Strong and steady
Land prices in Malerkotla have appreciated considerably since 2005, reports 
Shariq Majeed

Malerkotla — known for its beautiful embroidered footwear, insignia and badge-making units — may not be like the other bustling industrial towns of Punjab, but it is not a dormant place as far as the realty sector is concerned. It was one of the few places in the state, which had remained unscathed while communal fire singed the whole of Punjab during the Partition time in 1947. In a similar manner it also seemed to have remained largely unaffected by the real estate slowdown that hit Punjab over the past two years. The land prices have in fact more than doubled over the past few years in several approved as well as unapproved colonies in the area.

The rate of the commercial property housing business establishments, as well as rental value have also doubled in the past four years in and around this industrial town located on the Ludhiana-Sangrur highway.

Property dealers in Malerkotla maintain that the rates of land in five PUDA (Punjab Urban Development Authority) approved colonies have doubled and in some cases the surge is more than double during the past few years.

Ramesh Kumar Multani, a local property consultant, said though in case of approved colonies the colonisers take every care to provide basic facilities like roads, water supply, electricity and amusement parks etc, it has seemed to have made not much of a difference in rates here as there is little difference in price of land in approved and unapproved colonies at present.

According to Kumar,“The highest rate of land in case of approved colonies is in Somsons colony at Rs 12,000 per square yard. The rate in this colony five years back was about 5,000 per square yard. In case of Rose Avenue (constructed by the Improvement Trust) the rate is Rs 6,000 per sq.yd, which ranged between Rs 2,500 to Rs 3,000 in 2005. The rate in Model town and Pawan Enclave is Rs 5,000 and Rs 4,500, respectively. The rates in these colonies five years ago for the same piece of land were Rs 2,000 and Rs 2,200, respectively”.

“In case of unapproved colonies, prices in Narendra and Iqbal colonies are around Rs 10,000 per sq. yd at present. In Green Avenue and Guru Nanak colony, the land price has shot up to Rs 8,500 and Rs 8,000, respectively from Rs 4,000 and Rs 3,000 per sq. yd in 2005.

As for the agricultural land, the rate per bigha along major roads is Rs 5 lakh and it is Rs 4.5 lakh for land that is a little away from the highway,” informs Multani while maintaining that the land prices have doubled in this segment too.

Regarding the rent of commercial property and private accommodation Multani says, “The rent of commercial property used for business establishments, shops, educational institutions has also witnessed an increase of 100 per cent during the past five years. The increase in the rent of commercial property is again mainly because of industrialisation in the township. In case of shops located near Sunder Singh Diwan Singh petrol pump, the rent is the highest at Rs 15,000 for 360 sq. ft area. The rent for the same specification in 2005 was roughly Rs 7,000. In Sadar Bazar and Moti Bazaar area the rent for a 360 sq. ft of shop is about Rs 10,000, which was about Rs 4,000 to Rs 5,000 five years ago. In Kamal Cinema road area, Chota Chowk road, the rent for 360 sq ft shop presently is Rs 4,000 to Rs 5,000, which was Rs 2000 to Rs 2,500 five years ago. In case of the Jamia Masjid area, rent for a shop measuring the same area that used to be Rs 3,000 earlier, has now shot up to Rs 7,000.

Some of the factors that have kept the realty sector buoyant in Malerkotla include the good performance of the area in the field of agriculture. Vegetables produced here are marketed throughout the state. A large number of small-scale industrial units manufacturing cycle parts and agricultural implements are also operating here.

According to Vineet Singh, Business Head, 99Acres.com, “The Malerkotla belt is catering to almost 40 per cent fruits and vegetables needs of the back-end supply chain of Bharti Walmart. It is said that Bharti has also purchased some land in this area as well. Besides this there is a new four-lane Highway from Ludhiana nearing completion. All this has generated a lot of investor interest in this area and prices have increased sharply. Brokers operating in the area see good returns for investors even at current rates.”

Village with a view

Spread over 27 acres, the Commonwealth Games Village (CWGV) is located adjacent to the Akshardham temple, and is minutes away from Connaught Place. Almost 73 per cent of the total area is devoted to green spaces that would be lined up with more than 2,100 trees and shrubs, waterbodies, sporting facilities and boulevards. The CWGV will be a green-rated building under Teri’s ‘Griha’ parameters, with roof insulation and solar hot water and solar lighting facilities. With such amenities, visiting delegates have benchmarked the CWGV against the Beijing Olympics Village and some have termed it to be even better.

