, keeping in mind the forthcoming assembly elections in the state. For the purpose to generate more money by way of putting in large amounts of money in shape of ‘advance money’ required for striking big land deals, such people have either formed groups or are moving all by themselves. The sole objective of the game is to reap richest possible harvest in shortest time frame. To realise this goal, to invest money in property for shorter periods of time and with an objective to reap the richest-ever possible harvest. Though all land deals are being done as usual after payment of partial advance money, but, what is new is that nowadays, ‘advance money’ and ‘balance payment time’ has acquired new dimensions as unlike in the past most of lands purchased on basis of ‘advance money’ are sold twice or thrice by investors during usual ‘balance payment time’ of one year. Investigations by The Tribune revealed that none of business or industry has witnessed the boom compared to real estate, which, has seen an average appreciation of over 300 per cent in a year’s time. The multiplication of prices of prime properties situated along highways, main roads and the ones adjoining to big cities like Ludhiana, Jalandhar, Patiala, Bathinda, Hoshiarpur and Amritsar, was even more fast and touched the amazing mark of even 500 per cent during past one year. The hike in prices of agricultural properties, however, hovered between 20 and 30 percent. This unexpected urban and semi-urban property boom, even much more than mutual funds and share market, which is triggered by advent of big Delhi-based companies to Punjab, has attracted people from all walks of life to property business. “Another factor is a recent decline in bank interest rates. Now every person, who, has a small spare amount has jumped in the property business,” says a property dealer from Jalandhar. According to his estimate nearly 500 new small and medium players have joined property dealing business in Doaba area of Punjab alone. The reason behind influx of fresh entrants in property business is partly the much publicised talk about some possibility of advent of certain mega projects to Punjab in future,” says Dr Balraj Gupta, another player in the field. “Actual users are few, but, investors have swarmed the market in a big way to reap easy profits and they are likely to stay in the business for some more time till profit graph remains upwards,” Dr Gupta adds. An interesting trend is that small and medium-range investors, including doctors, are going in for old houses, semi-furnished houses, SCOs, SCFs and small chunks of land. “Doctors, particularly, the ones having private clinics, a number of patwaris, deed writers and other revenue officials have opted for property business in such a big way that they have almost pushed most of the medium players out of the fray,” says a Hoshiarpur-based property dealer on condition of anonymity. Though, they may not have been into it purely for business interests yet a majority of over 350 owners of private hospitals of Doaba and that of Jalandhar, which has the highest density of hospitals and clinics in Asia, have interests in property. “Yes, both private as well as government doctors want to secure their future. So what is the harm if somebody earns money by investing at a place from where some income could be generated?” questions a Model Town-based doctor. Investors, according to real-estate players, always remain on a lookout for upcoming shopping plazas and colonies so that they can invest their money and convert it into a goldmine in the shortest possible time. According to a well-known private doctor of Jalandhar, between 70 and 100 ‘multi-faceted’ doctors are also trying their luck in property business, which, has increasingly been attracting their attention with each passing day. |
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Property balloon starts deflating
Supply is exceeding demand in Chandigarh’s periphery, observes
The property bubble has started bursting in Chandigarh’s periphery spreading panic among the builders, property consultants and investors. Nearly six months ago, the city’s periphery was literally a hot property with transactions, particularly one piece of land changing hands several times, a routine affair. In fact, the going is getting tough for consultants and investors with no hope of revival of the real estate boom witnessed in the past couple of years. However, property dealers put up a brave front terming this a “passing phase”, adding the prices were in the “correctional mode”. Independent inquiries, however, reveal that prices have started coming down by up to 20 per cent after touching a peak. A random survey of the periphery towns such as Zirakpur, Dera Bassi, Rajpura and Lalru revealed that the property transactions had drastically come down. In a majority of the cases where “biana” had been paid, the actual registrations were being “delayed” on account of the current fluid situation, sources said. A lot of speculative buying and selling had been taking place in this belt and now with the investors and property dealers adopting a “wait-and-watch” policy, the transactions had come