Boom time in valley of gods
Dehradun, Hardwar and Rishikesh have a lot to offer to home buyers, reports Neena Sharma

Arogyam project coming up near Haridwar (Top), will have luxurious service apartments along with a spa; and  Rishikesh, too, is being projected as an ideal destination for those looking for affordable second home in the area

The effects of resurgence in the realty sector have not left the tourism/religious belt of Dehradun, Hardwar and Rishikesh untouched. After a lull, realtors are once again wooing the prospective home buyers in the region with a variety of options tailormade to suit every pocket. Real estate companies are trying to cash in on the demand for houses among young professionals in Tier II and III cities, who are now willing to invest in property.

“These cities have seen an increase in the income level of professionals due to faster economic growth. There is a sense of buoyancy here, and despite rapid colonisation in the recent past, Dehradun has not lost its charm for those looking for a home in the picturesque valley. Along with this Hardwar and Rishikesh, too, have become centres of hectic real estate activity in the state,” said Deepak Bhardwaj, president of the National Real Estate Development Council (NREDC).

The demand for residential properties has risen manifold in the past few months. Aditya Builders and Developers, who have built Aditya Doon Shire at Sailok (on GMS Road), Dehradun, have so far sold off 140 of the total 250 flats in their six-acre project. The project has an integrated rainwater harvesting system with modern fittings in the bathroom, and fire fighting system for security.

“Our target group is defence officials and ONGC employees, who want to settle down here.

The buyers can choose between two and three-bedroom flats priced between Rs 15 lakh and Rs 30 lakh,” said Subash Ahuja, marketing manager of the Agarwal Associates, the group behind Adiya Builders and Developers.

In Dehradun the building activity is mostly concentrated along the Sahastdhara Road, Vasant Vihar, Hardwar Road, GMS Road, ISBT bypass, Shimla bypass and Rajpur Road.

Realtors are also trying to cash in on the demand for residential and office space in Tier-II and Tier-III cities. Most of these have ambitious projects lined up for the area, and the residents of Dehradun, too, seem to be developing a taste for apartments in high rise buildings.

“It is a sound investment for buyers as the price of their property is going to appreciate considerably in the coming years. When the buyers approach the estate developers, they have already done their calculation and know fully well that it would cost the same if they constructed a house on a plot or bought an apartment in a high-rise,” explained O.P Sinha, proprietor of Lotus Leaf, that organised a property show in Dehradun recently.

Housing projects are coming up in the neighbouring cities of Hardwar and Rishikesh, too. Cashing in on the religious image of Hardwar, Eminent Infradevelopers have planned a group housing complex Arogyam on 19 acres on NH-58.The project will have luxurious service apartments along with a spa in the vicinity of Patanjali Yogpeeth.

“Our concept brings everything — health, leisure and lifestyle — under one roof. It has been designed for NRIs, who would like to come here for peace and a spiritual experience. The one, two, three and four-BHK fully air-conditioned and furnished apartments would appeal to NRIs, retired bureaucrats and officials eager to buy a second home in the lap of nature,” said Guru Dev Chadha, president of Eminent Infradevelopers Pvt Ltd. He added that the growth in Tier-II and Tier-III cities will continue an upward trend as the prices are comparatively quite low there. The availability of land at affordable prices backed by the demand for organised realty in the future are some of the reasons that have fuelled realty growth in this region.

“One can buy a property at a reasonable price without feeling the pinch, and it is a good investment as the apartments are priced between Rs 15 lakh and Rs 58 lakh, depending on the size. We hope to complete the project by December 2011. In the first phase 464 apartments would be available for possession and 729 in the second phase,” added Chadha.

Meanwhile, in Rishikesh, too, Sunrise Technobuild Pvt. Ltd is ready with its Amaya project. The residential complex will be built on over three acres.

“The work on the foundation will be started shortly. We are offering ordinary and super deluxe flats,” said Sushant Khera, Executive, Sunrise Techno build Pvt Ltd.

Delhi Apartments Pvt Ltd is also coming up with Deep Ganga residential complex at the State Industrial Development Corporation (SIDCUL), Hardwar.

“We are catering to the needs of the mid-level executives and professionals who are keen to buy houses,” said Deepak Bhardwaj, Managing Director of Delhi Apartments Private Ltd.

“In Uttarkhand most of the land is leased out to realtors. There is no single-window system to oversee the clearances. Besides, red tape is one of the factors hindering the growth of realty sector in the state,” pointed out Bhardwaj.

