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| REAL ESTATE |
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Hopes revive for buyers
Retailers feeling the heat
Affordable homes: Talk of the town
GROUND REALTY
Sagging demand
REALTY BYTES
Office rentals drop in Q1
Tax tips
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Hopes revive for buyers
A year ago, you would have never thought of buying a property when the prices were going through the roof. You always fell short of some lakhs to buy a property and by the time you arranged the required amount, you again found that the price of the dreamt property had increased by another few lakhs. As a result, you ultimately dumped your plan. But rekindle all those lost hopes, as things have changed in the recent times.
The realty business is now grounded due to the ongoing recession and property prices have considerably come down. If you have the money then this is the time to buy. To beat the slowdown, builders and property dealers are offering never before heard special packages, low-cost deals and ready loans to woo customers.
Drastic cut in prices
Property business in the periphery area of Chandigarh is still flourishing. However, prices have been cut down to encourage buyers. The prices of flats, however, depend on the location. If the location is suitable buyers are ready to spend money. Those in property business say slowdown has affected the prices of the property in Zirakpur, Dera Bassi and nearby areas by 15 per cent to 20 per cent and now the market had only genuine buyers. There are no “investors” in the market anymore. “Genuine buyers want a home at reasonable prices. And to give the best deal to such buyers we have cut down the prices,” says Vijay Arora, president of the Peermuchalla-Kishanpura Builder Association, Zirakpur. Arora further added that on an average around six to eight flats are sold per project in a month. The picture of the market has changed a lot in the past few months. While a fully furnished three bedroom flat in Zirakpur used to cost anything between Rs 40 lakh to 45 lakh a few months back, now it is available for Rs 30 lakh to 35 lakh. “I had been planning to buy a flat in Zirakpur for the past one year, but the fully furnished flats were out of my reach due to the exorbitant rates. But now I have choice of flats that fits my pocket,” says Amit Sharma, a resident of Shimla who wants to buy a flat in Zirakpur. A local property dealer asserts that the rates are slashed but there is still no cut in prices at good locations. Buyers generally are specific about the location they want and if a particular location suits them they are ready to pay even higher amounts, he adds.
Good time for MIG
Premium houses mean luxury houses with good quality furniture, best interiors and totally furnished. It was a first choice of buyers at one point of time, but with the affect of recession the demand for premium segment houses is losing its charm. Buyers are only demanding the cheap and affordable apartments. To cater to them, developers are shifting their focus to providing affordable apartments through premium houses. This trend has given a good opportunity to middle-income group (MIG) to buy a house. In Dera Bassi, developers are offering two-bedrooms apartments of 800 sq ft to 1,000 sq ft in the price range of Rs 14 lakh to Rs 18 lakh. Harjeet Singh Lucky, a Dera Bassi-based property dealer and constructor says, “The reduction in size of the apartment has led to a substantial fall in the cost. The net cost of a two-bedroom flat has declined by almost 15 per cent because of the combined effect of reduction in per sq ft price and the size of the apartment.” He adds: “Buyers are demanding small apartments with reasonable prices and this will be the best thing to attract the buyers.” Bharat Bhusan Chowdhary, sales manager of the NK Sharma Group, says the genuine buyer has many things in his mind while buying a plot. “The flat should be approachable and on a good location. Buyers are now sharp and they enquire about everything before dealing. The two-bedroom apartment of the size 1,000 sq ft to 1250 sq ft costs Rs 16 lakh to 24 lakh,” he says. To make houses affordable, builders are now building two-bedroom apartments but it has a negative aspect too. The complex would be congested and virtually the entire area within the complex would be covered. It looks like a packed house. Dealers are adopting all kinds of tricks to still garner profit from sale and purchase of property deals in the area. “If you want to sell your property through a dealer he tells you that it would fetch very low rates as there is recession. But when you go and buy property they tell you the recession is over,” says Randhir Thakur, a resident of Zirakpur. Property consultants suggest that instead of waiting to buy when the rates are the lowest a buyer should take the plunge if they get a good bargain. Instead of waiting for the so-called ‘right time to buy’, which is almost impossible to catch, buyers should bargain for the ‘right choice’.