down, the sources added. Recently, uncertainty over the exact area to be covered by the over bridge at Zirakpur and four-laning project of the Chandigarh-Ambala already had an adverse impact on the transactions of the commercial property along the Chandigarh-Ambala highway. Despite air of uncertainty being cleared, hopes of the realtors for an upswing in the prices had been belied. A property consultant at Zirakpur conceded on condition of anonymity that property dealers were passing through hard times. With few takers for the plots and flats, it is becoming difficult to conclude even the existing property transactions, he added. “The prices had touched the roof and the current slump clearly indicates that the prices were artificially jacked-up by the property dealer-investor nexus. The speculation, which had pushed the property out of the reach of the common man, is the thing of the past now,” said Mr S.L. Sharma, a market watcher. Meanwhile, the slump in the real estate market could also be gauged from the fact that a majority of the promoters, including mega projects, were going in for “pre-launch” booking of the residential plots and flats. This indicated that the advertised prices of the property were “inflated” and the supply exceeded the demand, the sources added. However, Mr Tarlochan Singh, a former president of the Chandigarh Property Consultants Association, claimed that the time March/April were usually lean months for property transactions. |
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Apartments Act causes resentment
Bonafide Himachalis see it as tool of harassment, says Rakesh Lohumi
The entry of the private builders in the housing sector has ushered in a new era in the real estate business in the hill state but inherent disadvantages like paucity of saleable land, shortage of water and the Land Tenancy Act, which debars non-agriculturists from purchasing land, are holding back its growth. The boom in the real estate business has been largely confined to the state peripheries like Parwanoo-Baddi-Nalagarh belt of Solan, Kala Amb area of Sirmaur and parts of Una district where a large number of industrial units are coming up in the wake of the package of incentives granted by the Centre. The prices of property have, indeed, soared elsewhere in the state too but on a lower scale. The private companies are keen to take up housing projects in the state as evident from the fact that as many as 104 of them have applied for registration since the implementation of the Apartments Act eight months ago. So far 45 companies have been registered. However, the four licences that have been granted till date are all for setting up colonies in and around the Baddi area. Another 10 licences are pending approval. The constraint of land is so severe in the state capital that on an average only 400 to 500 property transactions take place within the city annually, more than half of which pertain to transfer through succession or will. The main reason is the non-availability of suitable land within the municipal area. Further, the basic infrastructure facilities like water, proper roads and sewerage are lacking altogether or bursting at the seams. The real estate business is thus limited to sale of a few built up structures. Unlike plains the prices vary sharply depending upon the location as factors like accessibility, sunshine, open view and water availability come into play in the hill terrain. A house on the cold shady aspect of the hill invariably fetches a lower price. The prices of flats have over the past two years increased by 15 to 20 per cent. A two-bedroom flat now costs Rs 10 to 12 lakh and three-bedroom Rs 14 to 16 lakh. Some private builders have sold spacious houses for Rs 20 lakh to Rs 25 lakh depending on location. Most of the construction has been taking place on the outskirts of the city like New Shimla, Matiana, Pantha Ghati, Mashobra, Tutu, Hira Nagar, Kuftadhar, Kachighati, Puabo ,Dhalli and airport road. On an average 3,000 to 3,500 property sale deeds are registered in these areas annually. The Congress had merged some of these areas in the Municipal Corporation to check haphazard growth but the BJP government, which came to power subsequently, reversed the decision and instead constituted three nagar panchayats. These areas are bereft of basic civic amenities and as such hold no attraction for those who want to invest in property, yet the land prices have been shooting up as there is no alternative. The market price ranges from Rs 50,000 to Rs 1.5 lakh per biswa (37.55 sqm). Recently, a private builder acquired 20 bighas of land at Rs 1 lakh per biswa far off Moolkoti village near Mashobra. The present government has now decided to remerge these areas into the municipal corporation, which may improve situation a bit. The decision to open floodgates for private builders by enacting the state Apartments Act has caused much resentment among the non-agriculturists. It has virtually made the Land Reform and Tenancy Act redundant. It is being increasingly seen as an instrument to harass non-agriculturist bonafide Himachalis who have to run from pillar to post to obtain permission for purchasing a small plot for construction of house. On the other hand, the private builders are getting permission to acquire huge chunks of land without any hassles. Worse, the government proposes to further relax the land law to enable the builders to sell flats to outsiders. In recent years, most of the property has been acquired by outsiders who have influence to obtain permission, besides money to invest. They had earlier been using general power of attorney and “irrevocable will” to effect land transactions to circumvent the Tenancy Act. |
