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A view of the area. Photo by the writer
Smooth deal
REAL TALK
TAX TIPS
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Baddi
With the demand fundamentals of the realty sector being focused around cities that have sufficient economic activity, be it industrial, service sector-driven or incentive-driven programmes by the state or Central government, the Baddi industrial area received overwhelming attention from the developers, including some nationally renowned groups. Housing units are available in projects like Amravati Apartments, Hill View, Rishi Apartments, etc.
Healthy demand
This sudden buoyancy in realty sector can be attributed to the fact that the floating population, comprising executives working in various industrial houses in the area, are showing interest in settling down in the township due to improvement in civic
infrastructure. As a result the demand for residential units has gone up over the past few months. Thus, housing projects of groups like Omaxe are generating a good response. “A beginning has been made by selling 30 to 40 per cent flats, while the rest of the project is under construction. The demand has surely increased as inquiries are pouring in now”, said Dileep Modgil, Director of the Omaxe Group. Since affordability of these units is one of the factors behind increasing the demand, most of the houses on offer are in the affordable segment. With nearly 5,000 flats in different stages of completion, buyers are being lured by modest prices. A two-bedroom flat is available for Rs 17.50 lakh to Rs 22 lakh, while a three-bedroom flat has attracted a price band of Rs 21.5 lakh to Rs 26 lakh to Rs 28 lakh. And for those preferring independent villas, a built up area of 1,300 sq feet is readily available for a modest price of Rs 23 lakh to Rs 25 lakh.
Winds of change
Although lack of infrastructure has remained a sore point for realtors having projects here, the launch of the first multiplex in the heart of Baddi marks the beginning of a revolutionary change in the area. The town not only has a number of industries, but also a number of educational institutions and the increasing number of student population had led to a demand for quality eating joints and shopping arcades, and the launch of the new mall-cum multiplex will cater to this demand. Gauging from the rush in the four-screen multiplex, which is already witnessing 70 per cent occupancy, one can well imagine the course of things in the near future. Earlier, with no mode of entertainment or quality shopping area, the town had provided little incentive to the residents to stay back in the evenings. But with educational ventures like the inception of universities in the specially carved out Atal Shiksha Kunj, and the much-needed hospitals coming up, the floating population is finding it a better place to settle down rather than live in Panchkula or Chandigarh. Even the scores of utility offices which catered to the various industrial offices and had hitherto been operating from Chandigarh, are in the process of setting up offices in Baddi. Motia Developers has been offering office space which is ready for occupation, and the company is awaiting possession certificate from the Himachal Housing and Urban Developing Authority.
Package effect
Misgivings, however, continue to exist about the future of realty as the Central Industrial Package, which had brought investment of hundreds of thousands of crores, had expired in March. Analysts feel that even if the existing industry sustained, it would go a long way in promoting Baddi as a realty destination. Land prices had, however, suffered a dip after the expiry of the package, and dealers who had invested in large chunks of land in the hope of cashing on the gains if the package was extended, were caught unawares. Boards indicating ‘land for sale’ had come up on several acres of vacant land in the area. Buyers are reluctant to come despite 30 to 40 per cent dip in the rates, observed a local realtor. Thus, Baddi seems to be an ideal destination for those wanting to cash in on affordable land and housing units.
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Classy courtyard
Jagvir Goyal A house builder is almost decided about the type of flooring he wants to provide inside his house. Earlier, the choice was among the terrazzo and marble flooring only. Now, vitrified tiles and wooden flooring are also considered. Mostly, a combination of different types of floorings is chosen. Real question is faced when the house has been built, inside flooring has been laid and the attention is drawn to the courtyard of the house. Back courtyard: A significant area around the house is floored these days. House builders prefer to lay flooring in the back courtyard unless a very large area is available. In case of large-sized plots, part area is provided with flooring and a kitchen garden is also developed. In most of the small and medium sized houses, the back courtyard is provided with flooring only due to two reasons: It is easier to clean and maintain the floor and secondly, the gardener has no direct access to back courtyard and has to be allowed through the inside of house if a lawn or kitchen garden is provided in the back courtyard of these plots. Front courtyard: Front courtyard has a lawn as well as significant floored area. A house builder tries to have parking space for at least two cars. The area from the main gate to the garage is provided with flooring. Size of the lawn depends on the plot size. Some people prefer to have a pavement between the front verandah and the lawn also. Others allow the lawn right up to the verandah. In nut-shell, significant areas get provided with flooring, both in the front as well as rear courtyard. Choice of flooring
There were times when concrete pavement was the unanimous choice for the courtyard. Terrazzo flooring was considered expensive. Then, crazy marble flooring became popular. Now-a-days, no one is willing to have plain concrete or terrazzo or crazy marble flooring in the courtyards. The choice is therefore among the following types of flooring:
All these three types of floorings are prevalent. Each of these floorings has its plus and minus points. However, any type of flooring will provide best service only if the following important points are kept in mind while choosing and laying slabs.
