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Shocking real(i)ty
GROUND REALTY
Housing made affordable TAX TIPS
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TREND MILL ANOTHER male bastion is set to crumble in Haryana, a state notorious for the way it treats its women. This Women’s Day, March 8, a group of women would actually turn home makers in the state's first women’s cooperative group housing society. From lawyers to doctors, architects, academicians, administrators and other professionals, this society has a long list of women who have opted for the more unconventional way of setting up a housing society. As construction is set to begin at the Parvati Durga Cooperative Housing Society at the Mansa Devi Complex, housewife-turned-president Archana Sanghi is ecstatic. “The concept of a women-only society was to shatter the notion that a woman’s “karmabhumi” is only within the four walls of the house. It is the culmination of a virtually-impossible dream and would go a long way in empowering the women in the state,” Archana Sanghi, the brain behind the initiative says. “A society of women, by women and for women was not easy. It has been an arduous journey,” she says, recounting the challenges. The state-of-the-art complex, which would overlook the prestigious Rajiv Gandhi Technology Park, Chandigarh, would offer contemporary design and décor. All safety aspects, including fire safety and earthquake-resistance, have been taken care of. This coupled with basic amenities such as backup for water and power supplies, cross ventilation and solar energy have also been incorporated. Once ready, it would be wi-fi enabled and there would be an ATM and basic healthcare infrastructure within
“Even though she is the acknowledged homemaker, the woman is rarely kept in the picture when discussions are held for purchasing property. In fact, they are relegated to the background and told that their domain is the kitchen,” says Sanghi. In fact, financial independence of women as an offshot of having a home in their name was at the back of the mind of Sanghi while conceptualising the dream project. “With the changing times, women have forayed into numerous fields. We have adhered to the principle of one unit, one member to realise the dreams of maximum number of women,” Sanghi says. Does it make sense to start construction in the dismal scenario? The indefatigable entrepreneur has an interesting answer, “Housing is still a basic need in India. The slowdown would not have much impact on the real estate sector, particularly in a city like Chandigarh which offers world-class standard of living at Indian prices.”
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Giant leap for realty
Good for many AS of now, there are some 80 approved colonies in Ludhiana spread over an area of around 3,600 acres. If the conditions laid down for approval of a colony are taken into account, an estimated 150 new colonies over 2,500 acre and under different stages of development could be authorised on payment of development charges. EVEN if the relief announced by the Punjab Government in colonisation norms under the Punjab Urban Planning and Development Board Act is viewed as an election sop, it is sure to benefit a large number of existing unapproved colonies all over the state and lead to better regulation of urban development and enforcement of laid down laws. Bowing to persistent pressure from small colonisers and property developers, the state government has slashed the limit of minimum area for approval of a colony from the existing 75 acres to 25. Existing colonies would also be regularised on payment of external development charges of Rs 400 a square yard. Notwithstanding, the existing unapproved colonies will have to meet certain conditions like 30 feet wide roads, five per cent green belt and open space like a playground for community use before regularisation. Ludhiana Property Dealers and Colonisers Association president and BJP activist Kamal Chatley says that the government has taken a step in the right direction. “With the minimum area required for approval of a colony being 75 acres, the previous policy was detrimental to the interests of small players in the real estate sector. In fact, the sheer land area and huge external development charges of Rs 35 lakh an acre were a deterrent in the way of regulated growth of urban colonies,” he said. Greater Ludhiana Area Development Authority chief administrator A.K. Sinha agrees that the relaxation of norms will facilitate approval of more colonies. “Greater number of colonies would automatically mean assured external development facilities like roads and sewerage system for lakhs of present or future residents of these localities,” he said. Justifying the external development charges, chief administrator Sinha said, “The external development facilities for an approved colony are capital intensive. With approval of more colonies all over the mega city, the authority will have to lay 80 km of new main sewer lines. Each kilometer of sewer line costs over Rs 2 crore. Not only this, in some colonies where approach roads are not proper, the authority
may even have to construct roads." The change in the policy has come as a big relief to developers of hundreds of colonies sitting idle for last several months after being directed to stop all work in unapproved colonies. Said R.S. Grewal, a coloniser on Ludhiana’s Pakhowal Road, “We suffered huge losses and even ran the risk of losing all our investment after the Greater Ludhiana Area Development Authority put up signboards saying our colonies were unapproved. But relaxation in norms has given us a new ray of hope,”
Grewal said. Chatley was confident that development of more approved colonies with assured internal and external development as per norms would automatically curb the tendency of carving out unapproved colonies in urban areas of Punjab. “See, once the existing unapproved colonies are authorised, there is no room for further development of unlawful colonies. Now regulated urban development will get a big boost in the state,” he said.