Easy availability of finance
With recession hitting the job market, the sale of houses by the once highly salaried group has gone down. In order to meet this properly debacle, builders say that availability of loans at easy terms and conditions can improve the situation. Promoters are offering flats, plots along with easy financing facility. Most have tied up with banks and finance companies where loans are granted at easy terms and conditions. Krishan Goyal, MD of Royal Estate, says, “Financing has helped the real estate industry a lot. Easy loans are essential to boost the economy. Initiatives by the banks, housing companies are really proving helpful.”
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Retailers feeling the heat
It was only last year that there were worries about whether the small stores would survive the competition that had been thrown in by large players who were entering the retail business. The debate also raged from whether the small retailer would survive when big malls were coming up offering wide range and variety. Alas! Today the debate has changed to whether the malls and big retailers will survive given the economic slowdown that has gripped the world and the shopper along with it.
The world over, the big boys in the retail business and big malls are shutting down, the issue in India too is similar, whether the malls that have mushroomed like kirana stores everywhere will see the light of the day. “Most of them will close down, and signs are already showing as big developers are trying to convert their plans of building a mall into either residential or office space,” says Sameer Nayar, managing director, Head Real Estate Finance, Credit Suisse Securities India. So what is it that is really keeping the existing malls in business, and what are the signs they are showing? Most of the malls are offering huge discounts to make sure that their inventory moves, these have become places of bargain hunts, says Anjali Kothari, a 43-year-old mall shopper. “I go to Big Bazaar only if it is offering some scheme or is giving discounts, otherwise my Kirana store is just perfect,” she adds. Indeed, malls owners, like DLF, are using promotions as a tool to attract consumers. Sanjay Roy, corporate communications head of DLF Retail, says, “Yes, we are doing a lot of promotional activities to attract customers. Like during the IPL season we are showing the matches on big screen in our mall at Vasant Kunj in New Delhi. We are giving live experience to our consumers with cheer leaders dancing around the stage, food courts for people to enjoy the evening, a real stadium experience,” he
adds. Retailers have faith in doing this promotional exercise and say that these activities and promos do help in getting better sales. Manoj Kumar, head of Home Solutions, E Zone, the electronic division of the Future Group, says: “Though there has been a drop in sales by 25-30 per cent last year, but now the business is picking up briskly. On 26th January, we came with a campaign for the Republic Day and that gave us a good sale. In February, there was a bit of a drop, but in March 2009, we again saw activities picking up.” At present, there is a cricket promotion going on and an air-conditioner campaign being carried out that is likely to attract a lot of sales, he explains. There is a positive optimism on part of the retailers, but what about their expansion plans? DLF says that its new mall at Saket in New Delhi did face a problem as the retailers were threatening to renegotiate rentals. The concept of a mall is that it takes at least one year to stabilise and to see the footfall, the retailers expect that it will happen overnight that is not right, says Roy. We will soon open the DT Cinema by May end and that will see a lot of additional customers coming to the malls, says Roy. Though, he has not spoken clearly about new malls opening up in the near future when asked. However, players like E Zone are expecting to open seven to eight outlets in another 45 days. There is no proper study gone into developing the malls, their locations, their prospects, everyone was taken in by the moment and wanted to be a part of that culture. The whole concept of malls in India is incorrect, says Sameer Nayar. “We had predicted a year ago that nearly 75 per cent of the malls will go out of business, but now we predict that nearly 90 percent will shut shop, he says. The culture in India is to build malls and let out shops, they miss the point that mall has to be taken care of, maintained and individual stores are not going to do that, so where does one see the culture really taking off. But, studies done by Mathew Joseph of
ICRIER, titled Impact of Organised retail on unorganised sector, state that there will be good growth and there is a room for both the organised and the kirana or individual shops to survive. One should not miss the point that the next-door kirana stores have started to modernise and are offering freebies and promotional offers and making their stores attractive. So it is not that they are going to perish, they are reinventing themselves, explains Joseph. Going further, there is a lot of scope for the retailing and mall culture to mature, as has been demonstrated in countries like East Asia and Latin America. So we will also go through that churn and stabilise during this process of slowdown and then the real retailing and mall culture will start in India, sums up Joseph.
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Affordable homes: Talk of the town
Mumbai: A recent state government lottery for about 4,000 low-cost apartments in Mumbai drew more than 4,30,000 applications, underlining the need for affordable housing in a country where housing is also a top election issue.
