REAL ESTATE |
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AMRITSAR
GROUND REALTY
Platter full of festive offers
TAX TIPS
REALTY bytes
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On road to recovery
Neeraj Bagga Real estate agents in the Amritsar area are upbeat about the approval granted to the master plan for the city by Chief Minister Parkash Singh Badal recently. An area of 1394.19 sq km, categorised as Local Planning Area (LPA), will be developed as per the provisions of the plan. The move is being seen as good news for the realty scene in and around the city as it will act as a catalyst to drive the property rates in the holy city up, besides offering quality living conditions to its residents. The Amritsar Development Authority (ADA), however, has a gigantic task of implementing the plan effectively. Haphazard growth over the years has been the bane of this holy city, and the need for planned and regulated growth was being felt for the past several years. The state government's leverage to grant change in land use had added to traffic problems, congestion and transformed the character of many areas. For instance, the posh Mall Road, which was once a residential area with plenty of greenery, is now an upscale retail commercial hub. Construction of several buildings in these areas was contrary to the original plan. Residents did raise their voice against unregulated growth, but the state government overruled the objections and allowed builders to carry on with their activities. Hope for realty sector
The property prices in the city have remained stagnant since the slowdown in the real estate sector, and some thrust was required to bring upward movement in the prices in the city. Gurdhir Singh Virk of the city-based Big Deal Properties, said the master plan offered regulated growth and would provide the much needed upward thrust in the prices of real estate. He, however, added, "the city requires a thriving industry to sustain a healthy growth in property prices as well as to march forward on the path of development". Virk, rues the fact that the city had lost a chance to have a Special Economic Zone (SEZ) that had been announced by Prime Minister Manmohan Singh. The SEZ would have brought in infrastructural investment of about Rs 1,100 crore to the city, but the golden chance was frittered away due to political wrangling. In order to boost industrialisation and economic growth of the Amritsar region in a big way, the master plan suggests developing three more major industrial pockets over an area of 8,000 acres along the roads to Tarn Taran, Majitha and Mehta, besides the other industrial units forming clusters in and around Amritsar. Better set up for industry means the generation of more jobs and increase in the workforce, better business opportunities and all these factors go a long way in appreciation in the prices of property in the commercial as well as residential segments as has been the case in Ludhiana. There are already 10 big and small industrial clusters, including two focal points and an industrial estate, in various parts of the city. Two focal points are situated at Maqboolpura on Vallah road (mixed engineering and textile), and on Mehta road, and the Industrial Estate is at Chheharta. But all of these are in deplorable condition and in dire need of better civic amenities. Unorganised industry is scattered in East Mohan Nagar, along the GT Road towards Amritsar Engineering College, Puttlighar, Islamabad, GT Road, towards Attari, Verka Industrial area, along Batala road, Majitha road and Batala road. A majority of these are textile units. Industry watchers, thus, are keeping their fingers crossed this time as far as the implementation of the master plan is concerned.
Regulated growth, better returns
Parvinder Singh of Dashmesh Properties said if implemented in letter and spirit, the new master plan would lead to the development of several new urban townships. State-of-the-art facilities, ample wide roads and quality civic amenities would be the highlights of this plan. Over the past several years the city had seen haphazard and unplanned growth as there had been unregulated sale of land by some unscrupulous agents who had shown little concern for civic amenities. The gullible customers fell prey to the machinations of these agents just to avoid paying high External Development Charges (EDC) in an approved colony as these escalated the cost manifold. This led to the mushrooming of unapproved colonies. Haphazard growth and poor civic amenities reflect the absence of strict regulations in thwarting large scale construction, and also exposes the failure of successive governments in providing sufficient housing facilities for enough dwellings as per the requirements of the inhabitants. The much awaited ambitious plan envisages planned growth for the LPA offering development norms and development control regulation with specific traffic and transportation plans, which are major bottlenecks in path of progress at present. Parvinder Singh, also, anticipates a thrust in the prices of property as many old rules would be relaxed. Citing an example, he said the townships being developed near the bypass had to leave 365 ft patch open on the main road. But with the withdrawal of this rule, the developers can now turn the area into a commercial space, and this would ultimately lead to increase in the value of property in the area. Colonisers, realtors and investors are all waiting for the ADA to start its work of creating structure, design and organising the commercial and financial hubs in Amritsar so that the property index of the city shows some growth.
Relief offered by master plan
The master plan is, in fact, a belated attempt on the part of government to offer regularised and disciplined growth. The Amritsar Development Authority (ADA) would be the execution authority to implement it. The 1394.19 sq km area includes over 300 villages, which fall on highways and other major roads connecting the holy city. The inclusion of adjoining towns like Jandiala, Rayya, Raja Sansi and Majitha would help in connecting these with the Amritsar city, said Rajwinder Singh, a real estate agent. Within the MC limits, the ADA has a mandate to design, develop, re-structure and beautify those urban estates, which have not been handed over to the MCA. The authority is also responsible for the overall development and maintenance of commercial pockets within the urban estates already handed over to the MCA.
