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TREND MILL
Is realty revival in prospect?
Tax tips
What meltdown? Buyers still head North
GROUND REALTY
Jewellery group forays into realty
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TREND MILL As land becomes scarce in urban areas and buying a plot is out of bounds for most buyers, vertical growth is the newest mantra in the housing sector in the cities of Ludhiana & Jammu Kuldip Bhatia
AS land turns more precious and scarce in Ludhiana, government agencies and real estate developers in the industrial hub of Punjab are now looking skywards. As the era of purchasing land to build the dream house is practically over, multi-storey housing seems to be the only solution. While several private developers have already launched multi-storey housing projects across the city to meet the growing need of affordable houses, the Greater Ludhiana Area Development Authority (GLADA) and Ludhiana Improvement Trust (LIT), between themselves have taken up work for construction of nearly 1,250 flats. Another project for construction of 250 flats at three different locations on land to be obtained from the civic body is also being explored by the trust. The authority has already finalised construction of 144 flats in Sector 40 on the Chandigarh Road in Ludhiana and invited applications for it. Part of a three-storey complex, the two-room flats with a floor area of 58.89 square yards are being offered for Rs 7 to 8 lakh. "Another multi-storey housing project on which the authority will commence work shortly will have 500 two bedroom flats in Dugri Phase II. These will be offered for sale through draw of lots at a tentative cost of Rs 16 lakh,” says RK Sharma, superintending engineer, Greater Ludhiana Area Development Authority. As many as 458 flats being constructed by Ludhiana Improvement Trust in a multi-storey complex in Sukhdev Enclave on Humbran Road are nearing completion. The complex has 84 LIG flats, another 144 for economically weaker sections while the rest are MIG type I and II flats. The trust has also developed another housing project in Shaheed Bhagat Singh Nagar near City Centre with 140 HIG flats with a carpet area of 1,600 square feet. Sensing the immense pressure on the land and ever increasing demand for housing in the city, several private real estate developers have also shifted focus towards vertical growth with more and more multi-storey housing complexes coming up at various locations. Prominent player GK Group recently announced construction of 131 flats in its upcoming township C-county at Ramgarh on the Chandigarh Road. These flats, in a six-storey complex, with a floor area of 900 square feet will be available at a tentative price of Rs 17 lakh. Managing director Gulshan Kumar is confident that these would be lapped up as the culture of houses and kothis is on its way out. The advantages of going in for a built-up flat are numerous, he says, listing high quality construction and huge saving of effort, time and money. Bhasin Developers, after coming up with villas and farmhouses in Rajgarh Estate along the Sidhwan Canal (Near DPS), is now turning to a multi-storey housing complex. Rajgarh Heights envisages 200 one bedroom and two bedroom flats starting from Rs 18 lakh, according to general manager Col Bedi. The Ashok Malhotra Group has also taken up work on a multi-storey housing complex after completing its Palm Gardens township near Sahnewal on the Ludhiana-Delhi GT Road. "We have taken up work for construction of 1,200 flats with a carpet area of 400 to 600 square feet for economically weaker sections and another 300 with a carpet area ranging between 900 and 2,200 square feet," says managing director Ashok Malhotra. Other major players including Omaxe, DLF and Ansals are also said to be planning to come up with multi-storey housing complexes in the city in the near future. If the prevailing trend of vertical growth in the housing sector is any indicator, it will be no understatement to say that the city is destined to have a plethora of high-rise residential complexes in days to come.
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Homing in on Jammu
A FAST expanding city and shrinking residential space: Jammu’s story is pretty much the same as other cities. It comes as no surprise that the solution to the housing needs of its residents is almost identical to that of other cities – multi-storey blocks of flats and apartments.
