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Realty mutual funds by year end
Land on the beds of seasonal rivulets costs five times less than at the prime location in Baddi.
— Tribune photo by Parvesh Chauhan
Loan pacts lack transparency Delhi suburbs burst at seams, says report TAX tips Buzz on Bourses
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Small price to hedge huge losses There is lack of awareness on household insurance products in India while these are quite popular in the West, says Manoj Kumar People, who spend lakhs from their life-long savings or take bank loans to construct dream houses, find themselves in a miserable condition, when their houses or properties are damaged by fire, flood, earthquake or burglary. Although they can avail insurance by spending, say between Rs 500 and Rs 1,000 annually, to insure property and household items against all unforeseen incidents, yet most of them do not prepare themselves for such situations. It is despite the fact that with the onset of monsoon, thousands of houses across the country would be marooned. People in Mumbai have still not forgotten last year’s experience when large parts of the metros were inundated resulting in loss of property worth crores. Presently, a large number of public and private insurance companies like Oriental Insurance, United Insurance, ICICI Prudential and HDFC offer insurance products at a decent price. Property dealers admit though people are forced to take insurance on home loans by the banks to protect repayment in case of death of the borrower or some mishap, yet there is lack of awareness on household insurance among the masses. Says Harish Jaiswal, a property consultant: “I have been in real estate business for the past many years, but have rarely come across household insurance taken by a client. Our feeling is that in case of floods, earthquakes or other natural disaster, the government would compensate the victims.”
Household insurance can be taken to cover the risk of fire, lightning, explosion, damage from aircraft, riots, floods or earthquake to the building and household items. Companies like Bajaj Allianz guarantees that at the time of loss, the claim would be settled without applying depreciation. Secondly, one can avail insurance to cover the risk of burglaries and thefts. Sum assured would be the market value of the property, but would not cover damages to the motor vehicle for which separate policy is available. Says Sunil Mathur, Assistant Manager, United Insurance: “One can take insurance to cover the risk of fire by paying just Rs 50 annually for a sum assured of Rs 1 lakh, and Rs 240 annually to cover the risk of burglary at home. However, same household items would be covered under the fire and burglary policy.”
Insurance companies also offer policy for precious jewellery and stones to cover all risks even if kept in a bank locker. The average annual premium on jewellery insurance is around Rs 100 for a sum assured of Rs 1 lakh. Otherwise, they can be insured as part of the household policy provided the value does not exceed, say 10 per cent of the total sum assured. Insurance companies admit although such insurance products are quite popular in the West, yet in India they have still to gain momentum. In the urban areas, people spend a lot of money on electronic items like computer, TV, DVD and other items. Policies are also available for them. “The average premium for covering risk against breakdown of appliance is Rs 2.50 for Rs 1,000 sum assured. In case, one takes comprehensive policy, the company offers 15 to 20 per cent discount on premium as well,” Mathur informs.
Claims Insurance agents warn that in case one does not take precautions for filing the claims it would not be easy for them to settle the dues. For instance, the loss or damage should be reportedly immediately to the insurer, and in case of theft, an FIR should be registered with the local police station. Consequently, the insurer arranges for inspection of the damaged items. A licensed surveyor is deputed for major losses. In case, the cause of loss is not established, it is for the insurer to ascertain the value of the damage. Notably, builders also take insurance cover for the housing complexes while the construction is going on. JB Goel, Chairman, Express Builders Ltd., points out that insurance company is generally approached by the builder, which offers insurance for a premium of Rs 2 to 3 per square feet.
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Realty mutual funds by year end All prominent mutual funds (MFs) are looking to offer realty funds to retail investors, the norms for which were announced by SEBI earlier this week. The Unit Trust of India (UTI), Prudential ICICI, Franklin Templeton are among the major fund houses who are looking at entering the sector, according to market observers. However, none of the major houses are making any major statement since they are still studying the guidelines. “Mutual funds will study the guidelines and then put up proposals before SEBI which would then have to be approved,” says a senior official from the UTI. The public sector mutual fund operator is likely to come up with a realty fund by September-October, according to sources. Among the investment avenues open to the realty mutual funds include direct investment in real estate properties, mortgage backed securities equity shares/ bonds/debentures of listed/ unlisted companies which deal in (real estate) properties and also undertake property development and in other securities. SEBI guidelines state that realty funds invest a minimum of 35 per cent of their portfolio in real estate properties. However, real estate mutual funds would not be able to invest in shares of companies that do not deal in realty. In other words, if the property market hits a downturn, investors in realty mutual funds would have to rest satisfied with the low returns offered by debt instruments and government securities. Mutual funds are, however, likely to sell these schemes to investors as an opportunity to profit from the real estate boom. “Investors can put in from Rs 5,000 to Rs 5 crore on these mutual funds and also diversify risk,” says Sushant Desai, a chartered accountant and investment advisor. A few mutual funds are, however, sceptical about declaring NAVs (net asset value) daily, as directed by SEBI, since the value of investments in ongoing projects cannot be calculated every day.
