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Missing the fast lane
GREEN HOUSE
Landscaping at St. Stephens School in Chandigarh. Photo by the writer
Steel strength
Tax tips
LAUNCH PAD
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Missing the fast lane
Geographical location as well as lack of industry and infrastructure have made Ferozepur one of the few areas in Punjab where the realty scene has failed to gain momentum over the years, writes
Charandeep Singh
Ferozepur, which was one of the richest districts of undivided Punjab, now has nothing much to write home about as far as the realty scene is concerned. While real estate market in other parts of the state has shown significant improvement over the past few months, Ferozepur is one of the few places in Punjab where land prices have remained stagnant with almost negligible growth in the residential, commercial or rental segments.
Farming remains the mainstay of this area, which is woefully devoid of any major industry. Ferozepur was the acme of prosperity before Independence, but the Partition sounded a death knell for all its hopes of developing into a progressive city. After Independence it became a border district and, thus, suffers from the handicaps of being one. Why the real estate scene here is not as hot, as it is in the other parts of Punjab. Is it the geographical location or the lack of political will that has made Ferozepur backward? Though the same national highway touches Jalandhar, why is the land adjoining national highway in Jalandhar five times costlier than what we have in Ferozepur? These are some of the basic questions that rankle in our minds when we cogitate about Ferozepur. What went wrong and where?
Ferozepur is, perhaps, the only town in Punjab, which boasts of a very heavy government set-up. It is a Divisional Centre for Indian Railways, the headquarters of Border Range of Punjab Police, a divisional centre for administration with senior bureaucrat of the rank of Divisional Commissioner operating from here, plus it boasts of having one of the largest cantonments of the Indian Army. A Division of BSF is also deployed here. With such heavy government paraphernalia, the town should be sparkling in infrastructural development, but the ground reality is very much different and dismal. It is counted amongst the most backward districts of Punjab. “We in Ferozepur don’t have any major industrial units. In this age of industrialisation, not having any industry is hitting us badly, and as a result the area and its residents are at the receiving end”, says Raminder Singh, Divisional Commissioner Ferozepur. The Hussainiwala border is 7 km from the main town. This proximity to border has proved to be a major roadblock in the development of industry in the area. Even agriculture is not that roaring, because 50,000 acres of land is beyond the electrical fence where the farmers can plough and irrigate their land only from 8 am to 5 pm. “It is a border district and even the border is closed. For the past over 40 years there has been no trading. Kasur, the Pakistani town which is on the other side of the border, too, is in shambles, because there is no trading from across the border”, says Sukhpal Nanu, MLA from Ferozepur. In the pre-Partition days Ferozepur was a major centre for trade and an important educational hub, as the first B.Ed. College was set up over here. “Another thing, if we talk of geographical limits, the cantonment of the army is surrounding our town from two sides, hence the town cannot expand. There is the option to expand only towards Zira Road and Makhu Road, and a few new colonies have come up over there”, informs Nanu. Development in other parts of Punjab has had a cascading effect on Ferozepur. “People from other parts of Punjab sell their lands over there and buy here as land is not that costly in Ferozepur. But lack of good educational institutions has made many residents of the town and areas surrounding it to move to other cities in the region. In our area the outflow of people is more than the inflow”, says Gurjit Chahal a landlord from Ferozepur. Faced with the paucity of migrant labour, people are forced to migrate to other cities. Since people move to other cities, the vehicular density on the roads is less. “One of the road developers who had built roads in various parts of Punjab, refused to build roads in Ferozepur on BOT mode, as he feared not being able to generate much funds at the toll plaza due to thin vehicular traffic”, says a government official on the condition of anonymity. As such property prices in Ferozepur are not as high as they are in other parts of the state. Lukewarm market Ferozepur is settled around NH-95 where the price of land per acre is around Rs 75-80 lakh. Land prices in Ferozepur are less but they are more in Fazilka and Jalalbad, since Fazilka is a known market for cotton and Jalalabad