REAL ESTATE
 


TREND MILL
Well within boundaries
Let your imagination know only one boundary: the periphery wall
YOU have built up your panache by renovating the house, brick by brick, and it now reflects your style. The gables have given way to glass walls in your new abode and anyone can sneak a look into the future designs. The creams, reds and pinks, too, have been brushed aside and your colourful choice now finds an expression in tastefully painted chocolate-brown front and the rear walls. But what about the boundary wall?

Illuminated slits show the boundary wall of this Chandigarh house in a new light!

What a move!
J-K govt’s annual Darbar move has sent rentals spiralling in the Winter Capital
IT is the time of the year landlords and property dealers in Jammu most look forward to. Jammu and Kashmir’s capital, commonly known as Darbar, is on the move and will start functioning in Jammu from November 9. And, this has sent rentals spiralling in the Winter Capital. Around 5,000 government employees shift with the Darbar, many with families in tow. Though the Estate Department manages to accommodate around 3,000 employees in government quarters, dak bungalow and hotels, the rest find themselves on their own to arrange a roof over their heads.

GREEN HOUSE
It’s now or next winter!
BEWARE, gardeners! You are inching towards the final call for planting winter seedlings. Delay and you will pay for it. Like other plants, even winter annuals need about a month or a little more of warmth to put forth proper growth. Then begins winter and the growth slows down, if not stalled completely. By the time temperatures rise again in spring, it is time for flowering. Take the nip in the air as a warning signal and make planting your priority.

TAX TIPS
Capital gain taxable to owner
Q. I purchased a 264 sqyd plot in 2003 worth Rs 6.31 lakh by taking a loan in my wife's name and still paying it off. I have raised construction worth Rs 25 lakh and it went on till October 2009. I just sold the house for Rs 80 lakh.






 

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TREND MILL
Well within boundaries
Let your imagination know only one boundary: the periphery wall
Saurabh Malik

A wall of cut & grouted stone.
A wall of cut & grouted stone.

YOU have built up your panache by renovating the house, brick by brick, and it now reflects your style. The gables have given way to glass walls in your new abode and anyone can sneak a look into the future designs. The creams, reds and pinks, too, have been brushed aside and your colourful choice now finds an expression in tastefully painted chocolate-brown front and the rear walls. But what about the boundary wall?

It’s still the sort that keeps all innovations away. Anyways, look around and you realise the fences are more or less the same. In the midst of full-of-go neighbourhood of townhouses, duplexes, apartments, flats and family homes, the walls safeguard monotony. If the ramparts are not covered with the same old hedges, you have the stockades of undressed bricks fortifying repetitiveness and uniformity. Over and above, you either have wire-mesh grills or bamboo shafts to keep watching eyes at bay.

Alright, your neighbour has a fence with those translucent plastic or fiber sheets, but still the elegance and the poise is missing. Standing there, you realise the perimetres are sufficient to mark the property boundaries, but nothing more. Of course, you do not like it and want something more.

Interesting use of stone & wrought iron grills.
Interesting use of stone & wrought iron grills.

Young inside-outside expert Rama Narang agrees. Flashing a thoughtful smile of understanding, she asserts: “There is no reason why family houses should give a cheap view. It’s the portal to your world, and it better look good!”

Placing before you a coffee-table book on boundary wall designs, she says houses have precincts – there are no outer limits to ingenuity. You can’t broaden the horizons of your house, but let your mind's eye know no bounds for making the barrage wee bit different from what you see around.

“It’s written on the wall. To begin with, think of the stuff that’s around you. Won’t the wall of cobble mountain stones look good and dissimilar? Just in case you don’t wish to pull down the existing wall, just think of putting up the stone tiles on the wall,” she suggests. “It looks particularly good, if you have a house in the hills, on even in a city like Chandigarh. It’s different, yet natural and gels with the surroundings; and soon you will find all eyes on your estate – literally.

Want to know what’s the latest scream in boundary walls? Ask architect Neeraj Sharma. He will tell you all about it. “Forget everything else, and go for illuminated slits. They are bound to show your house in a new light,” he asserts.

Well, don’t look so confused. Sharma is there to explain. “You have a set of three or more slits in one corner of the outer boundary wall with metal rods to keep away everything, but your eyes. The slots are then illuminated to brighten up not just the house, but also your mood. Even during the daytime, the welcome gashes keep the uniformity away”.

You can also go in for Victorian or even Spanish designs. Just make sure the boundary walls have the same finish as the house to uphold aesthetic consistency. Besides stones and bricks, you can also use pillars, steel and wood in combination or isolation to create the desired effect.

