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Raring to go
Over Rs 1000 crore lost in home loan frauds till end 2008
Experts say still scope for 30 pc correction in realty prices
Housing for all
Omaxe launches Rs 250-cr project
Tax tips
GREEN HOUSE
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Raring to go
POTHOLED, narrow roads and poor infrastructure may soon be a thing of the past in Baddi-Barotiwala-Nalagarh (BBN), Himachal’s prime industrial area. Considered home to the hottest and costliest real estate among tier III cities in the country, a plethora of developmental projects for the belt is expected to help it beat the slump.
These upcoming projects are being seen as a positive sign. These are not just being planned but also executed, making realtors breathe easy after long. The Punjab Government has invited tenders for the Expressway Project after demarcation of land. This would ease travelling between BBN and the Chandigarh tricity region. Manoeuvring the poorly maintained roads to BBN was a major lament ever since the area warmed up to realty. “We often had to cut a sorry figure before investors from Delhi, Mumbai and even down South about the bumpy roads. It was most embarrassing when some of them chose to return half-way” recalls A. J. Sharma a realtor. The most unique feature of BBN was parallel growth of industries, shopping malls, universities, hospitals and infrastructure facilities, While it takes decades for an upcoming area to develop such facilities, BBN was all touted to come up as a model realty area. “It was the lackadaisical attitude of the former state government that impeded infrastructure development in the region till now, causing uncertainty in the realty sector. But with various developmental projects beginning to take shape, the sector is showing signs of opening up,” commented another realtor, whose firm is coming up with villas. Once lacking educational facilities -- the biggest lament of corporate executives shying away from residing here -- inauguration of the Atal Shiksha Kunj promises inception of four private universities. Reversing the trend, students from Chandigarh now commute daily to Baddi to receive education at the Chitkara University, which has already started its first session. Calculating the realty demand as “overwhelming”, another realtor developing plots for independent and luxurious villas says, “I’ve already completed the developmental works and am hopeful of selling off my plots in the near future as the demand for independent houses is being felt in BBN.” Trading was at an all-time high in the fast moving consumer goods (FMCG) related industry, which comprises a major chunk of the investors here. “Renowned names including Godrej, Hindustan Unilever Limited, Procter and Gamble, Amway, Reckitt and Coleman and Colgate Palmolive registered good growth margins in the last quarter of the current fiscal,” said leading packager of the area, Manoj Kumar of Shah Packwell. There is more the region promises once the Expressway Project gets going. Tourists travelling from Delhi to Manali, Kullu, tribal and pristine Leh, Ladakh and Lahaul and Spiti and those from Punjab and Jammu and Kashmir would find it a favourable overnight stopover in the long journey, said a realtor from Mohali, who is exploring the possibility of setting up a resort.
If you have spare cash, Ambala may just be the market to explore. It’s a city whose time has come
To begin with, Chandigarh and its periphery were the best investment options. Consequently, prices skyrocketed forcing investors to look at Zirakpur and Derabassi and then even at Lalru and Derabassi. Now, Ambala is the next big thing on the realty map. Experts say that there have been gradual ups and downs in property prices. Current prices may be stable, but the scenario is heating up. “Ambala is growing and still untapped. There is only one direction for the property graph to go — up. Rates will also increase as more development is expected,” says property dealer R.N. Samrath. While a 10-marla plot in a prime location comes for Rs 50 lakh and above, a buyer will have to shell out somewhere around Rs 1 crore for a one kanal plot. City and Cantonment continue to remain the core areas interesting buyers. In villages falling within Ambala limits, the rates are half but on the rise. Prices of agricultural land are also increasing. The Chandigarh real estate market is also impacting property prices in Ambala. And not without reason. Those on a limited budget are bound to prefer Ambala to Chandigarh and even Zirakpur or Derabassi. Add to this the reduction in travelling time between Ambala and Chandigarh post- completion of the four-lane Ambala–Chandigarh highway and the 2.7-km Zirakpur flyover. The 40-odd kilometre drive to Chandigarh is now a breeze! National Highway No. 1 runs through the city while state highways run across its radius. Good rail connectivity and proximity to the Chandigarh airport are just some additional benefits. Property pundits see no reason why Ambala won’t score with development on the cards. Municipality limits of both the cantonment and city have increased sizably. The difficulty in registration of property in Ambala is also set to be resolved. It may just be the right time to invest!