Though apartment culture may not be very popular in the city yet, various realty majors are working overtime to alter the city’s skyline for good. Article 370 of the Indian Constitution, which guarantees special status to the state of Jammu and Kashmir and disallows outsiders from owning immovable property, has kept developer at bay, but they are now tying up with locals. Leading the pack was Parsvnath Developers with its Parsvnath Passion. Approved by the Jammu Development Authority (JDA), the project would see the company initially invest Rs 100 crore in the next two to three years. Situated over 11 acres of lush green , it envisages 75 per cent of the total area as open space for green living. Launched in association with the Jammu-based Mass House Building, Parsvnath Passion is located on the periphery of Jammu city, the eight-floor high-rise buildings would house 480 apartments with a price tag of Rs 18-30 lakh. Buyers could choose from two and three bedrooms ultra modern apartments. Facilities would include 100 per cent power backup, health club, swimming pool, security, round the clock water supply and piped gas supply. Says managing director Sanjeev Jain, “The people of the region too want a good lifestyle and we promise to offer that and much more.” Kamdhenu Homz Crescent II, in collaboration with a local company, Mahajan Construction, would be building 168 apartments with all modern facilities. The three bedroom apartment with saleable area of 1,489 sq ft would be available at Rs 30 lakh whereas the two bedroom apartment with saleable area of 1117.25 sq ft would be ranged between Rs 25.5 and Rs 26 lakh. The company expects to complete its project, approved by the Jammu Municipal Corporation, by the end of 2010. Another big player in the race is Ansal Housing. Its Ansal Grace promises an enriched lifestyle. Says director Kushagr Ansal, “It is the company’s first residential project in the state under which two and three bedroom apartments are being offered for Rs 24.74-35 lakh.” Various other big and small companies have also invested in Jammu. Despite the slump, most have reported 30-40 per cent advance booking of flats. Finding buyers for all flats upon completion could pose a challenge as customers have to be permanent residents of the state.
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Hyderabad, Bengaluru lead the way in rentals
Rentals were up in Bengaluru in January-March 2009 across most localities compared to the previous quarter. The report said that Bengaluru real estate saw a correction in property prices early last year continuing into the year. Some localities are now seeing revival in property prices. Hebbal, Sarjapur Road, Maleshpalaya, Kaggadas-apura saw an increase in property prices by three per cent. "The trend in January-March 2009 is on expected lines. In majority of localities in Bangalore, prices seem to be averaging out at the current levels, making the market attractive o the price front. Lack of transactions in the market is just a reflection of the prevailing sentiment," said Vineet Singh, business head, 99acres.com. During January-March 2009, markets like Bengaluru that had already seen a bottom, saw a comparative steadiness in prices in some of the localities, while markets like Delhi-NCR stabilised. Chennai and Hyderabad continued to see fall in property prices, however, not as sharp as the previous quarter.
— PTI
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Commercial property looks up in UK
BRITAIN'S bombed-out commercial property market is edging closer to recovery with prices of prime shops and offices holding firm since March. Global property broker Cushman & Wakefield said yields for high-quality UK property in 21 of 24 market segments it monitors have stabilised in the last two months, presenting the most stable picture on prices since March 2007.
Moreover, some prices for prime shops, offices and distribution properties remain unchanged since December 31, putting yields of the most in-demand properties under pressure to fall, the report said. "The UK is looking very attractive at the moment to overseas investors who can take advantage of the weak currency... it is also almost certainly the most advanced market globally in the cycle and has received a very heavy fiscal stimulus," said David Hutchings, head of the firm's EMEA research division. UK commercial property values have nosedived by more than 40 per cent since summer 2007, when the banking crisis ended an era of record prices fuelled by cheap and plentiful debt. According to research from Property Data, just 3.6 billion pounds ($5.40 billion) of UK commercial property transactions were completed in the first three months of 2009, the lowest quarterly volume reported since their records began in 2000. Cushman & Wakefield said it expected to see a gradual improvement in investment activity over the next two to three months as more would-be buyers move to exploit discounts before prices start to rally. But it warned of further falls in values over the shorter term as rental growth assumptions and occupancy levels are hit by the recession.