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Global firms pump funds into India India’s property market is luring global realty funds as the fast-growing economy boosts demand for office space, houses and shopping malls, but soaring prices pose a risk of a meltdown. Realty funds have assets worth about $4.7 billion in India, with industry estimates on growth varying widely from $30 billion to $90 billion by 2010. Analysts warn spiralling prices and interest costs, coupled with shoddy property transaction and ownership records, may sap demand and hasten the property bubble to burst. “There is hell of a lot more capital available than good transactions,” David Ellington, trustee at the San Francisco Employees’ Retirement System, said during his visit to India. “That is going to heat up the market.” California Public Employees’ Retirement System (CalPERS) ploughed $100 million into an Indian realty fund last month, while American International Group has launched a real estate investment division in India. A posh seafront apartment in south Mumbai was recently bought at the equivalent of $1,400 a sq ft—doubling from two years ago, and as expensive as an apartment in New York. Prices in big cities like Mumbai, Delhi, Bangalore, Kolkata and Chennai are rising at 30-40 per cent a year, boosted by scarce land and rising incomes in an economy that has been growing at about 8 per cent for the past three years — a trend that is expected to be maintained for many years ahead. The potential is huge for Asia’s third-largest economy, where demand for homes have jumped on the back of tax breaks and low interest rates over the past five years. India’s retail real estate market is expected to top $463 billion by 2010, from $292 billion in 2004, according to the property services arm of ICICI Bank Ltd., India’s second-largest lender.
Risks abound
High prices and rising interest costs could slow down demand and hasten the property bubble to burst, analysts said. “The housing finance-driven demand is under threat,” says Rajnish Rastogi at credit rating agency Crisil Ltd. “The banking sector has to move away from the metros (big cities) and start funding self-employed in smaller towns to keep it going.” Housing loan rates, which had halved to 7 per cent from a decade ago, have begun rising in the last four months driven as banks pass on rising cost of funds. Some loan rates have risen by as much as 150 basis points since the start of January, with the largest lender State Bank of India increasing rates by 50-basis points this month. “The same problem that happened to private equity is about to happen in real estate,” Ellington says, referring to a dotcom meltdown in the late 1990s when investors lost millions of dollars. A spate of new gleaming shopping malls in cities like Delhi pose the biggest threat to the property bubble, analysts say. Many malls are letting out their premises for free to big retailers, hoping this would attract other firms to move in, but the strategy has not been working, they say. “I am very bearish on malls that exist in India,” US-based Subhash Bedi of Red Fort Capital LLC told Reuters. The company plans to invest $400 million in Indian real estate. “Developers are selling them like condos which won’t work.”
Investors are also worried about shoddy property transaction and ownership records that may result in litigations. “It is a wild card out there,” says Ellington, whose San Francisco fund has $15 billion in assets. Some of the legislation governing land is more than a century old, and rents and land holdings in some cities like Mumbai are capped, making transactions difficult. “The legalities... state laws, central laws can be a serious hazard as they can defer your returns by months and even years,” says Parimal Shroff, an advocate practising in civil disputes. India ranks 116th of 155 on a World Bank report on ease of doing business, 25 places below its emerging markets rival China. |