and Guru Har Sahai are known for rice shellers. The price of land per acre in the interior of the villages varies from location to location, but is generally in the price band of Rs 15-20 lakh per acre. “But the agricultural land which is in the 5 km radius of the main city is valued around Rs 30-35 lakh per acre”, says Bikram, a property dealer in Ferozepur. Since the town is not very densely populated, the rentals, too, are not very high. “One can have a fully furnished two-bedroom set for Rs 4,500 per month”, informs Bikram. However, PG culture is slowly becoming popular here ever since engineering and dental colleges have become operational over here. As far as the commercial rates go, first of all there is more supply than demand. Some of the furnished properties have been lying vacant since a long time, and as such this affects the rental value of the property. “The main commercial area of the city, the Malwal road, has an office complex on the ground floor going for rent at around Rs 28 per sq. ft”, says Ramesh Mittal, who owns a commercial building in Ferozepur. However, there has been some kind of movement in the newly developed areas like Preet Nagar, Ekta Nagar where the rate, as of now, is around Rs 1.60 lakh per marla. Even in Vikas Colony where the entire colony has been sold out the rate is somewhere close to Rs 1.70 lakh per marla. Remedial action “We don’t have big builders in Ferozepur. The government should make a programme whereby a PUDA approved colony is set up here. This will give a fillip to the real estate scene in Ferozepur in a big way”, says Nanu. Since proper infrastructure is lacking, industrial units are not being set up here. The state government should set up a SEZ over here. The tax incentives and easy availability of land in Ferozepur would improve the chances of this area. The infrastructure of the border town should be developed on priority basis. “In order to prop the city up, the tourism factor of the city should perk up. When tourists come, a lot of hotels and lodges would come up which in return would push the real estate index upwards”, says Chander Shekhar, DGP, Railways and Traffic, Punjab Police. The overall development of the area will get a boost and the real estate market, too, will show some positive growth.
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Landscaping as a learning tool Satish Narula There is ample awareness about the greening and beautification of surroundings among people.Even foreign collaborators take into consideration the ‘working environment’ before entering into collaboration. When we talk about landscaping vast expenses of estates, there are different ways and themes in which landscaping work can be carried out depending on the kind of premises. Thus landscaping for an estate, a religious place, a medical, a marriage palace, club or a school will have to be planned and carried out differently. Landscaping on school premises is an important aspect in creating an atmosphere conducive for learning and growth of young minds. It is more than making a bed here and a bed there. There has to be a holistic approach. The school gardens have to be a laboratory where the students learn the art of multiplying and rearing
plants.
The landscape planning on school premises includes many aspects besides the beautification with plants. Here we need trees that provide ample shade. These should be planted along the boundary walls and in the periphery of sports area. Care has to be taken not to plant trees that are weak stemmed and are prone to give shelter to various insects that make these weak from within. The use of fruit trees should also be avoided. For both beauty and utility, a part of the area can be devoted to a waterfall or a water feature, which could be used to rear fish, too. Some of the aquatic plants like the hydrilla, salvina, pistia, azola etc could be an added attraction besides serving as good educational tools. The school garden should also have a herbal garden which can be used for educating the students about the age old alternate system of medicines. The herbs that can be planted include stevia, aloe vera, akarkara, brahmi (both cintella and biccopa), lemon grass, citronella, catharanthus (sadabahar), ratti, tulsi (various kinds e.g. Ram tulsi, Shyam tulsi etc), different kinds of mints, haldi, puthkanda, bansa, adathoda etc. Such plants could be labeled carrying information about their importance and the plant parts used. Another important aspect of horticulture can be propagation. Schools buy indoor plants and keep them on the premises. However, there is no provision for such plants for recuperation. In fact, a separate nursery and a green house with a provision of an overhead sprinkler watering system that saves a lot of labour. In such kind of structure, there could be held botany classes for identification and propagation by the students.