A ‘cool’ investment
Property prices have seen a surge in Shimla, writes Charandeep Singh

The promotion of Shimla as a tourist destination has not come without its flip side. The ‘concrete march’ of commercialisation of tourism has robbed the ‘Queen of Hills’ of its serene ambience. But with commercialisation, the land prices have shot up and so have the rentals.

A recent auction of a 250 sq. yard plot by HIMUDA fetched Rs 1.86 crore. This gives a fairly good idea of the way property prices have appreciated in Shimla. According to Satish Pal of Shimla Properties, “it is impossible to buy a plot as there is no space left”. This is one of the major reasons why land prices are so high here.

Seeing this trend, people have started indulging in speculative trading of properties here. Profit booking has started on properties in prime locations. Outsiders cannot invest in non-agricultural land in Shimla on their own as property law allows only native/bonafide Himachalis to buy, sell or invest in property. Thus, many of the property deals are being inked as business partnerships between a local person and an outsider.

This has played a major role in jacking up property prices in Shimla. According to K.C. Sood, a real estate consultant in Shimla, “in prime areas like Brockhurst, that is close to Chhota Shimla, and Nav Bahar, the prevailing rate is about Rs 40,000 per sq. yard up from about Rs 30,000 per sq. yard in 2008. But there are no vacant plots available where construction can be carried out”.

Shimla falls in the prime ‘Zone A’ category of the Himachal Pradesh property zone. Built up structures for sale in urban areas within this zone require no state permission; only permission in rural areas is compulsory. Keeping this in mind, HIMUDA now plans to develop Shimla-4, ahead of Longwood and Brahari. This proposed township will have built in structures, and thus even non-Himachalis can invest here. “Because of the proposal to set up Shimla-4 in our vicinity, the land prices as well rentals have got a major boost in our area”, informs Nipun Thakur, a resident of Keleston.

“Earlier, the prevailing land rate used to be somewhere around Rs 18,000 per sq.yard, but after this news of Shimla-4 becoming public, the rates are now around Rs 25,000 per sq yard”, adds Thakur.

The realty sector is thriving in the New Shimla area also. “The prevailing rate is about Rs 50,000 per sq. yard and a built up two-bedroom flat would cost around Rs 40 lakh, whose original cost, at the time of launch of the project in 2005, was around Rs 21 lakh. “New Shimla is divided into phases, and there is no haphazard construction here”, says Gurjit, a local property consultant.

HIMUDA is also constructing flats in Shimla. “The flats constructed by HIMUDA always sell like hot cakes. Since it is government funded and Shimla is still not that very open to private builders, the response they get is always very encouraging” adds Ajit, who owns a flat built by HIMUDA in Shimla.

Some of the residential projects coming up in the area , include Campton Estates promoted by Sandwoods. Brig. Inderjit Singh (retd.), who is the property adviser for the project, said, “We are providing complete home solutions in Campton Estates. There is proper parking facility here. The project was launched about 10 months ago, and around 50 per cent flats have already been sold out. We are offering one-bedroom apartment at about Rs 27 lakh and two-bedroom apartment for Rs 44 lakh”.

Mahesh Sharma, General Manager of Shimla Goel Builders, says, “We are constructing about 30 flats in Sanjauli, and have got tremendous response to our project. The base price of our two-bedroom flats, which we launched about a year ago, was Rs 24 lakh, and as of today, we are selling the same flat for about Rs 28 lakh. So appreciation is there”.

Campton Estates is also providing management services in case the owner is not living in the flat. “If you have invested with us as a second home or as a summer retreat, we will take care of your flat in your absence”, says Brigadier Singh.

Another residential project coming up towards Kasumpti side is Apple County. Thus while the value of commercial properties has increased due to the growth of tourism sector, the continuously growing demand for commercial properties is putting a pressure on residential areas and hence, one can see a trend of appreciation for residential properties also.

Green House
Touch of creativity
Satish Narula

We have discussed how the introduction of various kinds of plants and other adornments can add to the appeal of a garden. The process is endless as there are so many elements that one can play around with. The use of statutes and figurines always enhances the beauty of the green areas in homes. Apart from being a unique mix of the bounties of Nature and of the creative talent of the owner, such additions also create a surprise element.

Inclusion of animal statues gives the garden a ‘complete’ look. In case you plan to include animal figures in your garden, it is better to place them in the midst of plants where these are visible partially. This gives a natural look. Prudent placement of colourful water bowls in different shapes not only looks good, but also attracts winged visitors to add life to your garden.

The inclusion of such artifacts gives garden a stop-and-stare quality. Such features give dynamism to the garden as one can change the look and feel of a garden often by just rearranging these features differently.

One can use sliced portions of a tree trunk as steps by burying half of it in soil. Similarly, small tree trunk sections could also be used to serve as stools and benches adding the aura of the wild to your garden.