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Living in the middle of rivulet Throwing all norms to wind, housing projects and even industrials units are coming up on river beds, irrespective of the consequences of natural calamities. Such trend abounds in the upcoming satellite townships and industrial belts of Chandigarh. The faces of the upcoming township — Zirakpur, Dera Bassi, Banur, Rajpura, Kharar, Nayagaon, Pinjore, Barotiwala and Baddi — around Chandigarh have witnessed a drastic change with constructions coming up on low-lying areas and even on the beds of various seasonal rivulets. With the fear of gushing water gone due to construction of various dams, these river beds are the cheapest possible ‘land’ available in Punjab, Haryana and Himachal Pradesh where, otherwise, the prices have skyrocketed. Land on the beds of seasonal rivulets and choes is available anywhere between Rs 10 lakh and Rs 30 lakh a bigha in Baddi. The prices of prime land in this village-turned-town, otherwise, varies between Rs 50 lakh and Rs 85 lakh per bigha depending upon the location from major urban centers in Himachal Pradesh. Investigation reveals that the land on the river beds is either common (shamlat) or is the government’s property. The owners, village panchayats or some individuals, can sell their share to any buyer. In a majority of the cases, the state governments have not carried out any survey to identify lands and illegal occupation. There is no policy on change of land use on dried up choes, thereby increasing the demand of these easily available land of throwaway prices. The land in low-lying areas has also been attracting investors because of lesser price. Haryana Urban Development Authority has been allotting land to different housing societies and holding draw of plots along the Ghaggar comparatively at about 5 to 10 per cent less prices against the prices of land in prime locations in the city, especially sectors adjoining Union Territory, Chandigarh. A survey by The Tribune reveals that while the land along the main road and highways in Zirakpur, Mohali and Kharar is available for Rs 7 to Rs 9 crore per acre, the rates of land on the links roads and low-lying areas is between Rs 1 and Rs 3.5 crore depending upon the topography. Land on the low-lying area areas (village ponds) and on the bank of seasonal rivulets has been selling from Rs 1 crore to Rs 2 crore per acre in Kurali, Kharar and Ropar while rates of land on prime location varies from Rs 5 crore to Rs 7 crore in Kharar and Ropar, claims Jaspal Singh, a Kharar-based developer. Bhupinder Singh Saini, a Dera Bassi based property dealer, claims that a majority of the village common lands and ponds, have been sold off by villagers to earn a fast buck.