Base for flooring
Howsoever strong the Kota stone slabs or marble slabs or tiles may be, these shall not survive for long if a good base is not provided to these. For laying a strong base for flooring, all the vegetation and organic growth on the ground should be fully removed along with roots. The area should be well dressed and its level should be checked.
Flooring level
The top level of the floor should now be carefully decided keeping in view the level of verandah floor. General tendency among people is to keep a high plinth level with respect to road level to avoid entry of flood water or street water in the house or to accommodate the future raisings of the road. This plinth level of the building is fixed at the time of laying of foundations. Verandah floor level is normally kept half an inch below the plinth level. The level of courtyard pavement flooring should be kept at least 9 inch below the verandah level of the house.
Marking of levels
Once the courtyard flooring level is decided, it needs to be marked on the walls around the courtyard. Thereafter, a continuous floor level reference line is marked on the walls, 450 mm or 1.5 feet above the flooring level. This line is very important to be marked for accurate laying of courtyard flooring.
Slope of flooring
The courtyard flooring should be given a slope of 1 in 48 towards the drain or outside for easy drainage of water. Within the walls of the house, no slope is provided in the flooring of the rooms. However, courtyard flooring is required to have the above slope for easy drainage of rain water. To provide this slope, mark a slope line below the floor level reference line. This line will match with floor level reference line at the point of start of slope and then will slope downwards towards the exit. Base composition
The difference in floor level to be kept and the existing ground is now known to you. Deduct the thickness of top finish material (Kota or marble or tiles) and the base mortar for them from it. Balance of the difference in depth is to be made up by laying layers of earth, sand and concrete. For example, let the level difference in the ground level and floor level be 16 inch. Let the marble slab be 1 inch thick, and a ¾ inch mortar layer is to be laid below it. Thus, the balance 14 ¼” is to be made up with concrete, sand and earth.
Laying of earth and sand
Lay earth over the ground and well compact this earth filling. Lay the earth in not more than 6 inch thick layers, sprinkle it with water and ram each layer well. Well sprinkle anti termite solution over each layer of earth. Be liberal in providing this treatment. Next, lay a layer of sand over the earth filling. Keep the thickness of sand layer as 4 inch. Note that sand layer can’t be substituted by earth layer. Provision of a sand layer avoids settlement of floor. Choose clean and dry sand not having clay lumps in it. To compact the sand layer, frequently sprinkle water over it and compact it well.
Concrete base
Now, provide a 4-inch thick lean concrete base over the sand layer and compact it well to create a uniform base for laying flooring. Use 1: 6: 12 mix of lean concrete. Prefer to use 38 to 40 mm size brick ballast than stone ballast. Check the top level of concrete base with water level for accuracy. Using water level is the most accurate method for laying floors to correct level. Well compact the lean concrete by use of rammers. The base is now ready to lay courtyard flooring finish. The laying of floor topping i.e. Kota stone or marble or tiles should preferably be commenced immediately after 48 hours of laying of base concrete. To be concluded (This column appears fortnightly)
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Smooth deal
Vineet Singh on points to be kept in mind before sealing a property deal
Buying a property is perhaps the single biggest investment made by a person during his lifetime. Therefore, it is a requisite to be extra cautious while on a lookout for purchasing a property.
Location, location, location
The basic thing to be kept in mind while investing in real estate is the location. It is the most important aspect in the selection of property as the price is dependant on this. After zeroing in on the desired property it is advisable that the potential buyer studies the market for trends about prevalent rates of property in the vicinity and the last known transactions. A budget should be set for the required property type according to the market standards, as each property dealer has his own set rates, one needs to bargain and bring him down to his standard rates.