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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Steel strength Use of steel frames instead of concrete pillars to build houses, apartment blocks, commercial warehouses is a concept that has been around in the West. Now the same technology that adheres to international building and safety codes will be available in India. Ludhiana-based Niagara Infrastructure Engineering and Architecture (NIEA) has tied-up with California-based Framemax, who are the pioneers in steel framing with production facilities at China and USA. The Indian production will take place at NIEA plant in Ludhiana. The technology offered is galvanised steel which is rust proof, mold resistant and waterproof besides that steel carries 50 years (extendable) warranty against any form of corrosion. The steel frame holds up good and provides security, strength and does not give that hollow feeling as the gaps between frames are packed with composites, insulated material and even a layer of concrete, says Vikram Soni Managing Director of the NIEA. The roof between each floor is 12 inches thick, it is packed with steel sheets, a 2-3 inch layer of cement and specially developed insulation to give it the needed strength. Since the building is insulated it requires it lesser air-conditioning. Critically the foundation is made of concrete and is the same as any other regular concrete building. The lift shafts and other maintenance shafts are of concrete. The building can go up to height of 240 feet — some 22-storey high, says the NIEA. Phil Ellis, President and CEO of Framemax assures, we have done similar buildings in San Deigo, USA, that is in high seismic zone. The Indian company is optimistic, Soni has invited builders and architects to see the product “we hope to get business enquiries of 5 million sq ft. We will construct a sample building for people to come and see, and assess the strength and safety features”. The two partners claim “we will be 15 to 18 per cent cheaper than concrete besides that be three times faster to construct as steel frames are pre-fabricated in the plant”. The target audience is affordable housing projects in the government and private sector, says Soni. Ellis explains, a large part of the traditional concrete structure is built in a way so that the heavy cement and steel rods hold themselves up. With steel that is obliterated it is light weight and does not put that kind of weight on the pillars just to hold up the building. In case steel frames building
materials can be recycled again at the end of building’s lifecycle.
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Chic Chandeliers
Sharmila Chand speaks to Sudhir Pasricha, General Manager, Lighting Division, Jaquar Concept Lighting, about the latest trends in chandeliers
Fashion being a cycle repeats itself in intervals of time. From colour, material, form, function, application etc, all chandelier design attributes follow trends and brings about a new look every time. There are various aspects for chandeliers like designs and colours. New forms/Designs: Chandelier being one of the iconic products in interiors has seen various art eras. It holds high fashion statement for the interiors even today. Chandelier form/designs are getting inspired by the combination of different cultures- Art deco, Neo- classic and Baroque. Forms/Designs are derived by a mix and match of these.
Material and finishes: Unlike few years back people now prefer a less experimented material which has been used and trusted through years. Brass, wrought iron and stainless steel are the evergreen favourites. The current educated consumers have well understood the dependency of durability in base materials. Substitute of looks is the punch line for product finishes. All types of finishes plastic colours, antique, wood, nickel, lacquer, chrome, gold etc are placed well in the market and each finish maintains its status. Gloss and matte have also become a choice based selection. Plating and coatings that deliver durability and new looks are also welcomed by the industry. Adornments of chandelier has also widened its material range, crystals, fabric shades, glass drops, casted metal ornaments, wood finishings and marble carvings have become popular. How popular are chandeliers as an interiors concept? Chandeliers are an important factor in interior designing to bring about a new look/ theme. For every lifestyle product there is an amalgamation of foreground and background. Foreground being the product itself and background the interiors. Interiors play a major role in defining its lighting design (chandeliers, pendant lights, wall, table lamps etc). Product designers follow the current interior trends and accordingly give a language to their designs. Key is still “customisation” and “uniqueness”. TIPS TO TAKE care
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Gifting not a good choice S.C. Vasudeva Q. My father had purchased a residential plot for Rs 15,000 in July 1982 at Jalandhar. I and my father started construction of a house there in 2007. But the same could not be completed as I got transferred to Delhi in December 2007. The property is 85 per cent complete (wood work, sanitary work, face work and paint work is still pending) The cost incurred is Rs 10 lakh. After his retirement, my father is staying in his own house at Patiala. I want your advice on the following: Scenario 1 We sell that house. The tentative price is Rs 22 lakh. Please do let me know the capital gains in the case. What is the tax liablilty and how my father can save the same by investing in another residential property. Scenario 2 My father wants to gift that property to me, and wants me to sell it on my own. In that case, what will be my tax liability and how can I invest that