Before you begin to give your wall a new look, settle on the exact location of the boundary between properties so you don’t trip the borderline. Doubtful about your property boundary, ask a registered land surveyor.

Remember the age-old adage, ‘good neighbours make good fences’? Get your friendly neighbour to involved in the design. It will not only cut construction cost, but also prevent disputes. Also take his permission before removing and re-fixing common boundary wall or fences. Make sure you go along with slope of the ground, and do not restrict the natural flow of water. Also remember to take into consideration the soil type. So folks, get ready for the great wall of your home.

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What a move!
Sunaina Kaul

J-K govt’s annual Darbar move has sent rentals spiralling in the Winter Capital

IT is the time of the year landlords and property dealers in Jammu most look forward to. Jammu and Kashmir’s capital, commonly known as Darbar, is on the move and will start functioning in Jammu from November 9. And, this has sent rentals spiralling in the Winter Capital.

Around 5,000 government employees shift with the Darbar, many with families in tow. Though the Estate Department manages to accommodate around 3,000 employees in government quarters, dak bungalow and hotels, the rest find themselves on their own to arrange a roof over their heads. Over the years, rate of occupation of rented accommodation has also increased in and around Jammu city due to the influx of employees of multinationals that have opened offices and manufacturing units in Jammu. As demand almost exceeds supply, finding a comfortable house in a good locality becomes as difficult as keeping your hands warm in winter without a kangri!

Most in demand are one and two-room sets for the six-month period. On an average, rents rise by at least 10 per cent. Plus, property dealers charge commission from tenants and landlords after a deal is struck. “When the Darbar moves, employees return to Jammu and rents are raised by 10 per cent. We also charge 50 per cent commission from both parties. By the grace of god, we manage to earn enough to carry us through the lean months,” says the owner of Arun Property Dealers.

Higher the rent, higher commission for property dealers. Anil Sharma, who runs a property-dealing agency, says, “In Channi, rent for a one-room set is around Rs 2,000 to 3,000 a month while a two-room set starts at Rs 4000 and goes up to Rs 7000 per month. The rates increase with increase in area of accommodation.” Corroborates Property dealer S. Kumar, “The rent depends on the number of rooms and location. Normally, rents start around Rs 4000.”

Though government employees do receive house rent allowance – Rs 5000 for gazetted employees and Rs 2500 for non-gazetted ones – it is not sufficient. “The state government fixed HRA in 2007. But renting accommodation is getting more expensive with every passing year. Though we are already paying from our pockets, it is becoming very difficult to find a decent and comfortable home for our families,” says Nazir Ahmad Mir, president of the Non-gazetted Employees Union. “Every year the rent increases by Rs 1000-2000 a month,” he adds.

Favoured localities among government employees are Gujjar Nagar, Ustad Mohalla, and Khatti Ka Talab, Muslim-dominated areas where accommodation is available at reasonable rent. “I managed to get a two-room set in Gujjar Nagar for Rs 2000,” says a government employee. “Last time, I had hired a one-room set. When my family came down to Jammu after schools in the Valley closed in December, it became very difficult. We were six people in one room. So, I compromised on the locality,” he adds.

Non-gazetted Employees Union president Nazir Ahmad Mir traces the unprecedented increase in rents to militancy. “Ever since Kashmiri Pandits started migrating from the Valley, rents have been on the rise. Before 1990, one-room sets were available for Rs 500 to Rs 700 a month,” he says. “The government should be responsible for accommodation to employees every time the Darbar moves. Why not build 2,000 flats in Jammu and the Valley,” he questions.

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GREEN HOUSE
It’s now or next winter!

Don’t miss the last and final call for planting winter annuals.
Don’t miss the last and final call for planting winter annuals.

BEWARE, gardeners! You are inching towards the final call for planting winter seedlings. Delay and you will pay for it. Like other plants, even winter annuals need about a month or a little more of warmth to put forth proper growth. Then begins winter and the growth slows down, if not stalled completely. By the time temperatures rise again in spring, it is time for flowering. Take the nip in the air as a warning signal and make planting your priority.

Even now when you plant, there could be some gaps, which is normal. And when you fill the gaps it is too late for that plant to run and compensate for that lost period of growth. It results in haphazard growth in the bed. It is, therefore, desirable to put more number of plants in a bed so that any mortality is compensated for growth by the adjacent plant. If all goes well and you find the bed crowded, you can remove some seedlings later.