Political parties of all hues have seized on affordable homes as a vote getter in the ongoing general election, plugging in to the frustration of millions priced out of a real estate boom fuelled by a robust economy and a six-year bull market. Developers too, stung by the credit crunch and sagging demand for offices and premium residences, have turned to a middle class segment that may be more immune to the economic slowdown. “For the government it makes sense from a vote bank perspective,” said Anuj Puri, managing director of real estate consultancy Jones Lang LaSalle Meghraj. “For builders, this slump may last two to three years. How do they pay salaries, keep their lenders happy? This is the option.” Parties have been quick to seize the opportunity in a country where home ownership tops every wish list, and is part of the trio of basic amenities alongside electricity and roads promised by every politician to mostly rural voters. The Congress party-led government has recently encouraged states to release land for affordable homes, invited private partnerships and stepped up funding of rural housing. The Congress government in Maharashtra state — home to Mumbai — has declared 2009 as the year of “Housing for the Common Man”, with a plan to build one million affordable homes, while the Congress government in Delhi held a lottery for 5,000 flats that got 500,000 applications. The BJP has vowed to build one million homes every year in its manifesto. But it is not just politicians taking an interest in votes. Investors stung by a slump in the wealthy real estate sectors are increasingly looking at investment in affordable housing. This kind of housing is “seriously undersupplied” in India, according to a Goldman Sachs report. More than 30 million units are needed because of growing urbanisation. Mumbai, long a magnet for migrants from poor states, is home to one of the 10 most costly residential neighbourhoods in the world; yet more than half its 17 million residents are homeless. Demand has also stayed robust because these buyers do not depend on bonuses or stock-market gains said Puri, who defines an “affordable” home as costing no more than five times the salary of an average middle-class family. This segment of buyers appears relatively insulated from the credit crunch, as is evident from robust motorbike sales and the record number of new mobile phone users being added every month. “Ironically, the sector which was one of the principal causes of the financial market meltdown in the US may just offer downside protection in India -- the fortune at the bottom of the pyramid,” said the Goldman Sachs report. Since India eased rules on property investment in early 2005, foreign investors such as Citigroup and Morgan Stanley have piled in, causing land prices to double in major cities. But as the credit crisis spread, it put the brakes on several big projects; affordable housing on the other hand, is relatively insulated as there is little foreign funding. Top developers such as DLF, Unitech, Omaxe and Parsvnath are targeting the segment now, with about two dozen projects in Mumbai’s suburbs alone, even as high-ticket commercial and residential projects have stalled. The Mumbai draw was more keenly awaited than the election. “I didn’t want to regret later that I didn’t even make an attempt at getting an apartment 30-40 percent cheaper,” said Jitendra Patil, 29, an advertising executive. — Reuters
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Cost-effective creation
Building a dream house can leave a big hole in your pocket. But, by following some economy measures you can significantly bring down the cost of construction Jagvir Goyal Construction of a house is one such activity that often drains all the resources one has. Yet everyone dreams of building one — beautiful, unique and different from everyone’s. Expenses always exceed the estimates. Finishing stage often leaves the house builder in cold sweat. During such times, even a small economy measure, if suggested, feels like a whiff of fresh air. A few such measures, if taken, can help in cutting unnecessary costs and bring the actual plinth area cost down and looking unbelievable to others. Here is some sincere advice: Build during summer times: Winters have shorter days and the working hours are less. Prefer to build a house during summers. Again, avoid peak summer days as the efficiency is less in these days. Thus, February to May and August to November are better time spans. Also, in summer, shuttering needs to be kept in position for lesser period as the concrete gains strength in a faster manner. There is saving on this account also. Optimise openings’ size: Bigger the size of doors and windows in a building, higher the cost of the building. Masonry work and plastering cost less, woodwork and its painting or polishing cost more. So always choose optimum-sized doors and windows, keeping in view the minimum width of doors essential for movement of occupants and the luggage. Similarly, keep the windows and ventilators of optimum sizes to have good ventilation and natural light and avoid oversized windows. Mega-sized windows are prevalent these days but they are not good from earthquake resistance point of view. These also tempt the burglars and intruders. Providing thick glazing and grills is a costly proposition. By not keeping the size of openings as too large, you can save on both the counts. Take engineer’s help: Get the slab, beams, columns, lintels and staircase of your house designed from a structural design civil engineer. Thumb rules lead to uneconomical sizes and thicknesses. Concrete is a costly material. Unprecedented rise in prices of cement and steel has necessitated economy in RCC work. You can use the thumb rules for rough cost or quantity calculations but don’t use them for design of the beams, slab and columns of your house. Further, there are many methods