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Ambika Sharma writes how evasion of stamp duty is lowering government rate of land With property prices registering an all-time high in the industrial area of Baddi-Barotiwala-Nalagarh, the evasion of stamp duty is also at the highest. This has created a situation where government rate, which is an average price of the land deals registered in a year, are much less than the rate of property sold privately. This evasion has been prompted by the fact that Himachal has higher stamp duty as compared to those prevailing in neighbouring Panchkula and Chandigarh. The Haryana Government has fixed the stamp duty at 8 per cent for males, 6 per cent for females and 7 per cent, if the land is bought in partnership by a male and female. In Chandigarh, this rate is as low as 6 per cent while in Punjab, it is 9 per cent. Himachal, on the other hand, has a stamp duty of 10 per cent. This, too, was reduced about a year back from its earlier 12 per cent. A Nalagarh-based property dealer said: “This high rate encourages realtors to make land deals at lower prices. At times, the difference is so striking that a land deal is registered at less than one-third its sold value.” An adverse fallout of this system is reflected when the government agencies come forward to acquire land. Often land compensation is granted at the prevailing government rates. Even if the cost of land sold privately is higher, the government agencies prefer to grant compensation as recorded. This has often led to disputes between the villagers and the government. In a recent case of land acquisition at villages Mandhala and Kalujhinda, the villagers resented land acquisition by the Himachal Pradesh Housing and Urban Development Authority (Himuda). The dispute arose over the low compensation, which was at a par with the prevailing government rate. While the government rate was Rs 1.30 lakh per bigha for Kalujhinda and Rs 1.69 lakh per bigha for Mandhala, the villagers had been selling land for as high as Rs 10 lakh to Rs 15 lakh per bigha. It was after much protest that the villagers managed to get a rate of Rs 7 lakh per bigha. Similarly, the government rate of land at Katha was between Rs 10 lakh and Rs 15 lakh per bigha while privately it was being sold for a price ranging between Rs 30 lakh and Rs 40 lakh per bigha. Officials of the Revenue Department while agreeing to the prevailing practice said this was more prominent among land deals taking place among locals while renowned industrial houses preferred to pay the entire amount. It reflected more in cases where the property dealers bought land from local agriculturists to sell it later at higher rates. “Such deals took place under agreements, which are attested by the notaries, and the revenue officials could do little to detect them. The revenue officials could only ensure that the registration of land doesn’t take place at rates lower than the government rates,” confides an official. A senior revenue official, however, said: “The government is seized of the matter and had constituted a committee headed by the Deputy Commissioner for each district. The SDMs and tehsildars have been directed to access the rates of their respective areas. Rates of land, along the national and state highways, are to be estimated as per the market rate. The officials would ensure that in case a single land deal is made at a higher rate than the prevailing government rate, the higher rate would be fixed.” “This trend is more noticeable in the Nalagarh-Baddi-Barotiwala industrial belt where the MNCs chose to register land at actual land price while the small entrepreneurs and local property dealers evade tax. They indulge in getting land deals registered at much lower rates thus keeping the government rates lower.”
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Quake-resistant construction is the latest trend in Kangra, Chamba and Hamirpur districts, says Vibhor Mohan Let your house be an ivory tower, keeping you safe even if an earthquake crumbles down every building in the neighbourhood. With an escalation of nearly 30 to 35 per cent in the cost of construction, more and more residents of Kangra, Chamba and Hamirpur districts, living in the highest-risk seismological Zone V, are making their houses earthquake resistant. Advanced software are now available with architects, which plan out the anti-earthquake features for a house the moment the map is fed into them. As awareness about quakes spreads, increasing number of people in the three districts are now going in for earthquake-resistant homes. Besides, even the existing houses are being made safe with retro features under expert guidance. Dr Manish Saroch, an ENT Surgeon at the Dharamsala Zonal Hospital, says even though the use of steel had gone up to nearly three times as the under-construction house would be four-storeyed, yet the quake-resistant design is worth it, given the safety it provides to him and his family. “Just like the walls and roof of a bus are properly joined together so that it doesn’t give in on bumpy roads, it is important to glue together the walls and roof of the house with 12 mm steel bars. The ends of the bars should overlap by 15 inches,” says Rajesh Thakur, a Dharamsala-based architect. “In the case of existing houses, refitting does not cost much. Despite this, only 10 per cent of the people go in for anti-earthquake features outside the municipal limits due to lack of awareness,” he says. Within city limits, many upcoming educational institutions are going in for earthquake alarm system so that the