Watch out for…
VATIKA Group already has a housing colony in Ambala city. The group has one of the largest land banks of around 100 acres, say property dealers. The going rate is Rs 7,500 a square yard. Plots are available in 240 yards, 300, 500 and 1,000 categories. Haryana Urban Development Authority also has a presence. In Sectors 9, 10 and 11 of the city, one square yard costs Rs 7-10,000. You could choose from six marla, ten marla and one kanal plots. Defence Colony is another prime location in the city. At present, a 500 square yard plot there can set you back by Rs 4,000 a square yard. Prices are expected to double since the area has been recently included in the municipal limit of the cantonment. The new projects have proper wide roads, sewerage, water and street light facilities. In the cantonment area, plots in private colonies such as Agrasen Nagar, Ekta Vihar and Rani Vihar are being sold for Rs 13-15,000 a square yard. Sizes range from 100-400 square yards. The Haryana Urban Development Authority has also set up two new sectors -- 32 and 34 – in the cantonment area. It has fixed rates for a six marla to one kanal house ranging from Rs 2,250-2760 a square yard but these are being sold on premium for Rs 6,500 a square yard! Many Army personnel have already made it their home. With the 6km area being included in MC Limits, rates are expected to double.
But the wait is on…
OTHER commercial activity such as shopping malls, entertainment and fun zones and restaurants can still be counted on the fingers. Some like McDonalds, Fun Cinemas and Café Coffee Day have taken the lead but not all boast of good sales. Once this changes, a hike in rentals is
imminient.
Hot potato?
THERE are few takers for plots in localities along NH1. Apart from factors like traffic and pollution that act as a deterrent, prices in these areas are also higher than those in places like Defence Colony, considered one of the best localities to settle in. But with the future looking bright, many outsiders are expected to go in for these plots along NH1 as this would also facilitate commuting to Derabassi, Lalru and Zirakpur.
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Over Rs 1000 crore lost in home loan frauds till end 2008
AFTER the financial services segment, home loan frauds are now haunting public sector banks across the country. In 2008, the fraud figure crossed the Rs 1000-crore mark. According to a report submitted by the Reserve Bank of India under the Right to Information Act, home loan frauds amounted to Rs 600 crore from 2002 to 2006.
Recently, in a major metro, over Rs 100 crore was allegedly siphoned off. In another case, a large multinational bank was dwindled of Rs 80 lakh by a single customer! As non-performing home loan assets spiral for banks, combating these frauds has become high priority as mortgage lending and housing market have a significant effect on the national as well as global economy. Details of home loan frauds in the private sector banks are not available and are likely to run into hundreds of crores, considering these went overboard when realty was booming. “Enthusiastically, banks peddled home loans to all and sundry with the promise of soft interest rates and high loan to value ratio, which some time exceeded 100 per cent of the property value,” says Hardarshan Singh, former general manager of four associate banks of SBI. “The situation in the private sector is more serious, which is why they are going slow on home loans now.” The RBI has also warned banks that the interest rate on housing loans have crashed to a level it cannot take care of defaults. In recent meeting with banks, the RBI deputy governor said that the incidences of fraud were on the rise with a number of cases being reported where forged documents had been used to avail loans from more than one bank. Banks have now been asked to speed up internal rating of their loan assets to prepare themselves for the proposed Basel II prudential norms. In a number of cases, it has been observed that legal opinion given by the advocates in respect of properties mortgaged with banks sometimes turn out to be incorrect and misleading, resulting in substantial loss to banks. “It is often found that either the property was already sold or mortgaged or the mortgagor does not have valid title over the mortgaged property. Under such situation the mortgaged property can not be put up on sale and the whole recovery exercise turn futile,” says V.A. Ghai, retired assistant general manager of a bank . RBI has also asked banks to further advise branches to scrutinise legal opinions given by advocates for correctness thoroughly before sanctioning loans and if need be, these should be cross checked with revenue record. Number of banks have also taken up the matter with the district and state bars against advocates across the country. It has also been made mandatory for banks to provide a copy of the loan agreement, including all enclosures, to the borrowers. In a notification issued to banks the RBI said, banks and financial institutions are advised to invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction and disbursement of loans. A builder-borrower-advocate-chartered accountant nexus is believed to be the root cause of banks falling prey to home loan frauds. Consequently, the Indian Banks Association has come out with a procedure for lodging complaints with the Institute of Chartered Accountants of India and state bar councils on malpractices and professional misconduct committed by erring chartered accountants advocates in their dealing with banks. Home ownership may have become an affordable reality for millions of low income earners, but in a country that still has a housing shortage of 25 million units, banks cannot breathe easy.
