Ludhiana’s new Luxe address
Kanchan Vasdev

Extraordinary! This is one word that describes the experience of visitors to new colonies that have come up in this industrial hub of Punjab. Perfectly trimmed grass on the roadsides, crispy clean roads lined with beautiful lamp-posts and well-maintained flowerbeds leave one awestruck. The newly built colonies on the outskirts provide a complete contrast to the congestion and pollution that Ludhiana is synonymous with. Enter one of these and one seems to have been transported to an idyllic abode pronto.

The emphasis in housing has shifted to the next level of living in the financial capital of the state that can boast of many colonies that provide a lot more than just a beautiful house.

The trend has caught the fancy of the affluent and elite of Ludhiana, who are willingly moving to these colonies to own a house there.

Most of the colonies providing such facilities have come up on South City side along Sidhwan Canal. Those who earlier had reservations about shifting to this area are shedding these. The trend started with the development of South City. Initially, the residents had bought farmhouses to use these as ‘holiday’ homes only. But with the passage of time, they started shifting to the area along the canal amidst clean environs, away from the congested city that has the dubious distinction of being the most polluted in the state.

“We used to hear about the clean roads and well-developed colonies in developed countries only. But now we, too, have a choice to live in such places. Living in a house in Baikunth, I do not feel much of a difference when I return to India after travelling abroad, “ said a famous doctor, adding that he proudly shows off the serene and well-developed area to his outstation friends who consider Ludhiana to be an old city in Punjab.

Following in the footsteps of South City, other colonies like Sukhmani Enclave, Country Suites, Baikunth, Rajgarh Estates and Janpath Estates came up offering ‘royal residency’ experience.

Whosover, of course, with the required buying capacity, once saw these colonies was tempted to own a house there. With the last five-seven years, the entire area alongside Sidhwan Canal has witnessed major development.

“These colonies are worth a visit. Just be there once and see the difference. You would not like to come back from there,” said Parminder Singh, a real estate dealer.

He added while the colonisers had themselves come with a beautiful concept, the buyers, too, had added to the beauty of the area by constructing beautiful houses. “Right from perfect architectural designs to construction and use of accessories, everything is of international standards,” he said.

While the Sidhwan Canal area is now the latest destination for luxurious living, Shamsher Avenue on Ferozepore Road is also worth a mention. “It is like heaven on earth. Gardeners work here throughout the day and speakers have been mounted on lamp-posts to entertain the morning and evening walkers with relaxing musical notes.

While these colonies offer a beautiful location for having a dream house, the land is sold between Rs 10,000 to Rs 30,000 per sq yd. “It is not expensive at all. Ludhianvis don’t find it out of their reach, and thus almost everyone wants to be there,” said Parminder Singh.

With an eye on this clientele, an international company has also jumped onto the bandwagon and is developing a colony on the land of three villages — Issewal, Detwal and Aiyali. The company is offering high-class villas within a township that will have facilities like a hospital, school, a university, fitness centre, multiplex and commericial accommodation and, above all, a lake.

S.C. Dhall

Home is the most precious asset of a person, and in order to save this asset from any kind of damage, one should opt for a home insurance policy without any hesitation. The trend of home insurance in India gained momentum when people started taking home loans. But what is the condition that makes us go for a home insurance? 

Nowadays, you cannot ignore house insurance because of the increasing manmade dangers that might harm your beautiful possession. Therefore, we want to get relieved from the tension of monetary loss after filing for insurance. Further, the flexible terms and conditions of the home insurance policies and low premiums have become a plus point.

Two-pronged security

In India, two types of covers are available under home insurance. The policy can cover the damage to the construction because of an earthquake, fire, storm, floor or a tornado. The building insurance provides protection against risk factors like theft, fire and vandalism. 

Contents insurance is another coverage available that provides protection to the valuable items of the insured person. This can include electronic goods, furniture and antiques. 

Most of the home insurance policies in India pay for the replacement or repair caused due to the damage. The payment is made on the basis of market value of the product at the time of damage or loss. If you want to avoid a dispute at the time of settlement, it is advisable to prepare a list of the items that would be insured under the policy in the beginning. 

All reputed and national insurance companies run online operations where individuals can choose home insurance policies as per their requirement. The

Apart from buying online, you can contact an insurance agent or the company yourself. The person will visit you, explain about different home insurance policies available as well as clarify all your doubts regarding the policy quotes.

You can choose to buy insurance for only the building (structure) of your home, or only the contents (belongings) or both.

The policy covers the losses to the structure and contents of your home due to any natural and man-made calamities.