Reputation
The second priority is the builder reputation. If a buyer goes to a good builder, there is no need to verify things beyond a point because a good builder generally takes care of things like permission required for the purchase of the property. At the same time, there is no harm in conducting preliminary inquiries and having a run through with the lawyer. Do not buy a property if the title of property is not clear or marketable as it will cause problems in future and financial institutes refuse to finance such properties
Facilities
The third thing to consider is the list of amenities and facilities associated with the property. Proximity to transport hubs, schools, hospitals, markets, central business districts, entertainment centres etc need to be verified before finalising the property. Further it is also important to assess the potential resale value or the potential rental income of the property. There are certain points which need to be kept in mind when a buyer is buying a house in an under construction project. One should always ask for the allotment letter and the development agreement. The allotment letter contains details regarding the agreed price, payment and construction schedule, house plans, delivery date and builder’s liability in case of late completion or problems after possession. It is issued to the buyer upon payment of the 15 per cent of the property value to the developer. The development agreement is inked between the builder and the landowner and contains details regarding the terms and conditions on which the landowner has permitted development of his property. In case of constructed properties, one should ensure that the seller has the title and possession of the property as well as the right to transfer the property. A check needs to be done if the building adheres to relevant municipal/planning authority requirements. Also check whether dues such as property tax, society, water and electricity bills, etc. have been paid in full or not. Finally, when the house is handed over to the buyer, the builder needs to give a Completion Certificate. A completion certificate is issued by municipal authorities who verify that the building complies with the approved plan. This is required for registration and other government formalities for the house. The writer is Business
Head, 99 Acres.com
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Resurgent Amritsar
Geetu Vaid The realty sector in Punjab is emerging from the shadows of slowdown of the past over 18 months as can be gauged from the launch of new projects and hectic sale and purchase activity in different cities. Amritsar is among the most promising destinations for real estate development in the state. Though its proximity to international border with Pakistan has been the main reason for slow growth in the realty sector, the development is picking up pace now with a number of residential projects coming up in and around the city. Vineet Relia, COO, South Asian Real Estate (SARE)-India, a fully integrated Investment & Development Company, speaks about the real estate scenario in Amritsar. How resurgent is the realty market in Punjab in general and in Amritsar in particular? Punjab is one of the rapidly urbanising states of the country. The urban population in the state in 2001 was around 34 per cent compared to that of national average of 26 per cent as per census 2001 and it is expected to grow by about 50 per cent by 2025. Amritsar and Ludhiana are the two leading urban centres of the state. The current population of the city is over 12 lakh. Historically Amritsar has grown at a slow pace due to various reasons. But now, with better trade links and improved relations with Pakistan, it is anticipated that city can emerge as a major economic node in this part of the region. A number of inter-city (national and state level) highways pass through the heart of the city. It has a strong industrial base with approximately 10 per cent of the developed area of the city being under industrial and commercial land use and 44 per cent of the area is under residential land use. In the present scenario, is the growth more in the residential or in the commercial sector? For Amritsar the land use structure comprises residential sector as the main contributor constituting approximately 44 per cent of the total municipal area. The city has grown towards the northern, eastern and south-eastern directions with mix of both planned and unplanned residential developments. Colonies like S.G. Enclave, New Amritsar, bypass road and NH-1 etc. are the emerging planned residential developments of the city. The area under residential use has increased drastically, from 3,235 acres in 1971 to 9,043 acres in 2001, indicating the extent of the sprawl of the city. The percentage distribution of residential area was 43.99 per cent (2001). A serious challenge for the city is the rapid growth of slums and squatter settlements. There are 63 notified slums, which cover 14 per cent (1,309 acres) of the total residential area (44%) of the city. The city also has a highly concentrated central core with sparsely populated peripheral area. The sprawl of the city is haphazard due to unplanned growth, leading to the problem of congestion and chaos in the city core. In the residential sector, the cost is a major factor for investors. In the face of increase in material costs and government regulations, how do you plan to keep the cost factor down and in the affordable segment? SARE believes in delivering maximum value for the investment within the affordability bracket. We have launched lifestyle products with all the amenities including lifts, power backups, club etc within a secured gated complex at just Rs 1,850 per sq ft. We deliver this by maximising efficiencies across engineering, sourcing and design. At these price levels the investors only stand to gain many multiples. What do you feel about your company’s presence in Punjab, and its future plans and projects? Our first investment has been in Amritsar, which is now being launched and we hope to achieve sales of about Rs 750 crore in this project. We are close to signing off our second investment in Punjab which have projected sales of about Rs 1,000 crore. What is the status of NRI investment in Punjab in the current scenario? The past two years of turmoil in the global finance and real estate markets has seen the investment patterns change. NRIs are now lured with very exciting opportunities of investment in the western countries on account of devalue of properties even to the extent of almost 80 per cent in certain specific locations. On the other hand, the liquidity crunch with the developers leading to delay in projects has further dampened their sentiment in the state. Our strategy is to attract NRIs by offering comparable lifestyle in Amritsar with the western world and also by offering special investment options like pay only 15 per cent now and pay EMI after getting possession. This assures them of assured timely delivery and secure investment.