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Experts say still scope for 30 pc correction in realty prices
WITH investors shying away from real estate sector, Property Investment Advisors, ASK, expects there could be an up to 30 per cent price correction across most realty markets in the country.
“We believe that there is scope for another 25-30 per cent correction in prices in most (property) markets of the country,” ASK Property Investment Advisors said in a report based on a review of the sector. Stating that demand was overwhelmingly gravitating towards “affordable housing”, ASK said that end-users and investors were shying away from real estate resulting in a demand-supply mismatch with the creation of substantial inventory of premium/affordable properties. Demand would be increasingly price and product sensitive with completed properties commanding a 15-30 per cent premium over under construction properties due to a perceived increase in project execution task, it said. “The top seven cities continue to have considerable latent demand for housing and at the right price, buyers are rushing to the market,” it said, adding demand in the seven top cities had been impacted more than tier-III and emerging cities. ASK expects lot of commercial real estate projects would be delayed or abandoned due to lack of liquidity from banking sectors and investors. “Demand for corporates will continue to exist for Grade ‘A’ buildings as the supply of such buildings is limited. However, with the focus on cost optimisation, corporates may negotiate current rentals with lessors,” it said. The future outlook for the retail real estate sector is weak with rentals and capital values continuing to be under pressure, it said. — PTI
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Housing for all
REALTY player Raheja Developers will build up to 30,000 apartments in the affordable housing category in the National Capital Region in the next two years, which will be offered at Rs 4-25 lakh.
"Though there has been some correction in the realty market, demand is still there, especially in the affordable housing segment. We have already received approvals for developing about 20,000 apartments in the NCR," Raheja Developers managing director Navin M Raheja said. The company has planned to develop up to 30,000 units in the NCR in the next two years, he added. "We have decided to fix the prices of the apartments in the range of Rs 4 lakh to Rs 25 lakh depending upon the size," Raheja said, adding that the minimum size of an unit would be 300 square feet. He, however, declined to give details about the size of investment that the company is looking to put in. "The launch of this affordable housing scheme will (take place) in the next two months ... We will not tie up with any partner," Raheja said, adding construction would be completed in two years and delivery would start in 2011. About the current market scenario, Raheja said the country's property market has witnessed price corrections of about 10 per cent in the last couple of months. —
PTI
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Omaxe launches Rs 250-cr project
It would build residential flats and independent plots under the project, called Omaxe Eternity, at Vrindavan in Mathura district of Uttar Pradesh, the company said. It has also bagged a Rs 39.95-crore contract for construction of Convention Centre at Sonepat in Haryana. Besides, the firm would build a library and computer centre at Deshbandhu Chhottu Ram University of Science and Technology at Murthal in Sonepat district. — UNI
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Tax tips
— K.K. Goel A.
Section 54 of the Act provides that capital gain arising on the transfer of a residential house will be exempt to the extent of the cost of the new residential house in case the same has been purchased one year before the date of sale of a residential house. Therefore, in case you comply with the above requirement, you should be able to claim the benefit for exemption from taxability of the capital gains to the extent of the cost of the house purchased at Gurgaon.
Nil annual letting value: You can’t claim deduction
I shall be paying maintenance charges, property tax and interest on the borrowed capital to my family members for the relevant period of FY 2008-09. My family members shall include this interest earned while computing their respective incomes for the financial year. Unfortunately, due to downturn in the economy, I have not been able to let out the premises despite best efforts. This property has not yielded any income in FY 2008-09. My queries are: Can the expenditure incurred on maintenance charges, property tax and interest given on borrowed capital be taken as loss on house property? As I have earned huge amount of long-term capital gains in FY 2008-09, I shall then be able to offset this loss on house property against long-term capital gains. If it is not permitted under the IT Act, then, will my acquisition cost of this commercial property increase by the amount so spent as mentioned above? — S.K. Sharma A. Your queries are replied hereunder: According to a decision of ITAT Mumbai Bench ‘C’ in the case of Prem Sudha Exports Private Limited vs Assistant Commissioner of Income-tax Central Circle 10 (Mumbai) reported in 17 SOT 293 where a property could not be let out during the whole year inspite of the continuous efforts by the owners, the annual letting value should be taken as nil in such cases. In view of the above decision, it would not be possible for you to get the deduction of various amounts paid during the year in connection with the property that could not be let out. The amount so paid, in my opinion, cannot be added so as to become a part of the cost of acquisition of the property.