The games village incorporates the best international practices and standards from the design perspective. It also includes modern energy solutions including solar power for common areas, VRV technology air conditioning systems, apart from comprehensive security systems like videophones.

Modern facilities

The CWGV has all modern facilities to meet the requirements of the athletes, as per international standards. Apart from 24-hour security and maintenance, the CWGV will be a certified green building with excellent connectivity by way of elevated road network and metro services. There is common area lighting by solar power. It also has the largest residential solar water heating system at 85,000 litres. Besides, there is round-the-clock power supply ensured from two grids, i.e. Pragati Power Station and Patparganj Grid. In addition to this, 100 per cent DG power backup is available.

There are 1,168 fully air-conditioned apartments spread across 34 towers. In total, there are 4,000 bedrooms that will house 8000 athletes. There are two to five bedroom apartments ranging from 1425 sq ft to 3725 sq ft housed in 34 towers. There is ample car parking facilities in the basement totaling to 2,500 cars.

The residents will have access to several facilities like such as a fully equipped unisex gym, fitted with cable TVs and sauna. Sports facilities such as tennis courts, half-court basketball, 30-metre lap pool with recreation bay and bubble pool are some of the other features of CWGV. Besides, community hall, crèche, library, reading room, convenience shopping, senior citizen recreation room, children’s play areas complete the other significant amenities at the CWGV.

Green qualities

The project is proposed to be a certified “Green Building” by Teri’s ‘Griha’ rating. Specifically Griha is based on accepted energy and environmental principles and seeks to strike a balance between the established practices and emerging concepts, both national and international. This system benefits the community at large with the improvement in the environment by reducing GHG (greenhouse gas) emissions, improving energy security, and reducing the stress on natural resources. — TNS

Vaastu decoded
Gateway to success
Sai R. Vaidyanathan

The most well kept room in the house is the front room. Guests are received in this room and members of the house spend the majority of their time here. If lants lying in the shade tend to move towards light, can man be very different? After a good night’s sleep, it is natural to want to sit in an airy and well-lit front room.

So the entrance of the house and front room should be in the northeast. Also, the open space between the compound wall and the house should be more in the north and east than in the west and south. This also goes for verandahs and balconies.

Thus, while you sit and relax in your living room, you also absorb the positive energy of the sun and wind.

As you entertain guests and meet clients (if you run a business from home) in your front room, the façade of the house i.e. entrance and front room should be appealing. re should be no obstruction like an electric pole or mud puddle in front of the house. Plus, an obstruction like a shoe rack should not greet the guest right at the front room entrance.

While working (or studying), you should face the window. This way light will fall on your book and not your shadow.

Don’t have your back towards the door. It appears disrespectful to the client or guest.

Rest in peace

As the entrance is in the northeast, the bedroom of the master of the house should be farthest from it i.e. at the southwest corner so that his sleep is not disturbed. After all, he is the primary source of income.

The members who will stay — sons and married couples — should have their bedrooms close to the southwest corner. Daughters, who would be married off, and guests can have bedrooms on the western side.

If the entrance to the bedroom is in the northeast, place the bed at the southwest corner for minimal disturbance.

A house near a place of worship or a market will not allow you to rest. Avoid it.

Rooms on the western side that are not used for sleeping should have mirrors and metallic objects so that these can optimally use the little light available to them.

(To be concluded)

realTY BYTES
New township

New Delhi: Ashiana Housing and Manglam Builders have come together to introduce Rangoli Gardens in Jaipur. Nestled in the lap of nature, it is located just a stone’s throw away from the heart of Jaipur. It is spread over 25 acres and truly represents garden living with 8.5 acres of parks within the complex. The township endeavours to blend nature with state-of-the-art lifestyle to give its residents with the best facilities of luxuries and comforts. The buildings will be earthquake resistant.

According to Vishal Gupta, Joint Managing Director, Ashiana Housing Limited, “Comfort and convenience are the key features of this project. This Rs 500-crore project will house 200 units in Phase -1 and these are being offered at a price starting from Rs 1650 per square feet.” — TNS  

Housing project in Gurgaon

New Delhi: Real estate major Emaar MGF will invest Rs 500 crore to build a mid-income housing project at Gurgaon in Haryana. The company would develop 1,250 units in the 29 acre-project located at Sector-77 in Gurgaon. Sources said that investment in the project ‘Palm Hills’ could be around Rs 500 crore, excluding the cost of the land.