money. Also, please suggest which is a better option of the two? — Dinesh Sharma A. The facts in the query indicate that the residential house, the construction of which was started in 2007, is not yet complete and, therefore, may not be categorised as a “house” for the purposes of allowing exemption under Section 54 of the Income-tax Act 1961 (the Act). The department is most likely treat the incomplete house as a capital asset other than a residential house. The reply to your query is therefore based on this assumption. The capital gain on the basis of the figures indicated in the query would work out at Rs 8,11,775. The above figure has been computed after giving benefit of indexation in respect of the cost of land and the cost of construction thereon. The said amount of capital gain would be exigible at the rate of 20 per cent plus education cess of 3 per cent thereon. In case your father is keen to seek exemption from the taxability of the said amount of capital gain, he has an option to either purchase or construct a residential house by investing the amount of net consideration (i.e. Rs 22 lakh less expenditure, if any incurred wholly and exclusively in connection with the sale of incomplete residential house) within the specified period. The specified period for the purchase of the residential house is one year before or two years after the date of sale and for construction it is a period of three years after the date of sale. In case the property is gifted to you, it will involve execution of gift deed in your favour on which stamp duty on the basis of the market value of the incomplete house will have to be paid. The gift deed will have to be duly registered with the Sub-registrar’s Office. This will enable you to get the mutation done in your favour in the municipal records. The sale of such incomplete house would involve capital gain. However, you may not be entitled to the indexation as the department is of the opinion that indexation should be allowed from the year in which the capital asset is held by the assessee. For example in case the gift is made to you in 2010, you would be entitled to claim that such incomplete house is a long-term capital asset but in case the sale is effected in the year 2010-11 itself, the cost of Rs 10 lakh and Rs 15,000 would be deductible from consideration of Rs 22 lakh for the purpose of computing capital gain. This would mean that you may not be allowed the benefit of indexation for the period for which your father had held the incomplete residential house. It would be advisable that the incomplete house is sold by your father so as to get the maximum benefit permissible under the provisions of the Act.
Funds for constructing house
Q. Can I save tax on the long-term monetary gain, received from the sale of urban land, by investing in the construction of a house? The house is being constructed by my husband on his ancestral rural land and will be self-occupied. If yes, kindly let me know the formal official procedure. — Pavitra Gathania A.
The tax on the long-term capital gain arising on the sale of urban land can be saved provided the net consideration received/ receivable on such sale is utilised for the construction of a residential house in the name of the same person who has sold the urban land. Therefore, in case the urban land was in your name, the net consideration will have to be utilised for the construction of a residential house in your name. Such utilisation should be made within a period of three years after the date of sale of the urban land. In case the utilisation is not made before the due date of filing the tax return for the financial year in which the capital gain arose, the amount of net consideration less any amount spent towards the construction of the residential house should be deposited in a designated bank account under a capital gain scheme. The amount so deposited should then be utilised for the construction of a residential house. In case the land on which the house is constructed is owned by your husband, it may not be possible for you to save the tax exigible on the capital gain arising on the sale of urban land. The term ‘net consideration’ specified hereinabove means the consideration received or receivable for the sale of the urban land less expenditure incurred wholly and exclusively in connection with such sale.
Tread cautiously
Q. I read your following reply with regard to buying overseas property under Section 54. I wish to know if litigation is the recourse, then how should one go about that. To elaborate my question, if I sell my residential house in India and wish to buy one immediately overseas then I need a certificate from CA that tax has been paid on the money so remitted. And no CA, I guess, will give a certificate on the basis of Bombay Tribunal judgement in Prema Shah Case. If that makes sense, can you tell me what should be the line of action and sequence of events to claim exemption, assuming there is no way to avoid first payment of capital gains tax in case I want to buy foreign property immediately. What only I could think is as follows Pay tax, take CA certificate, and take money overseas and buy property equivalent to capital gain. Get overseas property documents certified from the Consulate General of India along with an affidavit that it will not be sold for three years. File a return attaching documents and claim refund of tax paid giving reference of Prema Shah case. Now let it go under litigation. After expiry of three months the department will have to pay interest at the rate of 1 per cent p.m. and after three years of litigation procure a Consulate letter that the property is still in my name. My sense is since Section 54 is silent, so NRI who need a place to live in should not be discriminated against. — Deepak Dhawan A.