This is also the time to grow pigmies. Very few have adequate space to grow plants and varieties in the garden but with space more often than not being a constraint, go in for dwarfs. In bigger gardens, growing tall species is a compulsion if you want to enjoy proper view. A dwarf will be lost in big garden. Yes, but you can use dwarfs as an edge in a large garden. It will look like a border from a distance.

A gentle rippled slope makes an unusual yet inexpensive water feature.
A gentle rippled slope makes an unusual yet inexpensive water feature.

Dwarf varieties are a boon for those living in flats as they do well in pots. One, they keep a disciplined growth and secondly, they do not unnecessarily cover more space. Even in flower shows, dwarf flowering annuals now get a better deal. The range of winter dwarf is wide and annuals like cineraria, verbena, petunia, marigold, aster, pansy, stock and even dahlia are available with specific heights. Dwarf dahlias are now available with big or pompom blooms. The choice is yours. Even dwarf garden peas are available and with a definite colour!

Let me make one thing very clear: There are hardly any dwarfs in fruit plants. You may have heard about one or the other popular mango variety to be so but in our vigorous weather, the plant ultimately attains same height as others. If you want to have dwarfs in fruit plants, then there are miniatures – more ornamental in nature. They are popular with bonsai freaks. These are Chinese orange, Chinese guava and dwarf pomegranate. These fruits are exact replicas of their big brethren. Leaves of the dwarf guava and pomegranate are a miniature replica of the original. In bonsai pots, their dwarfing effect gets enhanced further.

The water feature is another important aspect of a garden. When in your own house, you may have an elaborate water feature and spend endlessly on it, but in a rented house or a government house, you would like to have it cheap. Find a way – see the accompanying picture. A gentle slope with small ripples has done the job. The flow in this case has been kept very gentle and not rushing. Such water features are very attractive for birds. Using your imagination, you can grow winter annuals or permanent plants around it, but again, the dwarf types. Others have to be clipped to keep them low. For making a low cost water feature, first draw out a interesting shape on the ground. Now dig 12-18 inches and scoop out the mud. Line with thick black polythene. Growing dwarfs or trailing plants can conceal the lining at the edge of the pit.

This column appears fortnightly. The writer is a senior horticulturist at PAU and can be reached at satishnarula@yahoo.co.in

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TAX TIPS
Capital gain taxable to owner
 S.C. Vasudeva

Q. I purchased a 264 sqyd plot in 2003 worth Rs 6.31 lakh by taking a loan in my wife's name and still paying it off. I have raised construction worth Rs 25 lakh and it went on till October 2009. I just sold the house for Rs 80 lakh.

  • What are my tax liabilities?
  • If I get Rs 40 lakh by cheque and an equal amount by cash, do I need to pay tax on the sum received by cheque after depositing it into my account?
  • My wife was a government employee and retired on January 2, 2008. Assuming that my salary is enough for our livelihood, can I show my wife's salary from 2003 onwards and all the amount that she received after her retirement`A0for constructing the house?
  • What are the best options to save tax in this case?

— Karan

A. Your queries are replied hereunder:

  • The capital gain arising on sale of the house would be a short-term capital gain and would be includible as part of your total income for the purpose of taxability.
  • It would not be advisable to receive part consideration in cash.
  • The capital gain would be taxable in the hands of the person who is the owner of the house. The method suggested by you for showing the incurrence of cost of construction by your wife may not be possible as the source of construction has to be clearly identified.
  • There seem to be no legal options to save tax in the present case.

Interest on loan You can claim deduction

Q. I am a senior citizen aged 68 and not eligible for housing loan from any bank. I sold my old house (constructed in 1981-82) for Rs 32.51 lakh in April 2009 and purchased a new one for Rs 80.7 lakh in August 2009. Difference was funded as under:

  • Rs 15.45 lakh: interest-free loan from my sons-in-law.
  • Rs 6.8 lakh: loan against personal FDs from bank.
  • Rs 11.50 lakh: loan from relative against his bank FDs. Repayment of the loan and payment of intrest is exclusively funded through cheques from my account (pension and FDs).
  • Rs 54,000: repurchase of shares allotted to me about 12 years back by the company.
  • Rs 11.12 lakh: sale of shares allotted to me about 10 years back and sold through NSE. STT has been paid on the sale.
  • Balance amount has been funded out of my personal savings and withdrawal from PPF.

Please advise:

  • Will there be any tax liability towards LTC gain on sales of shares at points 4 and 5 given above?
  • Since funds of Rs 6.8 and 11.50 lakh are borrowed funds and interest has to be paid, will I be eligible for deduction of Rs 1.5 lakh as interest towards self-occupied house.
  • What is my status on letting out a portion of my new house?