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Shocking real(i)ty
IN the aftermath of 26/11 Mumbai attacks, deteriorating Indo-Pakistan relations and the current economic slowdown, real estate prices have taken a severe beating in the border town of Ferozepur. Several important projects have also either been cancelled or shelved for the time being. Land prices along the Ferozepur-Hussaniwala Road had escalated to Rs 20 lakh an acre in anticipation of the border being opened for commerce and transit. Down by half, these now fluctuate between Rs 8 and 10 lakh. Several real estate dealers, who had purchased land along this road in the hope of striking gold, find themselves at the receiving end. Prices of agriculture land have also dropped considerably, especially along the border belt. Major companies like Reliance had expressed interest to establish some projects here and had even purchased land on Ferozepur-Moga Road, but the project has reportedly been cancelled now. In the cantonment area, notwithstanding revocation of the ban earlier enforced by the district administration against registration of sale deeds, there are no deals being materialised. Property consultant Sanjay Gupta said that there were neither buyers nor sellers. Most colonisation projects have also failed to take off, he said. “Only two projects have come up: Krishna Enclave on GT Road and Gilco View on Zira Road. No realtors have expressed any interest in this area,” he said. Apart from falling real estate prices, poor economic conditions can be gauged from the fact that more than a dozen restaurants have closed down in the recent past in this border town, including Plaza, Anand, Zen, Fizza, Shalimar, Pizza King, Zenath, Golden Café and Chawla Restaurant. Even the hotel and lodge owners are bearing the brunt of recession. In the city, there are no takers for flats and houses in the new colonies. Many businessmen who were earlier keen to establish colonies here have stepped back owing to tumbling prices and stringent regulations. Praveen Kumar, a real estate agent, said that the government should relax conditions for businessmen keen to set up real estate projects here. “No businessman is keen to invest here due to recent hostilities and fear of war. Even the two popular movie theaters, Joshi Palace and Raja Talkies, have shut down. Retail giants Vishal Megamart and V Mart have also dropped plans to come to town. Amartex Showroom in the cantonment has also closed down,” he said. Government projects are also hanging in abeyance. Construction of Circuit House on GT Road and Rai Sikh Bhawan on Zira Road is far from complete and there is virtually no activity taking place. Several important government projects like construction of mini secretariat and judicial complex, government college and sports stadium are yet to see the light of day.
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GROUND REALTY Dim is beautiful PROGRAMMABLE dimmers are now available in the market to control lights in a house through remote control. All lights in a house or a room can be controlled, turned on and off or dimmed up to four intensities through one remote control. Use this control for your drawing room or bedroom to add style to your living. Clipsal has now come up with a remote control that can cover an area of even 4000
sqft! However, don’t connect the dimmers to tubelights or CFLs, as these remain energy efficient only when lit to full capacity. Some switches can turn the light on and off as you enter or exit a room. These work on passive infrared detection and comprise of a sensor that turns lights on and off as it detects movement. You can use these switches in a room or two to add uniqueness to your house.