Optional covers

Burglary cover and theft cover (only for contents)

The contents of your home are also covered against loss due to burglary or theft or an attempted burglary. It also covers loss of jewellery, silver articles and precious stones kept under lock 

Terrorism Cover: Covers any damages and losses to the structure and / or contents of your home due to acts of terrorism.

Additional expenses of rent for alternative accommodation: If you are forced to shift into an alternative accommodation because your home is destroyed or damaged by any insured peril, the policy will cover you against the additional rent.
What is not covered

l Willful destruction of property.
l Loss, damage and destruction caused by war. 
l Losses if your home has been unoccupied for more than 30 days, without prior notice to the company.
l Cash, bullion, painting, works of art and antiques.

How to calculate the Sum Insured

Home Structure: The home insurance policy insures the structure of your home for its reconstruction value (and not for market value). Reconstruction value is defined as the cost incurred to reconstruct the home in case of damage. On the other hand market value is a combination of cost of land, demand and supply scenario, etc.

Sum insured is calculated by multiplying the built up area of the home with the construction rate per sq. feet, e.g. if the built up area of your home is 500 sq. feet and the construction rate is Rs 800 per sq. feet, the sum insured for your home structure is Rs 4 lakh.

We recommend the rate of construction for your location when you are buying online. However, this value can be revised appropriately if expensive material, like marble flooring, etc., has been used in construction. If your home has lawn / garden surrounded by a perimeter wall, the construction rate can be revised to include the cost of construction of this wall in home structure sum insured.

Insure against

l Earthquake
l Fire
l Lightning 
l Impact damage
l Aircraft damage 
l Explosion / implosion 
l Storm, cyclone, flood and inundation. 
l Riot, strike, malicious and terrorism damage.
l Subsidence and land slide, including rockslide.
l Bursting and/or over flowing of water tanks, apparatus and pipes.
l Missile testing operations. 
l Leakage from automatic sprinkler installations. 

Vaastu decoded
Getting the basics right
Sai R. Vaidyanathan 
Guiding principles
l Symmetry l Provision for light and air l No conflict between water and fire
l No wastage of energy

If you are searching for or building your dream house, then make Vaastu Shastra your guide so that your dreams don't come crashing down due to a loss of health, wealth or resources.

Vaastu comes from the verb ‘vaas’ that means stay or reside and from ‘vastu’ meaning object. As most of us spend a lot of time at home, it is vital that our dwelling unit be filled with positive energy.

Symmetry for proper distribution

All rooms in the house should get proper sunlight and fresh air. For this, the ancient science is for the adherence to three steps.

First, the plot should be in the form of square or squarish rectangle. Irregular shapes are not recommended as these go against Vaastu’s principle of symmetry.

Divide it into a 3x3 grid. This leaves you with nine squares (or rectangles) that correspond to north, northeast, east, southeast, south, southwest, west, northwest directions and the centre. The central square called Brahmsthan must be left open.

Thirdly, it is preferable that the house and compound wall have some distance between them on all four sides.

With an open centre and open spaces on all sides, all rooms can have access to sunlight and fresh air.

Sun and wind

As life depends heavily on sunlight and fresh air, their movement influences the positive energies we possess.

The mellow rays of the morning sun are positive while the harsh rays of the afternoon sun are considered negative.

In the Gangetic plain (where the Vaastu Shastra might have been written), air moves from east to west in summers and from west to east in winters. The summer gust is positive as it cools the summer heat and the winter wind is considered negative as it adds to the chill.

So, to promote the positive energies and block the negative energies of the sun and the wind, the western and southern walls are kept higher than the eastern and northern ones. The northeastern corner of the plot should be the lowest and the southwestern highest.

More doors and windows must open to the north and east than west and south.

By the same logic, put only small plants in the northern and eastern sides. Trees can be planted in the west and south, but avoid trees that spread out their roots.

(To be concluded)

GREEN HOUSE
Switch to pot culture
Satish Narula

With flats and apartments becoming the most common option for nuclear families in cities, gardens and lawns have become a luxury of sorts. Due to this the new generation knows little about the joy of growing and tending plants. It is sad to see that a farmer’s second generation that had to shift to the cities being told about the way tomatoes or potatoes are grown. Though kitchen gardens and flowerbeds have become rare, one can still experience the joy of gardening by switching over to pots. Apart from growing ornamental and flowering plants in pots for their aesthetic appeal one can also grow vegetables and fruits in pots and have a small “functional” kitchen garden right in one’s balcony. Tomatoes, strawberries, brinjals, ladyfinger etc do well in pots, too. Even though many modern day parents may not like their children to soil their hands, exposure to such things is important as it teaches a lot more than just ways to grow a few plants. There is lot to learn from seeing seed develop into a baby plant and then maturing and bearing fruits. This is a botany lesson right in your balcony. Only by doing so you will know that you have reaped not only the fresh vegetables with that much desired ambrosial but many other benefits, too.