— Reuters
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Tax tips
Q. Recently I joined an organisation in Chennai and have taken up rented accommodation. My wife, children and parents are living in Delhi in rented accommodation. I pay rent for both houses by way of cheque. Can I club both the rentals and claim HRA or can I also claim HRA in respect of rent paid in Chennai? I have come to know that under 80GG, if spouse, children and parents are not living in the premises owned by them, then there is a possibility of claiming expenses on account of rental paid.
— Rajnish Ranjan A.
The provisions relating to relief to employees who receive house rent allowance from their employer are contained in section 10(13A) of the Income-tax Act 1961 (the Act) as well as in Rule 2A to Income-tax Rules 1962. The aforesaid section provides for the exemption of any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee, to such extent as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations. Rule 2A of Income-tax Rules 1962 provides the limits for the purposes of aforesaid section. The amount which is not to be included in the total income of an assessee in respect of the special allowance referred to in clause (13A) of section 10 shall be:
n
the actual amount of such allowance received by the assessee in respect of the relevant period; or n
the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee in respect of the relevant period; or n
an amount equal to – - where such accommodation is situate at Bombay, Calcutta, Delhi or Madras, one-half of the amount of salary due to the assessee in respect of the relevant period; and - where such accommodation is situate at any other place, two-fifths of the amount of salary due to the assessee in respect of the relevant period. whichever is the least of the three above. As would be evident from the above provisions, the intention of the law is to grant exemption in respect of house rent allowance subject to the aforesaid provisions where the assessee is occupying an accommodation for the purposes of his employment. In my opinion, therefore, you would be entitled to an exemption in respect of the rent paid in Chennai only. Section 80GG of the Act is applicable in those cases where a person is in receipt of house rent allowance and, therefore, you would not be entitled to claim the deduction under section 80GG of the Act.
Deduction towards interest: Upper limit is Rs 1.5 lakh
Q. I have taken a loan from my father for construction of a house as the expenditure exceeded the budgeted amount. Am I entitled to a deduction of interest paid/payable to my father in respect of the amount borrowed from him for the construction of the house as also a rebate under section 80C of the Act? — V.M. Bhalla A.
You are entitled to a deduction towards the interest payable to your father in respect of the amount borrowed for the construction of the house provided the amount of interest paid/payable does not exceed Rs 1.5 lakh. This deduction would be available in case the construction is completed within three years from the end of the financial year in which the amount was borrowed. However, you would not be entitled to deduction under section 80C of the Act as the deduction under the said section is allowable in case the amount is borrowed from specified sources the employer, the bank etc.
If house is mutated, you can gift share
Q. I have my parents’ property — a 50-year-old residential house measuring 302 sq yards with a present market value of Rs 65 lakh. After the death of my parents, there are three legal heirs. One has already furnished a registered relinquishment deed and left her rights in favour of other two legal heirs in equal shares. Can I transfer my share in the name of my son by means of a gift deed? What will be the percentage of stamp duty on it? If there is any other alternative, please elaborate. — Vijay Gupta
A.
The facts given in the query are not complete. You have not indicated whether the residential house has been duly mutated in revenue records in the name of the remaining two legal heirs. I assume that this part of the job has been done. In such case, you can transfer your share in the name of your son by means of a gift deed. The applicable stamp duty rates in the State of Punjab will have to be ascertained from the Registrar’s Office at Ludhiana. The gift deed will have to be registered in accordance with the provisions of the Transfer of Property Act 1882 read with the Registration Act, 1908. An immovable property in India cannot be transferred without registration in view of the provisions of the aforesaid two acts. However, in case you do not want to transfer the share immediately, you can make a will in respect of your share in favour of your son. The will take effect after your death.