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Bangalore to have five satellite townships soon In a move to decongest Bangalore, the Karnataka Government has decided to establish five satellite townships and link them with a ring road and an intermediate ring road. The congestion has occurred due to massive investment in the city by IT companies. The government was unable to regulate adequate space for the IT industry and the manpower, which it was importing to the city, resulting in all-round chaos. The government is clear that it does not want more industries who have large land outlays any longer in Bangalore. Such industries are being advised to set up shop in Mysore and Mangalore. However, it understands that this is not enough and steps need to be taken to decongest the city. The Bangalore Metropolitan Regional Development Authority (BMRDA) Commissioner told The Tribune that the proposal for satellite townships was the biggest-ever project announced by the government. He said the project would be overseen by the BMRDA and will be undertaken in collaboration with the Centre as well as private players. The state government and the Centre will bear 25 per cent each of the total cost of the project and the remaining 50 per cent will be borne by the private players. The government has estimated the cost of the project at Rs 2,650 crore. It has decided to acquire 75,000 acres of land for the project and the acquisition process will begin in two months. The four townships will surround Bangalore and will be located at Nandagudi, Solur, Sathanur and Ramanagaram. Foreign firms will participate to acquire a stake in the townships, either through an Indian subsidiary or through joint ventures with Indian companies. The project will be completed in two years with the realisation period being five years. The townships will focus on information technology, bio-technology, finance, health and textile sectors. The townships will have independent helipads to cater to domestic air traffic needs and will have industrial and residential components. Provisions for health, education and recreation will also be provided so that they are self-sufficient in all respects. Both ring road and the intermediate ring road are being designed so that vehicles can run at a speed of 120 km an hour. The ring road linking the satellite towns will have a stretch of 285 km. It will also link the peripheral towns of Doddaballapur, Devanhalli (where the international airport is coming up), Dobbspet, Magadi, Ramanagaram, Kanakapura, Anekal, Sarjapur and Attibele to each other. The state government expects that the demand for land on the outskirts of the city from IT and industrial units will come down once the satellite townships are in place. |
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Estate
talk
Omaxe, a real estate major, has announced to tie up with the Reliance Group to offer customers a retail experience. Rohtas Goel, CMD, Omaxe Group, told TNS that to begin with the company would introduce Omaxe Connaught Place (OCP) at Greater Noida, a new age, post-millennium lifestyle facilities for the residents of the National Capital Region (NCR). “Reliance has already decided to ride the bandwagon,” he said. Reliance Industries Ltd (RIL) has chosen OCP for kicking of its retail foray. OCP has already leased out 1.2 lakh sq ft to the Mukesh Ambani Group. RIL is also in the process of signing up for the hypermarket format with Omaxe in other cities. The company is also coming up with an international shopping and entertainment mall near Ludhiana. Mr Goel said OCP would be one of the largest shopping-cum-entertainment malls to be constructed in the region. It will have a large-format hypermarket, eight screen multiplex, a family entertainment zone, a five-star hotel, and a modern office complex. “Omaxe has a vision for providing futuristic real-estate complexes in line with projected development and growth of civil society in particular and the nation at large,” he asserted. Encouraged by the market response, the company also plans to soon hit the stock market with an initial public offer (IPO) to finance its mega projects. Commenting on the Omaxe Mall, he said: “Omaxe has a vision for providing futuristic real estate residential and commercial complexes, in line with projected development and growth of urban socio-cultural infrastructure in particular and the nation at large.” Omaxe’s commercial ventures include Omaxe Plaza, Wedding Mall and House 2 Home (Gurgaon), Wedding Mall (Patiala), Omaxe Plaza (Ludhiana), Omaxe Arcade and NRI city centre (Greater Noida), Park Plaza (Indirapuram), Wedding Mall (Agra), and Citadel and Pearls Omaxe (Delhi). The company is planning more projects in Madhya Pradesh and Chhattisgarh, besides those at. Agra, Jaipur, Ajmer, Sonepat, Lucknow and
Faridabad. |
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Amritsar topography undergoes sea change Facility of international airport, expectation of implementation of Safta and immense possibilities of opening of trade with Pakistan and central Asian countries coupled with easy availability of loans resulted in real estate boom in this border town, which it had never witnessed before. Mushrooming of a number of legal and illegal colonies on the outskirts of the city proclaiming to provide best of the facilities to the buyers is a tangible signal for transforming topography of the city. As per the official data shortage of housing in India estimated to be at 19.4 million dwellings while experts believe that the actual shortage could be much more. So there is a huge demand for housing that has to be met. Shortage of houses is not only in the country but also in Amritsar. Mr Prabhujeev Singh Bajaj, Resident Manager, HDFC, quips “mortgage penetration is still about 4 per cent of the GDP — a fraction of other Asian countries that