to design a building. All the methods are safe when followed correctly. So ask your structural engineer to choose an economical design method. Working stress method is over safe. Limit state design method is better and economical. Use RMC for beams, slab: These days, ready mix concrete (RMC) plants have sprung up at all stations. These plants supply computer-controlled concrete at competitive prices. And the concrete reaches one’s house at desired time of laying the slab. Transit mixers fitted with pumps even lay the concrete in position. Otherwise, the workers have to simply place the ready mixed concrete in position and compact it. Choose a reputed RMC plant. Discuss the mix design you want to use and negotiate the price. Discuss the fly ash aspect also. There is no extra cost involved in using RMC than locally produced concrete. Controlled concrete for lintels, columns: RCC lintels and columns of a house need small quantity of concrete and a RMC plant owner may not agree to supply such small quantity. In that case, use controlled concrete such as M15 or M20 instead of nominal mixes such as 1:2:4 or 1:1.5:3 concrete. This will bring a lot of saving in cement consumption. These days, everyone prefers to use a mixer and a vibrator to lay concrete and the cement being produced is of good quality. Thus, controlled concrete can be easily used. Ask an engineer to design a concrete mix for you and adopt it. For example, while one cubic metre of 1:1.5:3 concrete may require 8.5 bags of cement, concrete of same strength can be designed with 6.5 bags of cement per cubic metre. Keep a check on consumptions: Once you have finalised your house plan, engage a draftsman with a quantity software and get quantities of each item worked out. Now, you’ll have a ready reckoner with you to keep a check on consumptions and to detect pilferages by site workers or contractors. Otherwise, make a rough assessment. For a single storeyed building of 1,000 sq ft plinth area, approximate quantity of bricks required will be 28,000, approximate number of cement bags will be 350, approximate quantity of steel will be 2.5 tonne, sand will be about 40 cum, bajri will be about 40 cum and wood for chowkhats and shutters will be about 75 cubic ft. These figures are based on experience, so use them for rough estimate purpose. Plan the location of bathroom fittings: Plan provision of WCs, bidet, wash basins, shower or shower cubicle, bath tub and storage cabinets inside a bathroom in such a manner that the running length of water supply pipes is minimum. Ideal will be to keep WC, wash basin and shower along one wall, but many times it is practically not possible. Next, try to use the adjacent walls. Prefer shower-washbasin-seat arrangement instead of the standard shower-seat-wash basin arrangement. And always give priority to utility over beauty. Very costly and fancy fittings are now available but real joy lies in effective use of fittings rather than their beautiful look. Circulation area: Per square foot cost of a building with a larger plan area is lesser than that of a building with lesser plan area. This is because the cost of walls is nearly the same in both type of buildings and gets divided by larger area in a large building. Save on this account wherever possible. Also, the circulation area should be planned carefully as it increases cost. Lesser the percentage of circular area to total plan area, lesser the building’s cost. Storey height: Increase in the storey height of a building increases its cost. It is obvious as with the increase in height of walls, quantity of masonry work also increases. But this is not the only reason behind increase in cost. Increased height increases the load of walls on slabs and beams and on foundations, making them thicker, wider and heavier. Thus, choose an optimum storey height. A 10-feet height for a storey is good enough. Avoid filling work: A low-lying plot requires not only extra earth filling below the floors but the foundations also need lateral supports in the filled portion. Both these costs can be avoided if the plot chosen by you is not low lying. Foundations of a building or house should not be rested on filled earth due to its lesser bearing capacity. Moreover, the filled earth below houses keeps consolidating itself with time as full compaction mechanical methods are not usually available during earth filling below houses. Thus, deeper and heavier foundations taken below natural ground will cost extra, which can be saved by rejecting a low-lying plot. Only in case of basements, such plots may be chosen. Take anti-termite measures: Avoid buying a plot in waterlogged area. Such a plot will invite termite and dampness rising through the walls. Soil will also not be strong enough to bear the loads. Further, get pre-construction anti-termite treatment done for the house and eliminate the termite in soil itself. When the foundations have been raised and the soil back filling around them has been completed and ground leveled, again spray the anti-termite solution on the filled up ground. A word about chandeliers: Chandeliers are in fashion these days and may cost a fortune to you. Make a good market survey and you’ll find really beautiful and stylish chandeliers available at unbelievably low rates. Choose these, satisfy your chandelier urge and save! More tips will follow, but in the next write up. Till then, happy building! The writer is deputy chief engineer, civil, PSEB. He can be reached at www.jagvirgoyal.com
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Sagging demand
Many of the gleaming glass and concrete structures coming up all around Ludhiana may remain just like that — glass and concrete structures — without occupants. Going by the ongoing trend in the real estate sector, especially commercial real estate, which has been the worst victim of the global economic meltdown, things are not looking pretty.