Buy bonds two fiscals in a row
I solicit your advice on the following points: Shall I be entitled to deduct the sale price of the house purchased at Dehradun and also indexed cost of the house at Delhi from the sale price of the house at Delhi under Section 54 of the Income-tax Act? As the sale of the house at Delhi was registered on February 9, 2009, can I buy bonds of Rs 50 lakh upto March 31, 2009? Can I get the benefit of buying bonds of another Rs 50 lakh in April 2009? For bonds to be purchased in April 2009, can I get rebate in assessment year 2010-11? For bonds to be purchased in April 2009, may I first deposit the amount in capital gains scheme and then withdraw it and buy bonds of Rs 50 lakh. — Madan Lal Gupta A. Your queries are replied hereunder: n The capital gain arising on the sale of the residential house in Greater Kailash-II shall be computed after taking into account the indexed cost of the aforesaid house. n The benefit of Section 54 of the Income-tax Act 1961 (the Act) would be available in respect of the capital gain arising on the sale of the aforesaid residential house. n The provisions of section 54EC of the Act provide that the investment in tax saving bonds can be made to the extent of Rs 50 lakh in a financial year. In my opinion, therefore, you should be able to get the benefit of the provisions of section 54EC of the Act if you purchase such bonds to the extent of Rs 50 lakh in each of the two financial years. n Yes, you should be entitled to claim the benefit of deduction under section 54EC of the Act on the basis of the investment to the extent of Rs 1 crore. n The investment in the bonds has to be made within six months of the date of transfer of capital asset and therefore it should not be necessary for you to open an account under capital gains scheme for depositing the balance amount of capital gain arising on the sale of Greater Kailash property.
Execute transfer through gift deed
Please advise if the mutation of property can also be done on the basis of above documents in the name of legal heirs in the revenue record. Is any other document required? Please also confirm whether property transferred from blood relation to blood relation requires payment of stamp duty. — V.K. Gupta A. Your queries are replied hereunder: n The documents submitted for mutation of the property in municipal records should be sufficient to get the mutation done in the revenue records also. n The transfer of an immovable property to a blood relation would involve the levy of stamp duty as such transfer can be effected through a gift deed that has to be executed on stamp paper, the value of which would be on the basis of the market value of the property.
Second home not exempted from tax
Q. I own a house in Delhi where I stay with my family. On account of business, I have to travel very frequently to Ludhiana. I intend purchasing a small house at Ludhiana so that I can use the same when I visit Ludhiana. Will the income from the second house property at Ludhiana be exempt from tax since the same would also be self-occupied? — R.S. Gupta A. The income from the house at Ludhiana shall have to be computed in accordance with the provisions of section 22 and section 23 of the Act even though the same is self-occupied. It would not be possible for you to get the benefit of exemption, as the property would be used by you for your own residence. According to the provisions of the Act, the annual letting value of one house that is self-occupied is taken to be nil and, therefore, the other property even if self-occupied shall come within the ambit of the taxability.