NRIs can’t buy in India without RBI approval
Q. What are the consequences in case a Non Resident Indian buys agricultural land in India? — Vijay Pandit
A. According to the provisions of Foreign Exchange Management Act 1999, a Non Resident Indian is prohibited from buying agricultural land, plantation property or a farmhouse in India. In case the land has been bought without specific approval of Reserve Bank of India, the NRI may be liable to pay fine under section 13 of the Foreign Exchange Management Act 1999. Section 13 of the said Act provides that if any person contravenes any of provisions of the Foreign Exchange Management Act, 1999, or contravenes any rule or regulation, he shall upon adjudication, be liable to a penalty of thrice the sum involved where the sum is quantifiable or up to Rs 2 lakh where the amount is not quantifiable and where such contravention is continuing one, a further penalty which may extend to Rs 5,000 everyday after the day first day, during which the default continues.
For repairs, claim rebate on principal, interest
Q. My brother has a shop-cum-office that is rented out. He has been paying income tax for the last many years under the head “income from house property”. Now, he wants to renovate its second floor and install a lift after taking a loan from the bank. Can he claim income tax rebate for the interest and principal amount paid to bank? — Ravinder Bansal
A. The deduction for interest payable for amount borrowed for the repair, renewal or reconstruction of a house property is allowable as deduction under section 24 of the Act. It would thus be possible for your brother to claim deduction in respect to amount borrowed for renovating the second floor of shop-cum-office. The Income-tax Authorities may disallow the interest payable in respect of amount incurred on the acquisition and installation of lift. However, it should be possible to argue that the lift is a part of reconstruction and therefore the deduction of interest payable should be allowed under the aforesaid section. In my opinion, you have a good case for making a claim for interest paid for amount borrowed for renovation and installation of the lift in the building.
This column appears weekly. The writer can be contacted at sc@scvasudeva.com
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What meltdown? Buyers still head North
Says real estate agent dealer Jatinder Singh, Castle Estates, Mohali: “As far as agricultural land in north is concerned, especially Punjab, Haryana and Chandigarh, it is very productive, and constrained to a particular variety of crops only. Also, Non-Resident Indians (NRIs) invest a lot in property, be it residential or commercial, something brokers look forward to. There are more NRIs from the North and naturally, they prefer buying property closer in their hometowns.” Buying a house in Bangalore is useless for someone whose native town is Jalandhar, Jatinder smiles. Chandigarh-based property adviser Ramandeep Singh insists that the city is the only one smiling in the meltdown. “A 1,250 sq ft two-bedroom apartment in Bangalore would cost between Rs 35 and 37 lakh whereas one of the same area costs atleast Rs 60 to 65 lakh,” Ramandeep says. His theory is that North Indians tend to invest more in property as compared to South Indians, who prefer shares and stocks. Property dealer Amit Deewan of Unnati Associates, Chandigarh, says: “Basically, the distance between the cities is more in South and people prefer the north as it is comparatively more developed.” Take the example of National Highway-1 that runs between Delhi and Amritsar, he says. “All cities on this route are closely connected, especially Jalandhar, Ludhiana and Amritsar and draw a large number of buyers and investors. Moreover, NRIs are always keen to buy property in their hometowns,” he adds. Amit Kashyap, who shifted to Chandigarh from Hyderabad a year back, says: “There has just been an effective 5-6 per cent decline in property prices here post-recession. Basically, it is a systematic and an organised city that attracts mainly the end-users. I came here for a project two years back but found this city so addictive that I don’t want to leave! Though buying a house in Chandigarh is pretty expensive, the money spent is well worth it.” Property rates in Chandigarh are the highest in India, especially those of showrooms in Sector 17. One costs around Rs 60-70 crore. Owing to their proximity, Mohali and Panchkula earn complimentary benefits.
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GROUND REALTY The countertop is quite eye catching and demands a little indulgence. The options are many but remember that in the countertop business, a delicate balance needs to be struck between practicality and aesthetics. JAGVIR GOYAL lays down rules for the perfect countertop
The countertop is no less than a small workshop and a house without a kitchen countertop can’t be considered as functional to run a household. A little error in its height can ruin a kitchen’s performance or cause cervical problem to the users and wrong choice of material may leave it unworthy of use, such important is its correct construction.