building could be evacuated in case of an eventuality. The rough cost of the entire alarm comes to over Rs 30,000, which is very sensitive and reads the seismological vibrations. The alarm system, which includes springs and isolators, has to be mounted at a specific point inside the building. “Even though the awareness level about building earthquake-resistant homes has increased, the district administrations can do a lot more to spread awareness among masons and builders so that the owner gets the right guidance. There is also a need for more effective monitoring of new constructions to make sure that builders stick to the anti-earthquake specifications,” says P.P. Raina, a retired Divisional Town and Country Planner. In the last century, this part of the state has witnessed over 220 earthquakes of different magnitudes. Divisional Commissioner B.K. Aggarwal says they have tied up with the National Institute of Technology (NIT), Hamirpur, to give training to government engineers and a compressed curriculum has been specially prepared for this purpose. It has a duration of 2 to 3 weeks. Besides, an awareness campaign has been launched for the general public in rural areas. For this, the neighbourhood masons were being trained on how to make buildings earthquake-resistant. Some of them would be identified as master trainers so that they could further disseminate the knowledge. |
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DESIGNER’S
corner A.P Singh focuses on trendy and contemporary interiors If you are struggling with the concept of ‘modern’ interiors and further perplexed by what’s considered contemporary, then don’t worry since you are not alone in this confusion. With more emphasis on home design today, it can be difficult for homeowners to distinguish between the arrays of design styles. Contemporary or ‘modern’ designs are characterised by clean lines without intricate details, primarily smooth surfaces but carry textured or fusion work with great élan too. However, that doesn’t mean your home will look stark, cold and sterile. Gone are the days of boxy furniture and eccentric decorating. Today’s updated contemporary look is a blend of comfortable, liveable elements that create a sophisticated, fresh feel. Contemporary design is offset by neutral colour palettes. When painting the walls, choose shades of brown, taupe, cream or pure white. However, neutral does not mean boring, so be sure to infuse the room with small splashes of a more vibrant, bold colour. This may include painting one wall with an accent colour, adding a bold red sofa, or adding vivid accessories, such as decorative pillows, towels, rugs or art. Just be sure not to over-accessorise since the key to contemporary design is sheer simplicity. Stainless steel, nickel and chrome metals are prevalent in contemporary design, providing a decorative framework of sleek finishes. Furniture, end tables, lamps and even bathroom fixtures featuring beautiful metal accents provide this look in all rooms of the home. Bathroom suites could feature clean, geometric lines, a high-arc spout and chrome and brushed nickel finishes. Plus, with accessories, such as a robe hook, decorative tank lever, towel bars, and glass shelf, it’s easy for homeowners to coordinate the urban, stylish look throughout the entire room. Offset the clean, smooth lines of the metal accents, using fabrics such as silk, crushed velvet, linen, wool and leather in your room to add texture and create a more natural, inviting feeling. In the bathroom, this may include fluffy rugs, towels or elegantly simple shower curtains. In family rooms, this could include over-stuffed but not gaudily fancy pillows, neater window treatments or sedate but interestingly textured or patterned furniture upholstery. Texture can also be added to walls. Linen wallpapers are an interesting way to add depth to vertical surfaces of the room. Use leather instead of wood for panelling. Stay away from elaborate patterns or intricate details when choosing fabrics. When it comes to wood surfaces, contemporary designs bring out the extremes, featuring very light or very dark tones. Wenge with maple, cedar with walnut, ash with oak are some of the combinations quite popular to achieve the two-tone look. When incorporating woods into your design, look beyond the coffee table and flooring to utilise wood surfaces in accessories such as picture frames, large dramatic flowerpots or shelves. Feel free to mix the design styles of the wood accessories, but be consistent with the wood tone and carry it throughout the room for a professional appearance. Glass can be easily incorporated in practically anything around the house. Think beyond the usual traditionally stained glass designs for the windows. Let Picasso or Monet take the centrestage in a window panel rather than on the wall. Create false ceiling with glass spreading diffused lighting in your bar. Fix large panels of sandblasted glass instead of brick wall? Glass bricks are sturdy enough for your staircase, glass slab works wonderfully as worktop counters in the kitchen. Glass bricks used on the walls invite nature into your home. Choose inspiring lighting for your home in clean lines. Track lighting, floor lamps, uplighters contrasted with down lighters are popular in contemporary design and often utilize metals or bold colours to reinforce the other metal accessories or splashes of colour incorporated into the room. Hang an art piece rather than a chandelier in a double height lobby. Guess you are well on the path to creating a sophisticated, yet contemporary-styled home.