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GREENHOUSE
Looking at the wondrous beauties, the begonias, one cannot believe that once they grew wild in nature. But then nature gifts generously. We only need an eye to explore and select. Visiting any nursery you cannot miss the begonias, which are a class apart. Name any colour or colour combination and you get it. The range varies from pink to red to white, yellow, grey, deep maroon to almost black and many more. Anything less is compensated by blooms that come in sharp colours. The bloom size also varies from a mere half a centimeter to four inches or so. The foliage range is also amazing in begonias. It varies from absolutely round to sharp cuts, heart and arrow shape and irregular margins. The size may also vary from an inch in a species to a foot or more. You may find amazing frilled leaf margins, too. It is not always about the colour. You can get a completely green one, a la cucurbits leaf (size-wise), but with spectacular margin that is not only frilled, but pink too! The variety is called Munchkin. I have kept this variety in the middle of other shade loving plants as if a forgotten plant but enjoy its beauty when it peeps out from anywhere in the group to show a leaf. It is so hardy that it may live for quite long even with minimum of watering. Otherwise, begonias have superficial, very delicate and thin root system and it is advised that the soil surface is kept moist. One of the begonias, the ‘imperialis’ has foliage, akin to a tiger skin. Yu may not get these from the nurserymen by name but you have to tell them to show you the range and select. It is not only the collection from the wild but Begonia rex, a very hardy type, is extensively used for hybridisation and that is the secret of many new begonias coming in the market every few days. It is ‘adventurous’ to multiply some of the begonias, especially the Himalayan begonia, the one with large, heart-shaped leaves. Make an inch size square piece of the leaf and keep them on the surface of sand. Keep the sand moist. After a few days you will find new plant emerging from the place where the cut veins touch the sand. While transplanting it care has to taken to shift it as the roots are very delicate and thread like. There is a trailing type, too, that can be used in baskets. Then there is another that needs support to grow high and is called Tree begonia. It has spotted leaves. And you thought I had missed this! Expertspeak
(This column appears fortnightly)
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POTHOLED, narrow roads and poor infrastructure may soon be a thing of the past in Baddi-Barotiwala-Nalagarh (BBN), Himachal’s prime industrial area. Considered home to the hottest and costliest real estate among tier III cities in the country, a plethora of developmental projects for the belt is expected to help it beat the slump.
AFTER the financial services segment, home loan frauds are now haunting public sector banks across the country. In 2008, the fraud figure crossed the Rs 1000-crore mark. According to a report submitted by the Reserve Bank of India under the Right to Information Act, home loan frauds amounted to Rs 600 crore from 2002 to 2006.
With four private universities coming up and engineering, dental, pharmacy, B.Ed, MBA and three nursing colleges already existing, the strength of youngsters is estimated to touch the 20,000-25,000 mark in the next few years. Soon, families could be considering moving to the area for education! Realtors point out that Chitkara University, which opened last year, had availed 58 bus routes from Chandigarh to facilitate travel of students and staff. Chitkara University registrar Virender Kanwar said, “We managed to draw 1,000 students in our very first session and we will be introducing several postgraduate and PH.D courses."
AMBALA seems to be coming of age as an investment destination. The city appears to be slowly and cautiously opening up to real estate investments, virtually non-existence till some time back. 
REAL estate developer Omaxe Ltd has announced launch of a Rs 250-crore project spread in 52 acres of area in Vrindavan.
Q. I had purchased a house at Chandigarh in the year 2005 and the same was let out as I was working in Gurgaon. I have now purchased a house in Gurgaon by taking loan from a bank. The house at Gurgaon is self-occupied. I intend selling the house at Chandigarh as the same has been held for a period of more than three years and the capital gain arising thereon would be a long-term capital gain. Can I get exemption under section 54 of the Act since the house was bought at Gurgaon within one year of the date of sale of the Chandigarh house?
Q. I purchased an office space in a commercial tower in June 2006 on construction linked payment plan. The building was completed and the builders got the occupation certificate in May 2008. I took its possession in September 2008. To finance this purchase, I took a loan from my family members in financial year 2008-09.
Q. I owned a house in Greater Kailash-II, New Delhi, and had been living in it with my family for the last 40 years. I entered into an agreement to sell the house on June 10, 2008. Out of the earnest money received, I purchased a house at Dehradun that was registered in my name on July 22, 2008. The deed of the house at Delhi was registered on February 9, 2009. 
Q. My father constructed a residential house in 1958. After his death, the property was transferred in the name of the legal heirs in the revenue record. Later, my mother expired on June 5, 1998. I have furnished the death certificate/affidavit as well as a request letter and one of my sisters has also executed a registered relinquishment deed of September 7, 1999 whereby she left her rights in their father`s property in favour of her brother and sister in equal shares. My father did not execute any will during his lifetime and died intestate. The Municipal Corporation has already transferred the property in the name of legal heirs — my sister and I — on the basis of death certificate of my mother, registered relinquishment deed from one sister and an affidavit from both legal heirs.
AS a gardener you want colour, longevity, variation, softness and mass effect. You seek adventure in propagation, growing plants in plains or in hills, you want something to flower in shade yet not lend a casual look to your display. The plant should flourish in a well-lit verandah or a dark room and have many other possible good horticultural traits! But if you want both foliage and flowers, enter the world of begonias.