With a starting price of Rs 48 lakh the company has sold 650 units in the first phase. “The encouraging response on the first day of launch is a testimony to the prevailing huge demand for quality housing in the mid-market segment,” Emaar MGF Executive Vice Chairman and Managing Director Shravan Gupta said. — PTI 

TAX TIPS 
S.C. Vasudeva
The writer can be contacted at sc@scvasudeva.com
Rental income

Q. Please refer to my e-mail (dated March 6, 2010) in which I could not clarify my question properly, now I am sending my question by correcting the same. I and my wife have purchased a plot in the name of my wife, in which I have contributed one third of the cost of plot and the balance has been contributed by my wife from her own source of income. We, later, constructed a building on the said plot by contributing in the same way — one third of the construction cost has been borne by me and the rest by my wife from her own source of income.

Now we want to rent out this property. Please let me know who will be liable to pay the income tax on the rental income. If we will be liable to pay the income tax to the extent of funds we have contributed on such rental income, on the said property.

— Ram Kumar Garg

A. Your queries are replied hereunder:

F The income tax on the rental of the house property would be chargeable proportionately i.e. in the same ratio in which both of you own the house property.

F The funds utilised for the construction of the house are not chargeable to income-tax. However, you should be able to prove the source of such funds to the satisfaction of the tax authorities. Further, you should also be able to prove the cost of construction of the property taking into account the construction rates presently applicable to the nature of construction. 

Compensation amount

Q. We own some ancestral land (agricultural as well as residential) through inheritance, which is in the name of my father and his brother (my uncle). We are planning to sell some portion of it, from which my father’s share will be divided equally between my brother and me. Also some of the land is expected to be acquired by the government for development purposes, and again the share compensation given to my father will be divided equally between my brother, and me as he wants it to be. My query is that do I or my father have to pay LTCG tax on the amount received? Do we have to invest this amount in some other property to save LTCG tax or we can use it as we want?

— R. S. Malik

A. The facts in the query are not complete. You have not specified whether the compensation receivable in respect of the land required by the government is an agricultural land or an urban land. The taxability would depend on the nature of the land.

n Assuming that the land which is expected to be acquired by the government is agricultural land which was being used for agricultural purposes till two years preceding the date of transfer and the same is situated within the municipal limits or the notified area, the compensation amount would not be taxable under Section 10(37) of the Income-tax Act, 1961 (the Act). In case the agricultural land is situated outside the municipal limits or notified area, the amount of compensation would not be taxable as such a land is not considered to be a capital asset.

n In case the acquisition is of urban land (residential) the long-term capital gain arising on sale of such a land would be taxable. You can save the tax arising on capital gain by utilising the net consideration received/receivable on such sale, in the purchase/construction of a residential house. The purchase of a residential house has to be effected within a period of two years from the date of sale and the construction has to be effected within three years of the date of sale. The capital gains tax can also be saved by investing the amount of capital gain in tax saving bonds issued by Rural Electrification Corporation Ltd. or National Highways Authority of India. The investment in such bonds can be made for a sum not exceeding Rs 50 lakh in a financial year. 

Tax-saving bonds

Q. I sold a plot in January 2007, and after indexing the cost of such plot a long-term capital gain of Rs 10 lakh has been earned thereon. I had purchased the requisite tax-saving bonds within the period of six months of the date of transfer of the plot. Now, I need some money. Can I offer these bonds to bank as a security for obtaining a loan? Will it have any effect on the taxability of the capital gain earned on the sale of the plot on which I have sought an exemption?

— R.K. Singh

A. Section 54EC of the Act provides for the exemption of capital gains from taxability in case bonds specified in the said Section are purchased within six months of the date of transfer of a capital asset. The Section specifically prohibits the transfer of such bonds within a period of three years from the date of purchase of such bonds. It has also been provided in the said Section that even taking a loan on the security of bonds or otherwise converting these bonds into money within three years from the date of purchase of the bonds would be construed a transfer of the bonds. I would not, therefore, advise you to offer these bonds to bankers as a security for a loan. In case these bonds are offered as a security for obtaining a loan, the long-term capital gain, which was not brought to tax, would become taxable in the year in which such a loan is obtained. 

Defining agricultural land

Q. I own an agricultural land, which is not situated within the municipal limits and is beyond the distance from the municipal etc. as notified by the Government of India. However, I have not cultivated the land for quite a few years as I was interested in selling it. Will the capital gain arising on the sale of such agricultural land be taxable?

— Karan Singh

A. The term ‘agricultural land’ has not been defined by the Act and as per various decisions the expression ‘agricultural land’ has a very wide significance.