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Loan pacts lack transparency Even the documents are made available to the customers after the loan is sanctioned. Moreover, the loan agreement lack transparency. Lenders also reserve their right to revise the terms of the agreement, including interested rate even on fixed loan agreements. This is especially in case of private sector banks. The number of homeowners with outstanding home loans is inching closer to 1.5 million mark. The agreement appears to be lopsided. Loan agreement gives the bank sweeping rights. The condition states that the bank shall in relation to the home loan have the sole right to amend any of the terms and conditions of the agreement, including but not limited to revision of interest rate and even methods of charging interest rate differ from bank to bank. Customers remain confused and come to know of this only after two or three years. Banks, sometimes, try to change certain agreements without giving any notice to the customer. More interesting are the different ways in which banks interpret loan defaults. These types of interpretations are available in public sector banks also, what to talk of the private ones. A default occurs when the borrower dies or is divorced and/or where the loan has been provided to more than one borrower. The bank agreement also contains a cross collateral clause, where the bank reserves the right not to release the collateral, if there are outstandings by the borrower under any other financial facility available by the bank. Banks face more difficult situation when a loan is sanctioned to newly-weds (both being in service) and, in later stages, if they get divorced. It would be easier for a customer to choose between products if there were standard home loan agreements. However, banks disagree on the grounds that this might impinge upon customer choice. Accordingly, the standard loan agreements can be available in perfect market. Market forces ensure that there are more than adequate choices for the consumer, yet there is no mechanism to ensure that conditions are not loaded against the borrower. The writer is a banker
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Delhi suburbs burst at seams, says report The population of Delhi has more than doubled since 1975 with most of the Capital’s growth concentrated in the suburbs of Faridabad, Ghaziabad and Gurgaon, according to a report. While the national capital’s population has risen from a mere 4.4 million in 1975 to 12 million in 2000, it is projected to almost double by 2010, the report carried in the latest issue of Newsweek said. A photo atlas comprising satellite images of the world’s major cities released by the United Nations Environment Programme (UNDP), which forms the basis of the report, shows mankind’s impact on the planet, from major deforestation to urban sprawl. Mexico City mushrooms from a modest urban centre in 1973 to a massive blot on the landscape in 2000, while Beijing shows a similar surge between 1978 and 2000 in satellite pictures. Delhi sprawls explosively between 1977 and 1999, while from 1973 to 2000 the tiny desert town of Las Vegas turns into a monster city of one million people, placing massive strain on scarce water supplies, Newsweek reports, analysing the images. Beijing mushroomed from a small central area to one that has turned towns such as Ginghe and Fengtai into suburbs. The expansion is seen to have also gobbled up the forests to the west and the rice, winter wheat and vegetable plots that once surrounded the city. It has undergone tremendous growth since the start of economic reforms in 1979 and its population now numbers some 13 million.
— PTI
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TAX tips Q. You had mentioned that an NRI/PIO cannot buy agricultural land/ plantation out of proceeds of foreign money. Kindly let me know the status in the following case: Can an NRI buy agricultural land and/or plantation by selling (out of the proceeds of) another agricultural land/house situated in India? — Sameer, Nabha A. In terms of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000, an Indian citizen resident outside or a person of Indian origin is not allowed to buy the agricultural or plantation property in India. In my opinion, therefore, the transaction cited by you would lead to the same proposition which is not permitted by the aforesaid regulations. Rental income Q. Please let me know the correct rate at which TDS, including surcharge and educational cess, is to be withheld by a tenant if landlord is an NRI individual. What legal remedies are available to the landlord to reduce TDS if it is more than his total tax liability? —
Mangat Rai A. The tax deduction at source in respect of rent is provided for by Section 194-1 of the Income-Tax Act, 1961 (the Act). However, this section applies to payment made to a person who is a resident in India. In the case of a non-resident, tax will be deducted from the rent under Section 195 of the Act. The Finance Act for a fiscal year prescribes the rates at which the tax has to be deducted at source from the income of a non-resident individual. The prescribed rate for 2006-07 is 30 per cent. I may add that in case the country, in which the non-resident individual is based, has entered into a double taxation avoidance treaty with India and the rate prescribed under such treaty is lower than the rate of 30 per cent, the same shall be applicable in respect of payment of rent made to a non-resident individual. The non-resident individual can make an application under Section 195(3) of the Act to the assessing officer for the grant of a certificate authorising him to receive such rent without deduction of tax at source. The assessee, i.e. the person deducting the tax at source, can also make an application to the assessing officer under Section 197(1) of the Act, for deduction of income tax at a lower rate from the rent payable to a non-resident individual. Clubbing gains Q. I purchased a plot on January 17, 1977 for Rs 500 at Bathinda. This plot has been sold on October 24, 2005 for Rs 6 lacs and has been specified as a house in malba (ruins) form. Today it is a vacant plot. I am a senior citizen and my professional income ending March 31, 2006 is about 1.5 lakh and tax is deducted by the employer at source. Would the capital gain be clubbed with my total income or separately assessed. Kindly work out my gain and tax liability for advance tax payable on March 15, 2006. Also, please advice on professional income + capital gains and tax payable in total. — J.S. Madahar A.