Property prices and rentals for commercial spaces have dropped drastically in the region — between 35 to 45 per cent — in the first quarter of 2009, primarily as financial and technology firms pare real estate expansion and are giving up excess space to curb expenses. Moreover, there is an acute liquidity crunch in the market at the moment, which has further added to the problems of the real estate business. Not only this, the sagging retail business and consequent closure of numerous shopping malls and complexes, retail chain outlets and stores are presenting a grim reality. Even the enterprises, which were planning to open their stores in the area, have shelved their plans. There are already no takers for commercial property in the city in such a negative scenario. Moreover, cautious buying as well as shutting down of numerous commercial establishments has led to oversupply in the field of commercial real estate. This has resulted in further fall in the prices and rentals of the commercial premises in the last six months. And, if experts are to be believed, the slump in real estate is expected to continue and the capital and rental values of commercial property will continue to go down over the next six to 12 months. The sharp fall in prices of commercial property in Ludhiana is quite evident from the fact that shopping malls where one could earlier buy property at the rate of Rs 22-20,000 per sq ft about eight months back, the same is now available for Rs 12-15,000 per sq ft. As far as rentals are concerned, commercial establishments that were earlier available for Rs 120 per sq ft, are today being offered at a rent of Rs 90 per sq feet. And all these establishments are prime property, in posh areas of the city, including Ferozepur Road, Pakhowal Road, Sarabha Nagar and BRS Nagar. Still, there are no takers for the same, said Harsh Basandrai, a property consultant. Commercial complexes in the city interiors are also waiting for takers even as the rentals have dropped down from Rs 50 per sq feet to Rs 25-30 per sq in some areas, said Gagan Kumar, another local property advisor. He said, “Prices and rentals of commercial complexes in the city have gone down drastically over the last six months in the wake of the financial crunch prevailing in the market.” He further said, “Liquidity for the real estate sector is not going to improve for the next two-three quarters and commercial properties will be battered the most.” As prices and rentals keep going southwards, in the coming quarter, we will see tough negotiations between buyers/ tenants and developers to bring down prices/ rents further. As new buyers/ tenants negotiate prices, existing ones will want to renegotiate prices, said Basandrai. “Already, various retail chain outlet authorities and occupants of big stores in the well-known shopping malls of the city are negotiating hard with the owners to lower the rents,” Basandrai added. He further said realtors had their hopes pinned on further cut in the rates of interest by banks for revival of realty.
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Mittal street gets cheaper
London: Under the scorching economic recession, houses have become cheaper by an average of about five million pounds in the ‘billionaire’s row’, but the tag of UK’s costliest street still remains with this tree-lined avenue where Lakshmi Mittal and his family owns three houses. In the Property Rich List 2009, an annual survey of priciest areas in the UK compiled by real estate website Zoopla, Kensignton Palace Gardens has retained its title as ‘Britain’s Most Expensive Street’ with an average house price of about 22 million pounds. Mittals, whose net worth has fallen by 16.9 billion pounds over the past one year to 10.8 billion pounds, own three houses on this street. “Known as Billionaire’s Row for its list of well-heeled residents the Mittals, the residents of this tree-lined avenue may well not be celebrating the fact that each home on this street has lost almost five million pounds (18.4 per cent) in value over the past 12 months,” Zoopla said. Commenting on the Property Rich List 2009, Zoopla CEO Alex Chesterman said, “Despite the current economic climate much of the country’s wealth remains tied up in the property market and whilst average house prices are down across the board last year, there still remain some pretty eye-watering numbers in this year’s Property Rich List.” — PTI
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Office rentals drop in Q1
New Delhi: Demand for office space has not picked up despite drop in rentals across major cities in the country with vacancy levels touching up to 42 per cent in the first quarter of this year, according to real estate consultant Cushman & Wakefield.