The exemption from the taxability of capital gain arising on the sale of a residential house is available in case the capital gain is utilised for the purchase or construction of a residential house within the specified period. I, therefore, presuppose that you have a residential house in India which you would like to dispose off and utilise the amount of capital gain arising on the sale of such residential house for purchasing a residential house outside India. In case the proposition made above is correct, then you may follow the course indicated in the query. This may involve litigation for which you seem to be prepared. However, the entire process explained in the query by you will have to be completed within a time frame which would involve a very fast work on your part. For example if the residential house is sold in October 2010, the entire process will have to be completed by July 31, 2011, being the last date of filing the tax return in case of an individual. Further, the tax leviable on the capital gain should be paid before March 31, so as to save interest under Section 234B of the Act. I hope you can plan your affairs accordingly.
This column appears weekly. The writer can be contacted at sc@scvasudeva.com
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LAUNCH PAD
Avenue 71 CHD Developers Ltd. has launched the third phase of its premium residential township, Avenue 71—The Posh Life, project. Spread over an area of 16.5 acres, Avenue 71 is a premium project with G+4 / G+14 storeys located strategically in Sector 71, Sohna Road, Gurgaon, and worth over Rs 500 crore. High on features and entertainment, Avenue 71 also features an open air theatre for its residents. The state-of-the-art community club consists of luxurious facilities such as swimming pool, jacuzzi, steam & sauna, billiard’s pool, cards room, reading room, Sun deck, a 50 seater theatre and a multi-purpose hall etc. LOTUS ZING The 3C Company has announced the launch of another green residential project – Lotus Zing. The company already has other projects Lotus Boulevard, Lotus Boulevard Espacia and Lotus Panache where construction is on. The company has tied up with Kotak Real Estate Fund for this project, which has a total capital outlay of Rs 850 crore. Targeted at the young achievers, Lotus Zing is spread over 17.5 acres in Sector 168, on the Noida Expressway. Offering one, two and three BHK apartments priced at Rs 16 lakh onwards, the project is tastefully crafted for a generation which strives for excellence. Speaking at the launch, Vidur Bharadwaj, Director, 3C Company said, “Lotus Zing strengthens our vision to provide sustainable green and healthier living by creating buildings which are truly sustainable in form function and use.” TECHNOPOLIS2 The Ocus Group has announced the launch of Ocus Technopolis2, Gurgaon’s first ultra efficient commercial project. The group already has the Ocus Technopolis on the Golf Course Road in Gurgaon. Spread over an area of 2.43 acres in Sector 51, Gurgaon, Ocus Technopolis2 will have a range of office blocks/ business suites overlooking the wide and open expanses of Sector 51. The host of on-site and nearby amenities in and around Technopolis2, add a unique point of appeal to the address. It will boast of flexi offices, furnished business suites, business centre, several fully-equipped conference rooms, F&B outlets, multi-cuisine take-away and a world class retail arcade among other facilities. Based on information provided by the builders.
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Satish Narula
In Conversation
Gifting not a good choice
Chandeliers have been considered like art pieces down the ages and are associated with grandeur and style. What’s the latest trend in these?
New
colour: Colour combinations that were never seen before are getting more popular now. Salmon rose, Rose dust, palace blue, vibrant green, fushia red are amongst the most popular colours being used today. The demand for customised colours is also high. colours matching with walls, furniture, carpet etc have become the basis of choosing chandeliers, while some may prefer colours that are in contrast to their interior theme. To keep up with the demand for new colours, the crystal industry is keeping up with colour variety from the pantone base to provide an overall feel to the chandelier. For instance, the spring summer 2008-2009 forecast had black as the ultimate colour for decorative lighting. Jet colour of crystal was introduced to compliment the black frames in the chandeliers.