range between 10 and 30 per cent of GDP and the USA where the mortgage market is 51 per cent of GDP. There has also been a shift in the mindset of people going for loans for construction. Earlier, most people were averse to debt and looked at it as a trap. However, outlook and aspirations of the present urban middle class have changed dramatically with the availability of higher disposable income. It is evident from the fact that the average age of borrowers has also come down. Besides, there is also a rise in nuclear and split families. Financial experts are of the view that besides the changed mind-set, increased tax incentives, relatively lower interest rates would contribute to drive higher demand for housing loans. Meanwhile, a new trend is being witnessed in the city as more and more people from the walled city are opting for living in open places, which are free of the constraints of narrow lanes and traffic hazards and noise of the interior city. Also, people living in villages near the city have settled down here for the better prospects of education and livelihood, says Rajesh Bhalla, a real estate consultant. About the recent rise in home loans notwithstanding Mr Bajaj felt that there would not be any significant impact on the demand for housing loans. He said increase of 0.5 per cent translated to an increase in EMI of Rs. 30 against per lakh for a term of 20 years. If the tenure is less than the additional EMI amount would be even lesser. With the tax benefits being available on the interest paid by home loan customers, they would be able to claim additional tax benefits due to the increased interest outgo, he added. Therefore, the effective increase in the interest rate would be much lesser. For instance, a customer who is in the 33.6 per cent tax bracket, a 0.5 per cent interest rate increase would effectively be 0.33 per cent after calculating the tax benefit. He stressed that interest rates between 9 and 10 per cent were still much lower than what they were 10 years ago, which was 16 to 17 per cent. Recently property prices have risen in certain pockets of the city. Besides, the rise in property prices can also be attributed to better construction quality and provision of other amenities. He pointed out that demand for housing was owing to genuine buyers and not speculators. |
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Self-shading marvel
Solar geometry inspires Sidcul’s Cyber Tower in Doon Valley, says Girja Shankar Kaura
It will be the iconic building for the newly carved state of Uttaranchal and would act as an attraction for the others who want to be a part of 60-acre Information and Technology (IT) Park, which the Uttaranchal Government has planned just on the outskirts of Dehra Dun in an effort to attract BPOs and other multinational companies from other parts of the country. However the most striking aspect of the Doon Cyber Tower, the State Industrial Development Corporation of Uttaranchal Ltd (Sidcul) building would be its shape, which is the “world’s first computer-generated self-shading structure”. Being built by Delhi’s Morphogenesis Architecture Studio, a firm run by three young turks of the School of Planning Architecture — Manit Rastogi, Sonali Srivastava Rastogi and Bhardwaj — the building would cost Rs 80 crore and would be in shape for functioning by the first quarter of 2007. The beauty of this building is the fact that Manit Rastogi has created the software for the design of the building personally by working on the latitude and longitude of the spot where the building would come up. Manit, who has done his thesis in Convergence of the Contemporary Theories of Sustainability, Complexity and Cyber Space while studying in London, took into account the latitude and longitude of the spot for every minute of the day to work out the software for this “self shading building”. “Self-shading building is a design that leaves out the sun and the glare, but lets in only the light,” says Manit. To get through to this, one has to take into account the “solar geometry” of the planned architecture that factors in on latitude and longitude of the location, he adds. According to Manit: “There had been no work in this area and we created this online technology and what emerged was a ship-like structure”. We had to work around the theory that a ship’s morphology floats on water and is unstable on land. So the work started from the bottom and from the skin of the building to eventually take shape of a ship-like structure, he points out. The important part of the structure is the fact that the sunlight throughout the day would just “kiss” the surface of the building and not penetrate it anytime during the working hours. Since the building has a doubly curved surface, direct sunlight would never penetrate the body, which would remain suitably shaded during the daytime. The computer program for the building was created in-house and Morphogenesis Architecture Studio is now also looking at patent as there is no other such program or a computer-generated self-shading building anywhere in the world. The all-glass and all-steel building would also be lightweight and has been designed to be resistant to the seismic movements since Uttaranchal lies in the quake-prone zone. Most importantly, the architects have also carried out a “wind tunnel” test on the structure of the building. This, as the structure itself is aerodynamic, test would help the architects to know where more steel is needed to make it stronger against the wind and where less would be needed due to less pressure. The 30-metre tall building, the tallest in Uttaranchal, spread over an area of 5,00,000 square feet, has been designed to have maximum interaction with natural environment. |