Drop in rentals in major business districts of India ranged between three per cent and 37 per cent compared to the previous three months but it has not helped much in developers renting out office premises, particularly in IT/ITES destinations, C&W said in its quarterly report. “The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India compared to a similar period for the last two-three years,” said Kaustuv Roy, executive director of C&W. The study attributed the high vacancy levels to oversupply and decreasing demand from key sectors, such as BFSI (banking, financial services and insurance) and IT/ITES. According to the C&W study, Chennai’s peripheral location recorded the highest vacancy levels of around 42 per cent; the national capital region 8-10 cent, while Ahmedabad recorded the lowest vacancy level at 5-6 per cent. Mumbai recorded a vacancy of around 11-12 per cent and other cities like Bangalore, Pune and Kolkata remained at an average of 16-18 per cent, the study added. —
PTI
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Tax tips
Q. We are one brother and one sister. Our father owns 12 acres of agricultural land, which he had inherited from our grandfather. My questions are:
What is the tax liability on income from sale of ancestral agriculture land? Can my father make a “will” and bequeath all 12 acres to my brother only? I had read somewhere that as per the Hindu Succession Act, 2005, (amendment), such a “will” if made would be invalid because father cannot deny share of ancestral agriculture land to his daughter. Can my father disinherit me from my share in our ancestral agricultural land during his lifetime? — Gurpreet Kaur The tax liability on the sale of such agricultural land would depend upon its situation. In case the same is situated within municipal limits or within such distance as notified by the government from the municipality, etc., the capital gain arising on such sale would be taxable. The tax payable thereon will depend upon the amount of capital gain to be computed by taking into account the cost price, sale price, the period of holding the land, etc. In case the land is outside the aforesaid areas, there would be no tax liability on the sale of such agricultural land. Your father can make a will in respect of his share in the family property and the remaining share would devolve upon the family members comprising yourself, your mother, brother and sister. Your father can disinherit you from his share in the family property if he makes a will in respect of his share in favour of your brother and sister or anyone of them.
Circle rate will decide Capital gain
Q. I owned a piece of land situated in Greater Noida. I intend selling the said plot of land. The circle rate notified by the authorities is much higher than the sale price being received by me. The same rate is being adopted by the Registrar for the purposes of registration of the sale. Please let me know whether the capital gain would be computed on the basis of the sale value or on the basis of the circle rate as notified by the authorities? — AK Nigam
Long-term gain on sale of plot
Q. I am a senior citizen and drawing a pension of Rs 52,000 per year. I sold a plot for Rs 3,85,000 in April 2009, which my husband (now expired) had purchased for Rs 44,000 in 1995. I got the two-thirds share of this plot amounting to Rs 2,56,000. My queries are as under: What is capital gain in this case? What is tax liability for the year? — Kanta Devi A. Your queries are replied hereunder: The capital gain arising on the sale of the plot would be a long-term capital gain. As the index for the year 2009-10 is yet to be notified, the capital gain has been computed on the basis of index applicable for the year 2008-09. On the basis of figures given in the query 2/3 of the capital gain works out at Rs 1,95,246. The tax liability on the amount of total income including long-term capital gain would work out at Rs 4,583. It may be noted that the tax has been computed on the basis of rates applicable for assessment year 2009-10.
Captial gain is exempt from tax
Q. I had purchased about half an acre of land near Panipat in 1988, which is being acquired by the Haryana Development Authority and the process would be completed by June this year. Would the compensation payable by the authority be exempt from tax or I shall be liable to pay any tax on such compensation? — S Kumar The tax on capital gain arising on the compulsory acquisition of the land would be payable at 20 per cent of the capital gain plus additional surcharge to cover education cess of 3 per cent on such tax. A surcharge of 10 per cent would also be levied on the aggregate amount of tax in case your total income, including the capital gains exceeds Rs 10 lakh. The additional surcharge of 3 per cent would be added on the tax and surcharge of 10 per cent. These rates are applicable for the assessment year 2009-10.