Proper care and maintenance of these figures and displays is also a must, as discoloured, moss covered, or chipped displays speak poorly about the artistic talent of the owner. Most of the time gardeners prefer to use artifacts made from Plaster of Paris. These, though inexpensive, can get spoiled during the rainy season. So take care to repaint or change these when the effect of weather starts showing. It is better to get either stone artifacts or those made from fiber (as this is waterproof). The fiber adornments are low on maintenance and look natural, too. These come in a variety of shapes and sizes. Even hill stones are created with this material and those who want to add lighting effect, too, can do so as one can fit a bulb in these. During summers one wants to see water in garden but space constraint does not allow big water bodies. In such cases one can take a small shell of pearl oyster made from fiber. In this shell one could also grow some water plants.

Fortnightly alert

The much awaited and desired rain showers may pose a lot of garden problems, and the gardeners have to be fully geared up to face these. First of all don’t let water to accumulate and stagnate in the nooks and corners in your garden. As soon as you notice stagnating water, make way for it to drain. This can be achieved by making a thin deep channel to let the water out. You can also remove the basins around the plants so that there is no stagnation of water around the main stem lest it should cause rotting. You can also make a very low and gentle slope around the plant to allow natural drainage of water from the stem. The rain may be accompanied by strong winds that may snap twigs and limbs. Be prepared to remove these with a saw.

Tax tips
Exemption on service tax
S.C. Vasudeva

Q. I have given a commercial property on a monthly rent of Rs 1,05,000 w.e.f. February 19, 2010. For the financial year 2009-10 total income is only Rs 1,42,500 and therefore no service tax is payable. My rental income for the financial year, 2010-2011 will be Rs 12,60,000 and no other service taxable income please clarify.

For the financial year 2010-11 whether there will be service tax on total rental income of Rs 12,60,000 or on Rs 2,60,000 only after deducting Rs 10 lakh threshold exemption, being the first year of rental income? I have come to know from my CA that during the first year of rental income exceeding Rs 10 lakh, the threshold exemption of Rs 10 lakh is allowable, being the first year, which is not allowable in the subsequent years. Whether threshold exemption of Rs 10 lakh is available only for the first year or every year if the taxable value of rental income exceeds Rs 10 lakh. How much will be the service tax liability for the financial year, 2010-2011 in the present case. Our firm is a partnership firm consisting of two partners i.e. husband and wife. Land and building is registered in the name of the firm. How the rental income can be bifurcated in the name of husband and wife (partners) in the future, to save the service tax. — A.S. Samran

A. Your queries are replied hereunder:

You would be liable to pay service tax on total rental income of Rs 12,60,000 less the amount of house tax paid in respect of the commercial property which has been let out.

The threshold exemption is to ascertain whether an assessee is exigible to service tax. It has no relevance for computing the taxable value.

Presently, the applicable service tax rate is 10 per cent plus education cess of 3 per cent thereon.

Service-tax would be payable on the rent received by the partnership firm.

It may be added that Delhi High Court has recently stayed the leviability of service tax on rental income. However, the stay as granted by Delhi High Court may not be applicable to a property situated in any other state until and unless a general stay is granted by the jurisdiction of High Court.

GPA deal

Q. I had purchased Registration Number of the residential plot from its original owner in 2002 for Rs 3 lakh. The allotment of plot was made in the name of the original owner of the Registration Number in July, 2005 who further got this plot transferred in my name from PDA authority in September 2005. The possession of the plot was taken by me in October 2005. The entire price of the plot along with interest was paid by me within a period of four years in installments. After paying the entire cost, I also got the conveyance deed executed in my name in February 2010. The total expenditure incurred by me was Rs 27.73 lakh. I sold this plot in May, 2010 on Power of Attorney and agreement at the circular rate fixed by the government for stamp duty purpose and received Rs 60 lakh from the purchaser. The amount is kept in my saving account. Kindly advise me on the following points:

Whether the plot can be sold on power of attorney and agreement.

What is the amount of capital gain chargeable to tax.

In order to avail exemption from paying tax on capital gain can I purchase residential plot in spite of the fact that I already own residential houseS in which I have been living for the past 25 years.

How much amount is required to be invested in long-term specified bonds for availing the exemption from paying tax. — Randeer Singh Pandher

A. Your queries are replied hereunder:

A General Power of Attorney (GPA) is normally executed so as to enable the holder of such attorney, to exercise all the powers in respect of various matters listed therein. In case of sale of an immovable property normally a sale deed should be executed so as to convey all the rights in the immovable property to the buyer. It is not clarified in the query as to why a sale deed has not been executed.