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Realty IPOs to make India a property-driven market Once considered as the fly-by-night companies, the real estate companies are the new hits on the bourses. It is estimated that in next four to six months, this sector alone will bring in over Rs 20,000 cr Initial Public Offer (IPO) into the market. It includes Ansal API, Parsvnath Developers Ltd, Omaxe Group, and Ahluwalia Contracts (India) Ltd, besides others. The entry of the DLF group, which built the largest integrated township of Asia in Gurgaon, in the stock market to raise about $3 billion to $3.5 billion through a initial public offer (IPO) has the potential to make India a property-driven stock market, like Hong Kong and Tokyo. The company is expected to hit the market soon with its largest IPO ever by any Indian company. The company is to issue 18.71 crore new shares via IPO DLF has already filed the Draft Red Herring Prospectus for its proposed IPO with SEBI. If fully subscribed, the IPO will result in a floating stock of 12.77 per cent shares, diluting promoter KP Singh’s holding to 87 per cent from the current 99.5 per cent Post IPO, the projections are that DLF will have a market cap of over Rs 1,00,000 crore, and that its owner KP Singh will the richest Indian based out of India beating Azim Premji and Ambani Brothers. According to Colliers Jardine, real estate valuation and research firm: “The entry of DLF into capital markets would improve the stock market of real estate sector in India. With its high ethical standards and huge size, it is poised to change the way the world looks at the realty market.” After Reliance Petro, the stock market experts are putting great hope in the IPO. According to a senior official of the company, DLF has plans to invest more into building infrastructure and acquiring land for SEZ. The land acquisition programme is expected to cost Rs 6,500 crore, he said, while the completion of ongoing projects will cost about Rs 3,100 crore. |
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Designer’s
corner
A lot of dimensions can be added to it internally as well externally, suggests
A.P. Singh
Just because it is flat, does not mean you can’t add dimensions to it. Building society norms must not stop you from adding character to your flat. Discard thoughts that exterior designing is limited to houses or villas. Let’s take on the challenge of making a humble abode differentiate itself with pride and gleam from the rest of the block of flats. Have faith; it’s entirely possible, as has been successfully done at the new flat of a Senior Consultant with a leading hospital in Chandigarh. Confirming the importance of clarity of thought, at the very onset the owner shared her experiences of simple but stylish and beautiful Scottish cottages with architect. Outdoor loving and well travelled owner was also fascinated with French windows and inviting Italian streets. Her flat came with concrete exterior flooring but luckily offered ample parking. She desired to connect with greenery even though she had no luxury of private lawn. She also craved for a veranda in a ground floor flat, unheard of and frowned upon by many. The owner was connected with nature firstly by replacing hideous window grills with simple toughened glass, offering security with style. Two Georgian panels adorn main facade window to tempt England into the design. A multi-utility wrought iron corner piece can be used both for floral hanging baskets, ‘name plate’ or a birdbath. Small-sized tiles of handmade brick, mandana and kota have fashioned an exterior Italian boulevard flooring. Lack of garden space has been compensated with abundance of floor level terracotta potted plants and wall hung flower baskets. Magic lies in verandah where massive window has been created through sidewall exposing living room to the verandah. One wall has been given brick treatment with recessed niche and texture for the owner to keep marble busts, couple of dove figurines or even a golden peacock. Most practical element here is huge storage for inverter, gardening and cleaning equipment, kids’ bicycles even shoes. Flooring is polished kota and lighting is serene yellow on mellow coloured walls. Comfortable seating along with soothing self-contained water feature could be added to enjoy Hi-Tea with friends or watch the world go by. What takes the cookie in the verandah, however, is the magnificent and secure iron gate with fascinating grill design, mercifully without suffocating acrylic sheets. Wooden planks block prying eyes but blend in with walnut finish window frames and