HOME lighting is lo longer just about installation of fittings and fixtures. It has become a specialisation that demands a lot of innovation. Whereas lights provided in a house should serve the primary function of allowing all tasks with ease, these should also create an environment of celebration in the house. Achieving energy efficiency and artistic effects are additional requirements. So, let the lighting pattern of your house provide effective illumination instead of simple illumination. Planned lighting will add to the beauty and utility. Lighting is classified into three categories: ambient, task and accent. Ambient light is for general illumination of the house, task lighting focuses on a particular area like a table or kitchen worktop while accent lighting helps highlight a feature — a painting, a sculpture or a carving. In a way, ambient lighting is background lighting while task and accent lightings are object-oriented lightings. Keeping these categories in mind, you will see that this classification will allow you to play with light and provide effective lighting. It will also help avoid unnecessary switches here and there. Front area: Keep the entrance area well lit. The house number and the nameplate must be adequately illuminated so that these can be easily read at night. Most houses ignore this requirement. Also plan the lighting of garden, lawn and terrace to create an artistic effect rather than just generally illuminating these areas. Add a few back-lighters behind plants and some sockets to run fans, coolers or music systems. See that the sockets provided are those with shutters to avoid any short circuit during monsoon. Drawing and dining room: Plan two lighting sources for the dining room: one for the dining table and other for the room in general. Install two hanging lights above the table and connect to dimmer switches to have a candlelight ambience whenever needed. In the drawing room, always use up-lighters to light up the ceiling. Use corner lamps to highlight a wood carving or painting on a wall. Recessed or concealed lights add glamour to the room. You could keep lamps with different shades in corners to create pools of light. Again, avoid a single light in the drawing room. It looks cold and sad and visitors won’t feel at home. If the floor is of glossy vitrified tiles, choose lights with less intensity, as the reflection from the floor will also light up the room. Kitchen: Use spotlights rather than a single central light. The latter offers poor light but more shadows. Put lights above the cooking area, the sink and the working shelf. Put more lights in storage areas. In the kitchen, prefer white light to yellow. See that all storage areas are well lit. Plan large windows in the kitchen to let in maximum natural light. Keep a provision for a fan point and a fan box to add a ceiling fan whenever required. Bathrooms: Keep a provision for lights right above the mirror. The position should be such that your face is lit up but your eye gets no reflective glare. Never provide a light opposite the mirror — the reflection will prevent you from using the mirror. Ideally, provide 20W white lights at one-foot interval along the periphery of the wall mirror. Choose waterproof lights for the bathroom. Let all electric appliances in bathrooms be pull cord
operated or ensure that the switches are either outside the bathroom or away from the splash area. Bedrooms: Opt for varied lighting in bedrooms and have several light sources. Choose from bedside lamps, night lamps, footlights and soft, smooth room lights. While selecting bedside lamps, opt for models with a flexible neck. To save space, get wall hanging versions and keep side tables free for other things. Always provide two sets of switches in bedrooms so that you don’t have to get out of bed to turn off the lights. Study: Task lighting is vital in the study. Provide a table lamp or overhanging lamp in such a fashion that your shadow does not cover the writing pad. If you are going to be working a lot on the computer, ensure that the light falls on the keyboard so that you don’t strain your eyes while alternating between the screen and keyboard. Kids’ room: Here, the most important feature is safety. Provide only shutter-fitted sockets. Keep them shut unless in use. Light up the room brightly. Make sure that there are no loose or flexible wires in the room that could be gripped and pulled by a child. Install switch plates at lower levels to enable children to reach them. Provide night lamps and footlights and keep them on during night hours. Stairs and levels: Always provide good lighting in the staircase and in areas where there is a change in floor level. Go in for footlights at change of floor level and keep these turned on through the night. Always hang your lights from the walls or ceiling. There is no point in reducing your circulation area by providing lights on floors. Inverter location: Install the inverter in an open area, preferably outside the house. Acid batteries used in invertors emit acid fumes that are not good for humans. If you are keeping the inverter in a balcony, keep it away from plants as well. Go ahead. Happy lighting! (This column appears fortnightly) The writer is deputy chief engineer, civil,
PSEB. He can be reached at www.jagvirgoyal.com
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Down, down & below 2009 will be worse JLLM forecasts that rentals of retail space could further decline this year in NCR. The anticipated new supply in 2009 is expected to further put pressure on rentals and increase vacancy levels, the consultant said. “Rentals are expected to see a further correction this year until the point that retailers will not find estate cost to drain away of their profits. Revenue sharing might also emerge as the preferred lease model,” it said.