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Become co-owner to claim deduction
S.C. Vasudeva Q. I am a Central Government employee, and am living in Chandigarh (UT) in a rented accommodation alongwith my father, mother and sister. My father had retired as a Senior Assistant from Punjab and Haryana High Court, Chandigarh in 2008. After his retirement, a housing scheme was published in the newspapers for UT employees, including court employees, and my father applied under ‘C’ category (one-bedroom flat) costing Rs 17 lakh under 3 per cent quota for retired employees. The result of this scheme will be revealed by next month. Now his monthly pension is Rs 6,000 only. Therefore, for taking a loan for the above said scheme, I need to become a co-loanee, and half of my salary will go in paying the installment. Since I am paying almost the full amount of the loan, kindly let me know under which condition, I can seek exemption for home loan or under any other clause because it will be a double impact upon me as on one hand I have to show savings upto Rs 1,10,000, and on the other I have to pay the installment. How will I manage this as the pension of my father is very meager? Please suggest a way out for the same. — Lalit Sood A. Section 80C of the Income-tax Act 1961(the Act) provides for deduction from the total income, of an amount paid towards the repayment of loan raised from specified sources for the construction/purchase of a residential house. Such a deduction is allowable to the owner of a residential house within the overall limit of Rs 1,00,000. You have to be an owner of the residential house to claim such a deduction. The facts in the query indicate that you will be a co-borrower for the loan raised for the purchase of a residential house. You should, therefore, become a co-owner of the residential house in order to claim the deduction of your share of repayment towards the loan raised. The suggested procedure would also enable you to claim interest paid/payable on such a loan to the extent of Rs 1,50,000 against income from house property.
Disclosing purchase of land
Q. During the month of April 2010, I have taken loan of about Rs 35 lakh from my brother, husband and some other persons. The entire amount is taken through account payee cheques/drafts in my name. The amount of loan has been utilised by me for the purchase of agriculture land which is likely to be acquired by the government in the near future. The total cost of the purchased land is 45 lakh. The loan amount will be refunded as soon as I receive the compensation amount from the government.
It is also stated that my husband is a retired government employee, and he is regularly filing the income tax return. But I am a housewife and my total annual income is less than the prescribed limit for the women. So I am not filing any income tax return. Kindly advise me on the following points.
What is the time limit/procedure to repay the loan amount under the Income-tax Act? Is there any need to inform the IT authority about the above said loan amount and purchase of land. If yes, what is the procedure?
— S.K. Sidhu
A. Your queries are replied hereunder: There is no specific time limit provided by the Act for the repayment of the principal amount and the payment of interest thereon. Normally such repayment should be on the basis of the terms of the loan raised. However, in case no terms are specified, the loan should be repaid within a reasonable time say within a period of three to five years. The repayment should be made by an account payee cheque or an account payee bank draft. A person who is liable to file Income-tax return has to disclose the purchase of an immovable property in case the value thereof is Rs 30 lakh or more. The facts in the query indicate that you are not required to file your tax return as your total income is below the prescribed limit. In such a case, you have no obligation to inform the tax department about the purchase of the agricultural land. However, the information in this regard would be sent by the Sub-Registrar’s Office in normal course.
Expenditure on renovation
— K.K. Arora
A. On the basis of the facts given in the query, it is evident that the plans for the purpose of renovating your house were approved by the Municipal Authority.
In case you have evidence to prove that the renovation is in accordance with the plan so approved, you should obtain a valuation certificate from an approved valuer for the purposes of certification of the expenditure incurred in connection with such renovation. A Valuation Certificate supported by the approved plan should help you in claiming the deduction for the amount incurred for renovation for the purpose of computing the amount of capital gains tax.
The writer can be contacted at sc@scvasudeva.com
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Baddi, which remained a sleepy town in spite of the attractive industrial package offered by the government to stir development in the area, finally seems to be coming of age. Things seem to be looking up for the real estate sector with the coming up of several housing projects, and the first multiplex in this Tier-III township of Himachal Pradesh.
The Real Estate Asia Pacific 2010 report states that India is among the top real estate investment markets in Asia with Mumbai ranked second only to Shanghai and Delhi at the fourth position.