Interest paid can’t be adjusted
Q. I have some queries regarding Income Tax provisions which are as follows: I have been allotted a plot by PUDA on installment basis. The instalments are subject to interest. Can I adjust the amount of interest paid on such installments against interest income from bank/loans? I have inherited a house from my father through Will. The same was his self-acquired property. The Will mentions my name only. I want to treat its rental income from my HUF. Can I do so? If not, please suggest any ways to do so? — Rakesh Chander A. The replies to your queries are as under: In case the house has been bequeathed to you in the individual capacity, the income of such property shall continue to be treated as your income for the purpose of the Act even if such property is converted into an HUF property by you. This is apart from other consequence of the act of impressing the separate property with the character of HUF property being treated as a transfer.
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A year ago, you would have never thought of buying a property when the prices were going through the roof. You always fell short of some lakhs to buy a property and by the time you arranged the required amount, you again found that the price of the dreamt property had increased by another few lakhs. As a result, you ultimately dumped your plan. But rekindle all those lost hopes, as things have changed in the recent times.
It was only last year that there were worries about whether the small stores would survive the competition that had been thrown in by large players who were entering the retail business. The debate also raged from whether the small retailer would survive when big malls were coming up offering wide range and variety. Alas! Today the debate has changed to whether the malls and big retailers will survive given the economic slowdown that has gripped the world and the shopper along with it.
Mumbai: A recent state government lottery for about 4,000 low-cost apartments in Mumbai drew more than 4,30,000 applications, underlining the need for affordable housing in a country where housing is also a top election issue.
Political parties of all hues have seized on affordable homes as a vote getter in the ongoing general election, plugging in to the frustration of millions priced out of a real estate boom fuelled by a robust economy and a six-year bull market.
Construction of a house is one such activity that often drains all the resources one has. Yet everyone dreams of building one — beautiful, unique and different from everyone’s. Expenses always exceed the estimates. Finishing stage often leaves the house builder in cold sweat. During such times, even a small economy measure, if suggested, feels like a whiff of fresh air. A few such measures, if taken, can help in cutting unnecessary costs and bring the actual plinth area cost down and looking unbelievable to others. Here is some sincere advice:
Commercial real estate in Ludhiana has come to a standstill. Despite a considerable
drop in the rentals of commercial spaces, there are no takers
New Delhi: Demand for office space has not picked up despite drop in rentals across major cities in the country with vacancy levels touching up to 42 per cent in the first quarter of this year, according to real estate consultant Cushman & Wakefield.
Drop in rentals in major business districts of India ranged between three per cent and 37 per cent compared to the previous three months but it has not helped much in developers renting out office premises, particularly in
IT/ITES destinations, C&W said in its quarterly report.
A. The facts given in the query do not indicate whether the agricultural land inherited by your father was a self-acquired property of your grandfather or it was an ancestral property. The rules of inheritance in case of an ancestral property and self-acquired property would be different. Presuming that it was an ancestral property and your father had inherited the same as karta of such family property, the replies to your queries are as under: 
A. According to the provisions of Section 50(C) of the Act, in case there is a transfer of land or building or both and the sale consideration is less than the value adopted or assessed by any authority of the state government for the purposes of payment of stamp duty in respect of such transfer, the value adopted by stamp duty authority shall be taken as full value of consideration for the purposes of computation of capital gain. In view thereof, the capital gain would be computed by taking into account the circle rate.
A. The capital gain arising on a transfer by way of compulsory acquisition of an agricultural land, which was being used during the period of two years immediately preceding the date of transfer for agricultural purposes by the assessee or his parents, is exempt from tax. No such exemption is available in case of a compulsory acquisition by any authority of a non-agricultural land. The query does not indicate the nature of the land but in view of small size of the plot, it is presumed that land purchased at Panipat is not an agricultural land. 
The interest payable on installments in respect of a plot allotted to you by PUDA is in the nature of capital payment and will be added to cost of the plot. Such payment of interest cannot be adjusted against the interest income derived from bank deposits or loans advanced.