RENTALS in prime shopping malls of the national capital region fell by 6 per cent in October-December 2008 compared to the previous quarter due to low demand of space from retailers, according to global realty consultant Jones Lang LaSalle (JLLM) latest report. The average rental values across Mumbai city and high-street also corrected by about 5-15 per cent in the fourth quarter of 2008. The consultant also pointed out that future supply would put further pressure on the rentals in these two cities and demand-supply mismatch would result in various innovative arrangements between developers and retailers, such as revenue-share model. On the national capital region, JLLM said: “The NCR retail market witnessed a decline in rentals across all micro-markets in fourth quarter of 2008. In that period, rentals fell by about 6 per cent quarter-on-quarter in prime malls in Delhi city.” The fourth quarter of 2008 has not been an encouraging one for the NCR retail real estate market, JLLM pointed out. “Following the sluggishness witnessed in third quarter of 2008, the NCR market witnessed a further breakdown in retailer and consumer demand,” it said. “Squeezed retailer margins on account of weakened sales volume and increased costs due to high rentals and maintenance costs have curbed the expansion plans of many retailers, many of which are presently focusing on restructuring their retail strategies,” the report added. The consultant noted that the performance of retail asset class has completely reversed in last one year in the NCR region. “A comparison of growth in the rentals over the last one year reflects the directional change in the growth rate from the fourth quarter of 2007 to Q4 2008. The rentals in prime south witnessed on an average year-on-year decline of almost 4.66 per cent,” the report said. The NCR did not see much activity in terms of new supply of retail space in fourth quarter of 2008. The total retail mall space in NCR rose to 14.2 million sq ft in fourth quarter from 13.8 million sq ft in the third quarter, the report said. JLLM said that NCR is expected to witness additional retail space of close to 5.3 million sq ft in 2009. “Such a huge future supply is on account of project delays from 2008. The proposed supply faces risk of getting completely shelved or further delayed if sufficient retail demand is not generated in the market in 2009,” it noted. On Mumbai retail market, JLLM said that the city witnessed considerable slowdown in demand for retail space and the average rental values across Mumbai city malls and high-streets were corrected in the range of about 5-15 per cent in fourth quarter of 2008. The overall rental values across prime city malls in Mumbai dipped by 1.7 per cent from Rs 300 per sq ft to Rs 295 per sq ft per month. “In the current market conditions of diminishing demand, the huge supply pipeline is going to exert tremendous pressure on developers to reduce their product pricing,” it said. With rising vacancy levels and strong future supply in the pipeline, retailers have more options to choose from and have more leverage in negotiating with developers, it added. The Mumbai retail market comprised about 9.8 million sq ft of prime retail space as of end-2008, with vacancy levels of about 15 per cent. About 16 new malls with a total built-up area of about 7.3 million sq ft of space are expected to be completed by end of 2009 in Mumbai.
— PTI
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Housing made affordable
REALTY firm Parsvnath Developers announced that it would build a residential project in Lucknow in the affordable price band. The project comprising of 510 units is spread over six lakh sq ft area and would offer two, three and four bedroom units in the price range of Rs 13.95-27.5 lakh. The company is expecting sales realisation of about Rs 100 crore from this project comprising 510 independent floors. "The total realisation for this project is approximately Rs 100 crore which would be realised over a period of two years," a Parsvnath Developers spokesperson said. Construction work of the project, which is a part of 35-acre township, is expected to get completed in two years. "At Parsvnath, it has been our constant endeavour to design products to cater on the ongoing demand trends. The need of the hour is quality construction at economical rates," company chairperson Pradeep Jain said. Real estate developers, including country's largest realty firm DLF, have started focusing on affordable housing project to beat the slowdown in the property demand, which has affected their sales volumes significantly. Parsvnath, having presence across 50 cities in 17 states, has a developable area of 209 million sq ft, of which 81 million sq ft is under construction. It has presence in all the verticals of real estate such as residential, office, shopping malls, SEZs, township, hotels and IT parks. — PTI
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TAX TIPS It’s a long-term capital gain
My friend, an NRI, has taken a pension plan life insurance policy in India from an Indian insurance company. Maturity amount of this plan in lump sump or in installments is subject to income tax for Indian residents/citizens. The insurance company says that if an NRI has taken the plan in India and pays premium from NRE Account, the maturity amount is not taxable in India. It can be taxed in the country where the NRI resides. Please tell me if it can be true. — M. Singh A.