The capital gain on the sale of a plot will be assessed separately at the rate of 20 per cent + education cess @ 2 per cent on such tax. The same will be calculated by taking into account the market value of the plot as on April 1, 1981. As the details thereof are not available in the query, it is not possible to compute the tax liability in respect of capital gains tax. Your professional income being less than Rs 1,85,000, i.e. the maximum limit up to which tax is not payable by senior citizens, no tax will be payable by you on the professional income of Rs 1.5 lakh. Two accounts Q. I am a government pensioner but not a senior citizen. My income during the current year i.e. 2005-06 from different sources shall be as under. Kindly let me know my tax liability and advice for investment to save income tax. (a) Pension income
Rs 1,25,800 Interest income (b) I purchased a HUDA plot for which total amount paid by me towards cost is Rs 6,19,000 and on account of penalty for late instalments is Rs 1,90,000 which works out to Rs 8,09,000. Thereafter, plot has been sold for Rs 10 lakh during the current year i.e. during January, 2006. (c) I intend selling my ancestral agricultural land, in a village during March, 2006 and total income shall be Rs. 14.50 lakh. (d) Shall I have to open separate accounts for those at Sl.No. (b) & (c) on the basis of above? Please advice me how can I invest the money and in how much period to save income tax? Can I gift post money to my children - or invest in capital gain bonds such as NABARD etc. — D.K. Talwar A.
The answers to your queries are as under:- (a) The tax payable on your total income of Rs 1,66,800 for assessment year 2006-07 would be Rs 8,947, including education cess of 2 per cent. (b) You have not indicated the date of purchase of HUDA plot. Therefore, it is not possible to ascertain whether capital gain on the sale of plot will be a short-term capital gain or a long-term capital gain. In case the plot has been held by you for a period of three years or more, the capital gain would be a long term capital gain. In such a case indexation would be allowed so as to work out the indexed cost which will be deductible from the sale price of Rs 10 lakh to compute the long-term capital gain. Such capital gain would be taxable @ 20 per cent plus education cess @ 2 per cent on such tax. In case, the plot has been held by you for a period of less than three years, no indexation would be allowable and the difference between the sale price and cost price would be a short-term capital gain and would be taxed at the normal rates of tax. (c) With regard to the sale of agricultural land, it will have to be ascertained whether it is covered within definition of the capital asset. If it is so covered the capital gain on sale of agricultural land would be a long-term capital gain and have to be computed with reference to the cost of acquisition of the land. In case the land was acquired before April 1, 1981, the cost as on April 1, 1981, will to be taken being the base year provided by the Act for the purposes of indexation of the cost. The cost price as on April 1, 1981, will be indexed for the purpose of ascertaining the indexed cost as on the date of sale, which shall be deductible from the sale price of the agricultural land so as to compute the capital gain. The capital gain would be taxable @ 20 per cent plus education cess of 2 per cent. In this regard, I may also invite your kind attention to the reply given in response to a query of Sh. Hari Om as published in the columns of the Tribune dated June 24, 2006. (d) It will be better to keep the accounts of two transactions separately. The long-term capital gain can be invested in capital gain tax savings bonds within six months of the date of sale. If the gain is so invested, no capital gain tax be payable. The gift to your children would not entitle you to any tax saving. Interest rebate Q. I am a Central Government employee and a tax payee. I have taken Rs 7.5 lakh house building advance from the Government of India. Detail of total interest accrued on account of monthly instalment towards the repayment of principle amount of H.B.A. @ of Rs 7,500 per month is as mentioned: (b) If yes, let me know the interest deduction allowable on accrual basis for the assessment years 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 if the interest accrued for the period prior to previous year in which the construction was completed (i.e. 28.02.2004) is Rs 97,869 i.e. Rs 32,025/- and Rs 65,840 for 2002-03 and 2004-04, respectively. —
Arvind Panwar A. The deduction for interest payable is allowable against income from house property under Section 24 of the Act. Accordingly, you will be entitled to a deduction of the accrued interest which is payable by you on loan raised for the construction of the house. The deduction allowable on accrual basis for the relevant assessment years 2005-06, 2006-07, 2007-08, 2008-09 & 2009-10 would be as under:-
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Prozone to tap equity markets New Delhi: Mall developer Prozone, a wholly-owned subsidiary of Provogue (India) Ltd, has said it would invest close to $1 billion for building malls across India over the next five years which would see the company tapping equity markets for raising funds. “The total investments that our expansion will have would be $2 billion. Of this, we will invest half while the rest will come from our joint venture partners,” Prozone CEO and Director Provogue Tim Enyon said here on the sidelines of a retail summit, The Shop.