shutters of the flat. Despite restricted space available, an L-shaped green patch has been provided around the kitchen for stylish Japanese Garden or useful Kitchen Garden. The iron grill pattern has been aesthetically carried to fence off rear verandah from communal lawns. Aesthetically solid and stylish exteriors have pleasing colours with good backdrops of greenery and flowers. Excellent combination of design and utility, the weather proof and easily maintainable exteriors complement the warm English interiors of the flat. Only two regulations hindered the exteriors plan. Façade could not be painted in typical pastel Continental colours and gate’s grill design could not be replicated on first floor’s balcony grill, since exterior scheme had to be kept universal. Challenge is to find skilled craftsmen who can visualise your offbeat concepts and buying materials, which are easy to replace too. Add further English charm with climbing roses on trellis, horseshoe to ward off evil eye, wind chimes and most importantly, a letterbox. Expensive plants outside are a temptation to green thieves. Huge glasses will need constant maintenance. Double-glazing should have been considered since flat lies under flight path. Security system with cameras may be added to discourage intrusions. A complete success of an exteriors project conforming all norms and regulations, combining thorough application of mind on creating a look hitherto imagined impossible. The flat mirrors owners’ personality. It’s solid yet sensitive, aesthetic yet simple. So, what does your flat say about your personality? |
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TAX
tips
Q. I am government employee and have taken Rs 4.5 lakh HBA from HDFC for my own home and am paying Rs 5,136 pm as instalment. (i) Can I issue house rent receipt to my husband so that he can avail HRA exemption. He is also a government employee. I will add this (house rent receipt) income to my TDS as other income. (ii) Limit amount for tuition fee of children. — Saroj Rani A. Section 10 (13A) of the Act dealing with the exemption of HRA provides that the Section would not apply where the residential accommodation is owned by the assessee or where the assessee has not actually incurred any expenditure towards payment of rent. It may be possible to claim that technically you comply with the above exceptions, but I am doubtful whether it will be possible to convince the department as well as an appellate authority that a husband can have a relationship of landlord with his wife. I may add that Karnataka High Court in case of Patil Vijay Kumar vs. Union of India (151 ITR 48) has held that to claim such a deduction the relation of landlord and tenant must exist between the payer and the payee. You should, therefore, be prepared for the litigation on the subject.
Sectoral limits
Q. I am a government employee and my gross salary during 2005-06 will be Rs 2,70,000. (i) I will repay Rs 73,000 to SBI for the House Building Advance availed by me in my name in 2000 (Rs 38,000 as interest and Rs 35,000 as principal amount) (ii) I will pay Rs.32, 000 as tuition fee for my two sons (Rs 24,000 for the elder one and Rs 8,000 for the younger one). My question is: (a) What amount out of (i) and (ii) above, is to be considered under Section 80C of the Finance Act, 2005? Has the earlier limit of Rs 20,000 on HBA principal amount and Rs 24,000 on tuition fee been abolished? (b) How much income tax, will I have to pay during 2005-06 if Rs 1 lakh are invested under Section 80C? — Ripdaman Singh A. Section 80C of the Act as amended by the Finance Act, 2005, does not provide any sectoral limit. In accordance with the provisions of the said section an aggregate sum of Rs 1 lakh is allowable as deduction from the total income in respect of various amounts paid towards saving schemes and/or for repayment of housing loan etc. You would thus be entitled to a deduction of Rs 38,000 plus Rs 32,000 under Section 80C of the Act towards the repayment of house building advance as well as towards the payment of tuition fee for your two sons provided the tuition fee has been paid for an institution situated in India. These provisions are applicable for 2006-07. The limits of Rs 20,000 and Rs.24,000 laid down in Section 88 have now been abolished. In view of the fact that you would be entitled to a deduction of Rs 60,000 under Section 80C of the Act with regard to the aforesaid payments, you can invest another sum of Rs 40,000 in specified schemes so as to seek the deduction of entire amount of Rs 1,00,000 under Section 80C of the Act.
NRI land deal
Q. I am an NRI and have a plot in India, which I want to sell and buy a house in India. Is it possible for the purchaser of the plot who is an NRI to remit the money to my NRE account. I can then use that money to buy house in India. — Prashant Chadha A. It is possible for the Non-resident Indian to remit the money to the NRE account if the payment towards the sale of your house is made in foreign currency. It may, however, be a difficult proposition, as registration for sale of property will have to be done in India and stamp duty will have to be paid in Indian rupees.