It is not that you can expect to get vegetables that meet your daily requirements. A selection has to be made as to what should be planted. Now there are vegetables varieties that have suitability to pot culture too. See the accompanying picture. The tomato with indeterminate growth are trained to grow vertical and on almost every node they have flowering and fruiting. The fruiting is also heavy in this case, to meet the daily needs of a small family. Also in the picture, there are strawberry plants grown in the pot. “These plants not only give me the ornamental fruits but are a source of education for my daughter who wants to grow them in big plots now!” Says Vikas the proud father.

In such kind of ‘pot culture’, one can go in for daily use herbs or even medicinal plants. Coriander, mint, oregano, chillies, balm, thyme, chive, aloe vera, tulsi, sadabahar, Lemon grass, citronella etc, are some plants that thrive in pots.

The gardeners may wonder whether there is special kind of soil that is needed to produce these in pots. No, there is nothing special about it. The pot mixture is the same as the one used for growing ornamental plants. For this you can use one part each of soil, well-rotten farmyard manure and sand. In this case, you may also add a few shreds of moss grass that retains moisture in pot mixture. When the crop is growing, you can occasionally add nitrogenous fertilisers, a teaspoonful at a time, followed by watering.

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

TAX TIPS
S.C. Vasudeva
The writer can be contacted at sc@scvasudeva.com
Share in ancestral property

Q. I expect to get some share from the ancestral property (of my wife’s parents) through a civil suit. My two daughters, a son, and I had filed a civil suit, with my wife’s consent, when she was alive. At the present rates, the cost of my share of property (including my children) will be around Rs 50 lakh. I have a few queries:

l Will this share of property get equally divided among all the legal heirs i.e. me and my three children or not?
l Will I be required to pay capital gains tax/income tax from this ancestral property or not. If yes, then is there any provision of a waiver?
l Can I buy another property in my name or in the name of all legal heirs jointly?
l Can I spend the amount so received in the HUF property such as the renovation/construction of the house in my name?
— Jaspal Singla

A. Your queries are replied hereunder: l The general rules of succession in the case of female Hindu dying intestate are as under: Firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the husband; Secondly, upon the heirs of the husband; Thirdly, upon the mother and father; Fourthly, upon the heirs of the father; and Lastly, upon the heirs of the mother. In accordance with the above provisions, the property received from the wife’s parents shall therefore devolve upon your sons, daughters and yourself in equal proportion. l There would not be any tax payable in respect of the property inherited from your wife’s parents. l You have the option to buy property in your name out of the share of the inherited property received by you. You can also buy a property that is jointly held by all the four legal heirs. l You can spend your share of the inherited property in the manner you decide. 

Transfer of capital asset

Q. My queries are as follows:

Suppose a person given the power of attorney for Rs 10 lakh in favour of the buyer without registering it in his favour. Does a transfer of power of attorney attract capital gains in the hands of the seller?

If yes, what are the exemptions available for the seller to plan his capital gains?

— Sajeesh A.P.

A. According to the provisions of Section 45 of the Income-tax Act 1961 (the Act), any profit arising from the transfer of a capital asset effected in the previous year is chargeable to income tax under the head ‘capital gains’ and is deemed to be the income of the previous year in which the transfer took place. The term ‘transfer’ has been defined in Section 2(47) of the Act. Amongst others, it includes any transaction involving the allowing of possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act 1882. This implies that in case possession of the property has been handed over for a consideration, it will be a deemed transfer and capital gain arising on such transfer would be exigible to income tax. Therefore, even if a power of attorney is executed and the property is transferred for a consideration, the capital gain arising on such a transfer would be taxable.

The tax on capital gain so arising would not be payable in case the capital gain is utilised for the construction of a residential house within a period of three years of the date of transfer or the net consideration arising on the transfer is utilised for purchasing a residential house one year before or two years after the date of the transfer. Another option available to save the leviability of capital gains tax is to invest such capital gain in the acquisition of tax saving bonds within six months of the date of transfer. Such bonds have a lock in period of three years. 