— PTI Inorbit Malls to invest New Delhi: Bullish on the growth of retail sector in India, Raheja group company Inorbit Malls has said it would invest around Rs 1,500 crore over the next three years to build malls in west and south India. “We plan to build ten malls in the next three years and would be investing close to Rs 1,500 crore for this,” Inorbit CEO Yogesh Samat said. “We are looking into expanding into other cities like Hyderabad, Pune, Bangalore, Chennai in the coming months,” he said.
— PTI HDFC, L&T pact Mumbai: India’s leading housing finance company Housing Development Finance Corporation Ltd. (HDFC) has tied up with private sector construction and engineering firm Larsen & Toubro Ltd, (L&T) to raise Rs 950 million ($20.5 million) for joint real estate projects. HDFC will buy stakes in L&T’s realty unit, L&T Urban Infrastructure Ltd (L&T-UIL). While HDFC will hold 14.9 per cent equity, its real estate unit, HDFC India Real Estate Fund (HIREF), will hold 10.1 per cent equity in L&T Urban, a HDFC statement said here. HDFC India Real Estate Fund (HIREF) is a scheme of the HDFC Property Fund, a venture capital fund, which is managed by HDFC Venture Capital Ltd — a subsidiary of HDFC. HIREF has a corpus of Rs 100 billion.
— IANS Srinivasa Shipping Mumbai: Srinivasa Shipping and Property Development Ltd has entered into a Memorandum of Understanding with Spire Realty Hyderabad Retreat Ltd (SRHRL) for developing a residential township in Hyderabad. The company informed the BSE that it has entered into an MoU for developing the township of more than 90 acres and is also in the process of finalising the joint venture agreement for the project.
— PTI Satellite townships Chennai: Dubai-based Pegasus Realty LLC is looking for joint venture partners to set up satellite townships in Tamil Nadu, a top company official has said. Talking to reporters, Chairman Imtiaz Panjwani said the company was looking at setting up a joint venture with local builders and landowners for the purpose. The company was setting aside Rs 700 to Rs 800 crore for it and expected to start work on such a project by year-end, he said. The company is in the city to market its state-of-the-art high-end residences, Hampshire Residences in Kuala Lumpur.
— PTI DLF ‘Galleria’ in Jalandhar New Delhi:
DLF Retail Developers, the retail business unit of the DLF Group, has announced to develop retail plaza in Jalandhar— Galleria — paving way for modern retailing in Doaba belt in Punjab. With a 1.6-lakh sq. ft development area slated to be developed on Nakodar road, the location would definitely prove to have a competitive edge and a critical success factor for the retailers who wish to give their profits a multiplier effect. The Galleria makes eminent business sense for retailers to attract significant footfalls and potential customers to tap a vast prospective customer base from the immediate and surrounding community zones.
— TNS Rs 75,000-cr plans Kolkata: National Housing Bank (NHB), a 100 per cent subsidiary of RBI, will pump in Rs 75,000 crore as institutional finance during the next three years for construction of 15 million dwelling units in the country. Speaking to newspersons here on the sidelines of FICCI sponsored Banking Conclave NHB Chairman and Managing Director S. Sridhar said, however, despite this effort only about 30 per cent of India’s total demand for housing could be met since the total demand for individual housing in the country during the same period (2010) would be around 80 million.
— UNI |
Banks have become bigger home loan providers than housing finance companies. However, neither the Reserve Bank of India nor the Indian Banks Association has come out with a standard or model home loan agreement. As a result, there is a wide variation in the terms and conditions in home loan agreement and customers (home loan takers) are in difficult situation to make a choice as every financial institutions and banks have their own agreement.
(a) Confirm whether the interest rebate on accrual basis is allowable from the 2005-06 as interest is to be recovered only after the recovery of principle amount of house building advance.