A GPA executed by you would enable the holder to get a sale deed registered in the name of the buyer or his nominees. The execution of power of attorney in favour of the attorney holder does not lead to a sale of property in terms of the Transfer of Property Act, 1882 but as the possession of the property is handed over to such attorney holder at the time of the execution thereof, it is considered to be a transfer in accordance with the provisions of the Act.

You can avail the exemption from the payment of tax on the capital gains, in case you invest the amount of capital gains in the purchase/construction of a residential house within the specified period. No exemption would be allowable in case the amount of capital gain is invested in the purchase of a residential plot.

The amount of capital gain is required to be invested in the acquisition of tax saving bonds within a period of six month of the date of transfer of the capital asset so as to claim exemption from the leviability of tax on capital gains arising on such transfer.

Setting off STCG

Q. I have recently bought a flat in Gurgaon and am living in it along with my parents. The interest payable to bank in respect of a loan raised for buying the said flat is Rs 3,50,000. I held certain shares which were sold during the financial year 2009-10 and have earned short-term capital gain thereon. Such gain would be approximately Rs 1 lakh. Is it possible for me to set off such gain against the loss from house property? — Mohammad Usmaan

A. The deduction in respect of interest would be limited to Rs 1,50,000 and the loss arising from property which is self-occupied can be set off against your salary income or any other income earned during the year. However, such a loss cannot be set off against short-term capital gain as the same is not permitted under the provisions of the Income-tax Act 1961 (the Act).

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

Real Talk
Urgent need for policy reforms
Geetu Vaid

The Omaxe group is one of the leading real estate companies in the country. It has a successful trail in township, group housing, commercial-shopping malls, office space, hotels, bio-tech parks, IT parks, SEZs and a presence in 32 towns in 10 states. Rohtas Goel, the Chairman and Managing Director of the company, who is also the President of National Real Estate Development Council (NAREDCO), an apex regulatory body established under the aegis of Union Ministry of Housing & Urban Poverty Alleviation working for the development & promotion council for housing, real estate and allied sectors in India, shares his views on the resurgence of realty sector in the northern region and his company’s vision.

Is the Indian realty sector back on the rails in the real sense?

Yes the realty sector is certainly back on the rails, and we are again witnessing a rise in demand and this is a good sign for the realtors. One good sign is the increase in demand for affordable housing, which was untapped until recently. There is huge growth potential in this segment.

Is the present atmosphere conducive for those looking for affordable housing in the Northern region?

Yes. We have projects in Ludhiana (Omaxe Royal Residency), Bathinda (Omaxe City) and Chandigarh (Omaxe Chandigarh Extn.) and we have witnessed a huge demand for these projects. This makes me believe that the region is growing in terms of demand for both luxury as well as affordable housing. Apart from residential there is a huge demand for commercial space also.

Omaxe has a number of residential as well as commercial projects in the northern region. Which regions, according to you are the key investment areas for those looking for a right investment in real estate?

Peripheral locations in North India offer high investment avenues. As the Indian realty market is getting organised, such corridors are emerging as strong investment destinations for investors. Places such as Ludhiana, Patiala, Ambala, Mullanpur, Rohtak, Palwal, Sonepat, and Baddi in the northern region are blessed with sustainability, real estate growth momentum and favorable economic environment. The developed infrastructure, lush green environment, open spaces, are the vital initiators for nurturing the tremendous growth potential of this region. Already a number of assorted residential colonies and fancy commercial spaces are in developing stage where investors can invest their money. A lot of investors are investing in our projects located in these areas which demonstrate the demand dynamics in the region.

What are the lessons that the realtors and investors need to learn from the recent downturn in the sector?

The lesson that I feel that is learnt by the sector is that we should launch projects according to the need of buyers in a particular region. There is a need to conduct an in-depth study of the market before launching a project as this helps in understanding target group and the buyers also start associating with the project if it meets their requirements.

How viable are the commercial ventures in the northern region in the current scenario?

Our group has commercial projects in both Ludhiana and Mullanpur, near Chandigarh, and we have witnessed a very positive demand for both of these. So we don’t see any reason why we shouldn’t continue to launch more commercial projects in the northern market

Realty sector is in the need of policy reforms. Which are the key areas that should be covered in this regard?

Development in the real estate sector symbolise this changing face of India, and policy reforms to ensure smooth functioning of the sector are the need of the hour. There is also an urgent need to take on a separate regulator that would support and protect the interest of consumers, investors and developers. Moreover, a strong need of industry status has been felt by sector to bring financial stability to this capital-driven sector.