— S.L. Bansal

A. Your queries are replied hereunder:

  • There will be no tax liability in respect of shares sold through NSE on which STT has been paid.
  • The repurchase of shares by the company would entail tax liability. Since you purchased the shares twelve years back, long-term capital gain would be computed by taking the repurchase price and deducting therefrom the indexed cost of such shares.
  • You would be entitled to claim deduction of interest payable on loans raised for the purchase of house. The deduction would be allowable against income from house property. You would be entitled to claim the deduction of entire interest payable in case the property is let out. If the house is self occupied you would be entitled to claim the deduction upto Rs 1.5 lakh.
  • You can let out a portion of the house. The deduction of interest would be proportionately allowable in such a case.

Discount not taxable

Q. I am a Central Government employee. I recently purchased a house for which I paid 15 per cent down payment from my own savings by a cheque. Since I do not have any alternate source of income, I believe I have already paid due taxes on the amount in past years. I managed to bargain with my broker and got a discount in cash. I have signed a receipt for the same with a revenue stamp fixed on it and kept a copy of it. Am I eligible to pay any more taxes on my own already taxed money that I have got refunded as a cash discount?

— K.K. Sethi

A. I assume that the discount from the broker is in respect of the purchase of the house. If that be so, the cash discount received by you would go to reduce the cost of house. The amount of discount received is not taxable as the same is linked to the purchase of the house.

Legal heir gets CGT exemption

Q. My father owned a house property in Delhi and all of us were residing therein for more than a period of 20 years. The house was sold by him in April 2008 for Rs 6 lakh, cost of acquisition Rs 60,000, fair market value as on April 1, 1981 Rs 1.2 lakh. He was transferred to Agra and a plot was purchased by him in May 2008 for which an agreement to sell was executed and an advance of Rs 50,000 was paid by him. Unfortunately, before execution of sale deed, he died. The sale deed was executed after his death for a sum of Rs 2 lakh in my favour. The construction has been completed within a period of one year of the date of execution of the sale deed. The family does not occupy the house. The cost of the construction was about Rs 4 lakh. Is it possible for me to claim exemption in respect of the capital gain arising on the sale of the house owned by my father?

— A.K. Mehta

A. The following seems to be evident from the facts given in the query:

  • Your father was using the property for his self-occupation.
  • The income from house property held by your father must have been assessed under income from house property.
  • The land in Agra was acquired by your father for which necessary documentation exists so as to prove this aspect.
  • The sale deed could not be executed on account of his death.
  • The sale of the house was effected by him and, therefore, he was chargeable to tax on the capital gain arising on such sale.

As a legal heir you are liable to pay tax on the amount of capital gain which arose to your father and therefore you cannot be denied the benefit of the provisions of section 54 of the Income-tax Act 1961 (the Act) which forms part of the scheme of taxation of capital gain. In this connection you may refer to the decision of Madras High Court in the case of C.V. Ramanathan vs. CIT (1980) 4 Taxman 432 (Madras).

Brothers are legal heirs

Q. My father's sister who was unmarried died intestate recently. Both her parents are no more. Two of her brothers are surviving while the rest are no more. Please clarify as to who will be the legal heirs. Are only the living brothers the legal heirs or children of the predeceased brothers/sisters will be entitled to become legal heirs as per Hindu Succession Act.

— D. Singh

A. General rules of succession as per Hindu Succession Act 1956 applicable in case of a female Hindu who has died intestate are specified in section 15 and 16 of the said Act. The property devolves firstly upon the sons and daughters (including children of any predeceased son or daughter) and the husband. Since your father’s sister was unmarried, the above provisions would not be applicable. However, according to rule laid down in section 16 of the aforesaid Act, property would be inherited by the heirs of the father i.e. her two brother simultaneously. This rule would apply even if she inherited the property from her father or mother.

Stamp duty depends on estate office rules

Q. My parents recently got divorced in the UK. Following the divorce settlement, the courts gave a one kanal house in Chandigarh to my mother. The house was originally in my father's name, but my mother, sister and I have resided in it for over 15 years (my father lives abroad). Following the court order, my mother will be applying to the estate office for the transfer of the property into her name. Will she be liable to pay any stamp duty?

— H.S. Chopra

A. I presume that divorce settlement must have been made through the intervention of the court and the same would have been part of the judgment of the court. In such case, the estate office should not ask the transferee to make a payment of stamp duty. However, the issue will also depend upon the rules framed by the estate office for such like cases. It will be, therefore, worthwhile to seek the information from the Estate office in this regard.

This column appears weekly. The writer can be contacted at sc@scvasudeva.com

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