Countertop width: Width of the countertop should be kept as 24 inches or 61 cm. This can be varied a little on the higher side. However, this width is sufficient to accommodate the burner and other essential items. As one end of the countertop is abutting the wall, it may not be easy to access from the other end if width is increased. Cabinets above: The lower end of the cabinets above the countertop should be kept as 56 inch or 142 cm from the floor or 24 inch or 61 cm above the worktop to provide easy access. The depth of these cabinets above the countertop should not be more than 12 inch or 30 cm as the existence of 24 inch wide countertop doesn’t allow reaching inside a deeper cabinet. Moreover, deeper cabinets protrude too much and may result in striking the head of the person at the countertop. Sliding or upward-opening shutters should be preferred. Hinged shutter if left open in a hurry may injure a person’s head as he moves. Material matters: Till recent times, mosaic finished or marble countertops were universally used. Recently, a number of countertop materials have invaded the market including granite, stainless steel, artificial stone, laminates and tiles. While selecting the material, preference should be given to its properties than the look. It should be strong, fully scratch resistant, stain resistant, heat resistant, impermeable and able to retain its polish and finish for a long period. n
Marble: Marble countertops are quite porous in nature and get stained easily. Turmeric powder, chilly powder and oil may leave deep stains on them. Scratches, however, are not easily visible. Look-wise, marble starts giving an ugly look after a few years of use and needs grinding and re-polishing. n
Stainless steel: Stainless steel is finding use in countertops in the metros these days. Its initial brightness and colour uniformity with the sink and drainage board attracts people. However, it scratches easily and the marks are prominently visible. It is stain-proof and can be cleaned of all the oil and ingredient droppings by use of detergents. Its biggest disadvantage is that it gets dented under heavy weight or impact of falling objects. These dents combined with scratches look quite ugly and the user repeatedly tends to replace it with an alternative material. n
Laminate and wood: Teak wood, walnut and wood laminates are now being put to use in kitchen countertops. Use of laminates for kitchen cabinets is fine due to their resistance to water but these are a big no for countertops. Though laminates are made of compressed, multiple layers of wood or paper, these are prone to damage under heat or may catch fire. Moreover, thickness of wooden countertops is generally double the thickness of a stone countertop. n
Tiles: Ceramic, porcelain or glass tiles can be used on kitchen countertops but these have their limitations. Glass tiles, due to their small size, may catch dirt in too many joints. Ceramic tiles get scratched easily and sometimes start to show pinholes after use. These also chip easily. Prolonged action of heat may also affect their glazing. Porcelain tiles don’t get scratch easily but look out of place when used for the countertop. Whatever tiles we use, the joints become prominent after a year or so. A countertop looks beautiful when its joints are invisible and this look is impossible if using tiles. n
Artificial stone: Artificial stone countertops have captured a major segment of luxury apartments in a very short period. Gujarat and Maharashtra have seen their increased use. Their colourful finish, uniformity and natural stone like look have caught people’s fancy. Artificial stone is made by blending acrylic polymer with minerals and pigments. One of its beautiful features is that it even allows light to pass through. Though manufacturers certify that it can withstand hot temperatures, Indian cooking methods affect it. Cutting something directly on it causes scratches. The product is non-porous, extra smooth, shining and repairable. Any cuts or chip offs can be repaired by buffing the material. Manufacturers extend a warranty of 10 years. More than a hundred colour combinations are available and dark colours look more beautiful than light colours. However its cost is very high — Rs 500 per
sqft. n Granite: Polished granite is best suited for kitchen countertops. Chilli powder, turmeric or oil does not stain it. Synthetic counters like artificial acrylic or polyester based solid materials are rampantly used in Europe and US because granite is not easily available and is very expensive. In India, since granite is easily available, use it and feel lucky! Indian cooking methods support its use. Hot pots do not leave marks on it. It is scratch and stain resistant, solid and strong, good to look at and retains shine for long periods. Granite is not repairable but being very hard, it hardly gets damaged. It costs Rs 100 to Rs 250 a sqft, which is quite less as compared to artificial stone.