Tax on sale proceeds

Q. I purchased a flat in Delhi and sold it this year. The details are given below: 

I am a retired government servant, getting a pension of Rs1.5 lakh a year. I am a senior citizen.  Presently, I do not intend to purchase a house. I am living with my family in a rented house, paying rent of Rs 2,000 per month. Please advise about the long-term capital gain, taxable amount, tax due, cost of index of the current financial year and tax saving options. When the Income-tax return is due to be filed and on which form?

Period Amount involved

Purchase of Flat (covered area 60 sq. m.) April 1986 Rs 87,000
Free hold conversion charges (C.D) paid February, 2007 Rs 26,550
Stamp duty on consideration value paid April 2007 Rs 9,080
(Circle rate) Rs 11,300 per sq. m. 
Flat sold April 2009 Rs.6.8 lakh

— Jayant

A. Your queries are replied hereunder: 
a) The amount of long-term capital gain for assessment year 2010-2011 would work out as under: 
Sale consideration: 6,80,000
Less: Indexed Cost: 3,92,742
Less: Indexed Cost of Improvement: 42,746 4,35,488
2,44,512
b) The long-term capital gain would be taxable @ 20 per cent plus education cess of 3 per cent thereon. However, since you are a senior citizen, the tax payable would be Rs 31,829 after giving the relief on account of higher limit of Rs 2,40,000. 
c) You could have saved the above tax by purchasing tax saving bonds issued by the Rural Electrification Corporation Limited within six months of the date of sale. Since it has not been done, the only option available is to purchase or construct a residential house within the specified period for the purposes of saving tax on the long term capital gain arising on the sale of flat. 
d) You are required to file your Income-tax return by July 31, 2010. 
e) The applicable form in your case will be ITR-2. 

Exchange rules

Q. I plan to purchase property and have decided to go in for a property exchange in order to avoid cash dealings. Please help me with my scenario:
My father owns a plot in NOIDA (> 10 years) and we want to own a house/plot in Chandigarh. We have the following questions:
l Is such type of property exchange legal? What process should be followed and would it attract capital gains tax etc?
l What if one side agrees to pay X amount more for the property exchange how would that be accounted for?
l Can I take a loan for this margin amount?
— Pinku Sharma

A. Your queries are replied hereunder: 
l There is no prohibition on the exchange of freehold properties. The exchange would require execution of an Exchange Deed. Stamp duty equivalent to the value of the property, which is being exchanged, will have to be paid. 
l The excess amount paid by a party for such an exchange would become part of the consideration for exchange and would be included for the purposes of computing the value of the property which is being exchanged for the purposes of levy of stamp duty. 
l The Exchange Deed can provide that the difference between the value of two properties would be paid in a manner provided in the Exchange Deed. The amount so paid/payable would be taken as part of consideration for the property being acquired, and therefore, shall be included in the value of such property for levying the amount of stamp duty. 

CGT amount

Q. I had purchased a plot of 152 sqmt. on 08.05.1985 for Rs 12000. I started construction on 09.01.1987, which was completed on 11.01.1990 on the covered area of 84.04 sqmt. The cost of construction was Rs 1.6 lakh. Thus the total cost came Rs 1.72 lakh. Now I have sold my house on 14.11.2008 for Rs. 4.95 lakh. Please let me know me what is the capital gain tax on this amount?
— S. C. Gupta

A. On the basis of the figures given in the query there would be a long-term capital loss after taking into account the cost inflation index for financial years 1985-86 and 1989-90 as per details given hereunder: 
Sale Consideration 4,95,000 
Less: Indexed Cost of Land 
(12,000 X 582 / 133) 52,511 
Less Indexed Cost of Construction
(1,60,000 X 582 / 172) 5,41,395 
Long Term Capital Loss (98,907)

Co-owner’s tax liability

Q. I and my wife have purchased a plot in the name of my wife, in which I have contributed 1/3 of the cost of plot and the balance to 2/3 has been contributed my wife from her own source of income, then we have constructed a building on the said plot by contributing in the same way as 1/3 of the construction cost has been born by me and the rest 2/3 has been born by my wife from her own source of income.
Now we want to rent out this said property please let me know who will be liable to pay the income tax on such rental income. If we will be liable to pay the income tax to the extent of funds we have contributed.
— Ram Kumar Garg

A. The rental income from the property would be chargeable to tax in the ratio in which you and your wife own the property. The income from house property for each of you would be computed separately on the basis of the shares in the property from which the income is being derived and each one of you would be entitled to the deduction specified in section 24 of the Act. In the alternative it can also be computed in totality and net income apportioned in the ratio in which you and your wife own the property.