Mother as owner
Q. Sarita is widow with one minor son aged five years. She has inherited a flat, which was given to her late husband in a family settlement. Now she wants to let it out. (i) Whether both are owners? (ii) If yes, how will the share of rental income of the minor be treated? (iii) Since rent will be about Rs 20 lakh per annum can minor’s IT Return be signed by his mother? (iv) Whether minor’s share would be clubbed with his mother’s income. — R.P. Bindal A. The issues raised by you would depend upon the date and terms of the deed of family settlement. If the family settlement has been made before the date of death of the husband and she has become the absolute owner of the flat by virtue of the deed of family settlement, the minor will have no legal right in the flat and, therefore, the questions raised would not arise. If the deed has been executed between the family members after the date of death of the husband, the answers to your question no. (i) and (ii) would depend upon the terms of the deed. As to question no. (iii), as per the Supreme Court decision, mother is one of the natural guardians and can sign the papers on behalf of the minor. The provisions of Section 64(1A) do not contain any exception for the situation referred by you in the query and therefore the income may have to be clubbed in case it arises to the minor. |
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Buzz
on
Bourses Chandigarh: Real estate company Lakshmi Vatika Ltd (LVL), currently managing several projects of over Rs 3,000 crore, has signed cricketer Yuvraj Singh as their brand ambassador. LVL spokesperson H. Bhatt said: “Yuvraj Singh is a young and energetic epitome of India.” The company’s forthcoming projects in the hospitality industry includes Kufri in Himachal Pradesh and mega projects in Mohali and Sonepat district.
— TNS
JMD forays into Punjab
New Delhi: JMD Promoters Ltd, one of the real estate developers in Delhi, has entered the Rs 3,000-crore Punjab real estate market by setting up JMD Govardhan City Centre in the heart of Ludhiana with a capital outlay of Rs 100 crore. The company is drawing up blueprint to enter other cities in the state. “Being the pioneers in business, we are set to create wonders in Punjab and take its infrastructure to the elitist level of progress,” Mr Sunil Bedi, Managing Director, JMD Promoters Ltd., said.
— TNS
NHAI inks deal for NH project
New Delhi: The National Highways Authority of India (NHAI) has signed a contract agreement with Nagarjuna Construction Company for four-laning of a 38 km stretch on Jhansi-Lakhnadon Section of National Highway-26 in Uttar Pradesh. The contract package is funded by ADB. The total project cost is Rs 140.39 crore.
— PTI
IALS on expansion spree
Bikaner: Travel and tour operator Indo Asia Leisure Services Ltd (IALS) will invest Rs. 200 million in expanding its hotel business in India in the next two years, apart from entering the e-commerce business. “Apart from our two existing three-star properties in Bikaner and Madikeri in Coorg, we are planning to come up with two more such properties at Hampi in Karnataka and Jaipur in Rajasthan,” Mr Sunirmol Ghosh, Director of IALS said. Mr Ghosh said that funds for the new investments would come from internal accruals and bank loans.
— IANS
Simplex gets 2 contracts
Mumbai: Simplex Infrastructures Ltd has secured two contracts worth a total of Rs 2.39 billion, the construction company said. One of them was a Rs 1.51-billion order to set up a water pipeline in eastern Orissa and the other for a building at Imphal in Manipur.
— PTI
GMR files prospectus
Mumbai: GMR Industries Ltd, the company that has through a consortium won the bid to modernise the Delhi Airport, has said that it has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offer (IPO). The company will raise Rs 1,000 to 1,500 crore through the IPO and private equity placement.
— PTI
Unity Infra to raise Rs 252 cr
New Delhi: Engineering and construction firm Unity Infraprojects is planning to raise Rs 252 crore from its forthcoming initial public offer for capital expenditure and loan repayment, besides foraying into power and port sectors. The company has set a price band of Rs 651-732 for its IPO of 34.43 lakh shares that closes on May 24, he said.
— PTI |
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Chandigarh and satellite towns anticipate another boom in housing sector as technology companies eye the region,
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