The right choice
AMONG all materials, granite — of course — makes the best option followed by artificial stone. No other material should be chosen. Artificial stone is yet under trial in India and its cost also needs to be reduced. Whatever material you choose, take care that the front edge of the countertop doesn’t have sharp edges. Get it well chamfered; you may even get it beveled or bull-nosed. Some other edge finishes like ogee, Roman ogee and half-round are also provided by the material suppliers. Also, don’t go in for carving or border on the countertop. It will only get filled with dirt as time passes. Simply, keep it plain and shining.
More tips in next episode. Till then, happy cooking! (This column appears fortnightly) The writer is deputy chief engineer, civil,
PSEB. He can be reached at www.jagvirgoyal.com
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Jewellery group forays into realty
THE Gulf-based NRK Atlas Jewellery Group is foraying into real estate sector and plans to invest about Rs 1,000 crore in Kerala in the next two to three years. The group has planned three projects — two in Kochi and one in Kozhikode.
Chairman MM Ramachadran said the recession had not affected Atlas and that after carving out a niche for itself in the jewellery and health care industries across Gulf countries, they were getting ready to invest Rs 1,000 crore in housing construction, multiplexes and commercial complexes in the state. It has formed three companies for this purpose — Atlas Gold Townships India private Ltd, R I Kanth Pvt Ltd and Atlas Golden Land & Developers Private Ltd, he said. The group's first real estate project — Celestial Park — worth Rs 50 crore is coming up at near the Nedumbassery Airport. The project will have one, two and three bedroom luxury and duplex apartments complete with mini super market, multi gym, Yoga centre, beauty parlour, restaurant, cab on call, restaurant with room service. The project, which will have 250 apartments, will come up over one acre and will have seven floors and would be handed over by June 30, 2011. The pre launch offer price is Rs 2,700 per square feet, he said. Already 50 bookings have been completed. Among their other projects in the offing are a multiplex of six cinema houses, 200 shops and 150 luxury apartments. The group's investment would be Rs 400-500 crore. Atlas would also be constructing flats and villas at Kakkanad near Kochi over 10.5 acres at an investment of Rs 500 crore.
— PTI
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KITCHEN has been the hole holding the whole world of the Indian woman. But times have changed and it has been realised that this hole holds the key to health and hygiene! Due importance is now being attached to the planning, design and size of kitchens. It is one place in the house that is never vacant, receives maximum work, generates unmatchable output, undergoes repeated washing and mopping operations and has a person standing next to it for recurrent intervals of time.
BARRING selective markets, most cities saw a fall in rentals in January-March 2009 as compared to October-December 2008, according to property report. Delhi-NCR, Mumbai, Kolkata, Chennai saw a decline in rentals while Hyderabad and Bengaluru saw a rise in rentals in January-March 2009 as compared to October-December 2008, the quarterly report on property prices trends released by 99 acres Insite, a property portal, said.
EVEN as realty continues to bleed following the global meltdown, properties in North India are still hot among investors. Prices may be almost double those of the South in Punjab, Haryana and Chandigarh but that does not seem to be a deterrent for the investor.
KITCHEN has been the hole holding the whole world of the Indian woman. But times have changed and it has been realised that this hole holds the key to health and hygiene! Due importance is now being attached to the planning, design and size of kitchens. It is one place in the house that is never vacant, receives maximum work, generates unmatchable output, undergoes repeated washing and mopping operations and has a person standing next to it for recurrent intervals of time. No doubt, it deserves a standing ovation for its contribution to the household!
Fixing the height of the kitchen countertop should invite full attention of the builder. A little more or less height may render it unsuitable for use. As a general rule, in India, a kitchen countertop should be kept at a height of 81 cm or 32 inch from the floor. The height being the difference between the finished floor and finished top of the countertop. This height is applicable to Indian conditions, best for average height of Indian women and to avoid back problems. In a particular house however, it can be fixed by keeping in view the height of the user and making an actual trial for convenience.