The residential plot held by you would be treated as a long-term capital asset, as the same was held for a period of more than three years. The capital gain arising thereon would be a long-term capital gain. The indexed cost of the plot would be Rs 3,22,032. The capital gain would thus work out at Rs 77,968. In case you do not have any other income, no tax would be payable thereon as the capital gain is below the maximum amount not chargeable to tax in case of a resident Indian, who is not a senior citizen. In case your other income is more than Rs 1.5 lakh, the long-term capital gain would be taxed @ 20 per cent plus the surcharge for education cess @ 3 per cent thereon. The other income would be taxed on the slab rate applicable to you. Any amount received on the maturity of the insurance policy including bonus allocated on such policy provided the premium payable for any of the years during the terms of the policy does not exceed 20 per cent of the actual capital sum assured is exempt from tax. I would not be able to advise on the taxability of the maturity amount in any other country unless particulars in respect of the country in which your friend is residing are known. Q. Kindly advise me on the following:
— S.P. Agarwal A. Your queries are replied hereunder:
Capital gain will
have to be paid
Q. My son took a loan of Rs 20 lakh from me through an account payee cheque two years ago, which has been credited to his account. Now, he wants to enter into a family settlement with me by giving me a three-kanal piece of agricultural land in a municipality in the Punjab of equal value. May I request you to reply to the following questions:
— Joginder S. Bawa A. Your queries are replied hereunder:
Your son can delete the liability of loan of Rs 20 lakh from his balancesheet thereafter. However, the capital gain arising on the sale of the property will have to be paid by your son.
Husband is a legal heir
— Dev Raj Aggarwal A.
In accordance with the provisions of section 15 of the Hindu Succession Act 1956, the property of a female Hindu dying intestate devolves according to the rules of section 16 of the Act firstly upon sons and daughters (including children of any pre-deceased son or daughter) and the husband, secondly upon the heirs of the husband, thirdly upon the mother and father, fourthly upon the heirs of the father and lastly upon the heirs of the mother. As would be evident from above, husband is one of the legal heirs.
It all depends on
dissolution deed
— Vishvanath Mehra A. The facts given in the query are not complete, as the terms of the dissolution between the partners have not been indicated. In ordinary course, a dissolution deed should provide for the distribution of the capital assets owned by the firm on the dissolution of the firm. I assume that the terms of the dissolution deed do provide for the same. I may add that in case of dissolution of a firm in which two brothers are partners would not be complete unless a method for the distribution of capital assets between the partners has been provided in the dissolution deed. A settlement deed, if executed may be taken as a part of the dissolution deed providing for the settlement of rights between the partners and, therefore, would not serve the purpose of avoiding capital gains tax and the stamp duty. This column appears weekly. The writer can be contacted at sc@scvasudeva.com
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Q. I bought a residential plot in India in June 2005 for Rs 2.75 lakh and sold the same in August 2008 for Rs 4 lakh. What would be the capital gain thereon? I am a resident of India. 
Q. An old lady died without a will for her self-acquired immovable property. Who will be the legal heirs of her property? Will the husband be amongst the list of legal heirs? Please quote rule/law. 
Q. A plot of land was purchased some ten years
back in the name of firm that was a partnership one between two brothers. Later, a structure was raised over it for business purpose out of the internal sources of the firm and it continues to be used by the said firm. The said business premise is divisible in two parts and the partners would like to start business of their own in their individual capacity as proprietor of their respective firms. After dissolution of the so-called partnership firm, can the building premises be also divided through family settlement deed?