The expression has been held to include land that had all along been barren but was otherwise capable of being cultivated so long as the land or lands had not been actually diverted to other purposes such as building sites or sports grounds or military grounds [Refer 31 ITR 480 (Bombay)]. For the purposes of land being an agricultural land, cultivation or tilling of the land is not necessary. What is to be seen is whether such land is capable of agricultural land operations being carried out thereon [Refer 138 ITR 783 (Calcutta)].

Therefore, even if the land had not been subjected to cultivation and even if there is a spontaneous growth of trees, the same can also be held to be an agricultural land (Refer 32 ITR 466 Supreme Court). The matter, therefore, will have to be decided on the facts and circumstances of each particular case. The factors that should be considered to determine whether a piece of land could be considered to be agricultural land or not are:

F Whether the land has been assessed to land revenue.

F Whether agricultural operations are carried on in the land and whether the land is capable of it.

F The intention of the owner or the purpose for which he is retaining the land, such intention not being fluctuating or ambulatory.

F Character of adjoining land.

F Description of the land in the official records.

In case the facts in your case, after taking into the above factors go to prove that the land owned by you, though not cultivated for a few years, is an agricultural land, the capital gain arising on sale of such a land would not be taxable. 

Tax on insurance claim

Q. We are a partnership concern and are carrying on business as a small-scale industry, the main is that of brass forging. The firm had been allotted a small area in a plot in the industrial area. On account of a fire due to short circuit the building had been completed destroyed. The same was reconstructed after getting an insurance claim from the insurance company. What is the status of the insurance money received from the insurance company? Is it taxable?

— Rajendra

A. In one of its decisions, the Supreme Court had held that insurance claim received on account of a destruction of a shed is not chargeable to tax as the destruction does not amount to a transfer of an asset. Thereafter Section 45(1A) has been inserted in the Act and in case the following two conditions are satisfied, any profit or gain arising from the receipt of such insurance amount shall be chargeable to Income Tax under the head ‘capital gain’. The conditions required to be satisfied are:

F The compensation is received because of damage or destruction of any capital asset.

F The damage or destruction is a result of four categories of circumstances, viz, (i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature; or (ii) riot or civil disturbance; or (iii) accidental fire explosion; or (iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war).

If the aforesaid two conditions are satisfied, then Section 45(1A) of the Act is attracted and such insurance amount would be treated as full value of consideration received or accruing as a result of transfer of the capital asset for the purpose of computing capital gain under Section 48 of the Act. 

GREEN HOUSE
Summer beauties
Satish Narula

Flower lovers are disheartened at this time of the year to see the winter blooms wither With the summer sun blazing threateningly in the sky, the hopes of seeing colour in flower beds seem to evaporate as one prepares to wait for over six months to enjoy the colours of winter blooms once again. The usual perception is that there is hardly any variety in summer annuals and thus there is no option but to wait for winters.

It is true that there is a limited range of summer annuals for your garden. The few to name are gaillardia, gomphrena, zinnia, kochia, balsam, celosia, rudbechia, and the list is already exhausted.

But add to it the glory of bulbs and the garden becomes respectably vibrant. The amazing football lily, the dashing caladiums, the spectacular begonias and dazzling zephyranthes are some of the summer beauties that will keep you company till the weather becomes cools. I have not included heliconia in this list as it is eternal when in bloom. And if you were looking for fragrance, then hedychium and tuberose are the bulbous plants that fill the slot. Also include coleus in this list as it is known for its floral beauty, and you have overcome your summer blooms blues.

Most of these bulbous plants are planted during the spring season. In case these were there under soil the previous season and stayed dormant during winters, these will start sprouting once again. The football lily (see the accompanying picture) will first show up its bloom and it is big round ‘football’ giving it its name. The geometrical perfection in the bloom is surprising. Even when the bloom is over, the foliage is deep green and attractive, it becomes an indoor plant. The blooms appear as and when you plant the bulbs.

The caladium is known for its colourful foliage. The colours, mostly in the deep hues of red and pink have a mix of white, too. If you want to go in for caladium then keep the mass effect in mind. And if you want to have only two to three pots then they form a good display in all green groups.

Zephyranthes lily is one of the hardiest summer bulbous plant. It comes in three colours, white, yellow and pink. Prefer pink and white as they are more stable.

Begonias are also valued for a very wide range of foliage colours. There is an added advantage too: the blooms are attractive and come in bunches.

Heliconia is a somewhat new introduction. The stay of the bloom on the plant is very long and the waxy bloom spike hangs upside down.

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