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Secure your house
Jagvir Goyal Every house owner wants to make his house burglar- proof. In the Tricity, people have often seen their houses ransacked when they are away even for a short period of just two to three hours. Panchkula has seen so many such burglaries in the past few years that now almost all families leave at least one member behind while going out of station. Though the burglars keep inventing new ways to tackle the security and safety gadgets and the number of thefts could never be brought to zero, a house owner can fairly deter the burglars by taking certain precautions and by using certain security gadgets in his house. Locks of any kind are no more a deterrent for the burglars who can break open the lock-bolts instead of locks, use gas-cutting sets to cut into steel and whatnot. Under such circumstances, electronic instruments can fairly alert a house owner of an attempt being made to forcibly enter his house and may even thwart such an attempt. Here are a few such security steps that can make a burglary quite difficult, if not impossible: Basic security features Certain security features need to be added to your house at the time of its construction itself. These are : Using steel grills in all windows and ventilators. There is a trend of providing large sized glass windows these days. These are quite unsafe unless highly toughened or burglar proof glass is used in them. But these glasses are highly expensive and are generally beyond the means of a common man. Provide single panel, 40 mm thick, solid wood external doors for your house. Provide tower bolts at the top and bottom on the inner side of all external doors. In addition, provide latch bolts on these doors. Provide tower bolts on the inner side of wire mesh doors also. Lock all these bolts while leaving your house. Avoid putting a conventional sliding bolt on the main door. A lock hanging in it when you are away, is a big invitation to the burglars. These days, you can fit such locks in the main doors which can be operated both from inside and outside and the outsider doesn’t get an idea. Plan electronic security for your house in the initial stages only, and get the electrical wiring done accordingly for the safety gadgets to be added to your house. Add one way, wide angle magic eye to the main door of your house, through which you could peer outside to check who is knocking at the door. Don’t plan an entry to the main house through the servant quarters or rooms. Security gadgets for use when you are in: Security gadgets can be divided into two categories, those which are useful when you are in and those useful when you are out. Choose following gadgets for use when you are in Video door phone: If you feel unsafe about opening the main door without knowing who is knocking at the door, use a hands-free video door phone. Through this door phone, you can view the person standing outside and can talk to him before opening the door. Choose a video phone that provides a view of about 25 feet radius and thus eliminates any chance of the visitor hiding himself. The door phone can provide both coloured as well as black and white pictures of the visitor. The coloured unit costsalmost twice as much as the black and white unit. Zicom and Godrej are reputed manufacturers of video door phone. The cost is around Rs 7,000 only. CCTV: Installation of Close Circuit TV system in your house may look odd to you but once installed, you become fond of it. CCTV has mono or colour cameras and can show live or recorded activities of the area in and around your house. It includes cameras, lenses, digital video recorders and monitors. Emergency switch: An emergency or panic switch installed at a most convenient and accessible place can be reached and pressed by you in emergency to convey to the pre-fered phone numbers and email addresses that there is an emergency and help may arrive in time. It costs a few hundred rupees. Security gadgets for use when you are out Sensors and control panel system: A number of sensors are installed in the house in this system. These sensors send messages to a microprocessor based control panel through wiring laid for this purpose. On receiving the signal, the control panel, if in ‘on’ position, activates an alarm loud enough to alert the neighbours. The control panel also automatically dials the pre-fed numbers of the police station and the house owner’s mobile number to convey an SMS or voice message there. The sensors to be installed in the house can be chosen. The security equipment suppliers offer glass break sensors for windows and glass doors, motion sensors to detect movements, contact sensors for doors, smoke detection sensors, fire sensors, gas detection sensors and water sensors to detect flooding or leakages. Choose the sensors you want for your house. In case, you have not got the wiring done for this system, you may choose wireless system that is available now. When there are frequent power failures or cuts or chances of burglars cutting off power supply of your house, a built-in rechargeable battery can be chosen to run the control panel system. Remote control: Certain security solution companies provide a remote control that can switch on or off all electric appliances in the house. It can also enable or disable all or some selected sensors. Biometric lock: A biometric lock, though costing around Rs 15000, unlocks only when the pre-fed finger prints are run over it. Such locks can memorise about 100 finger prints and thus can cover all family members. The lock also initiates an alarm if some unauthorised person tries to unlock it. Locks with PIN are also available but there are chances of their opening up in case an intruder strikes the right PIN. Therefore, biometric locks prove to be a better choice when installed on the main entries of the house. Biometric locks have a false rejection rate of 1 in 1,000 and a false acceptance rate of 1 in 1,00,000, thus these are very reliable. Internet video camera: This camera, also called wireless internet video, can send to you a live audio-video of activities in your house via internet. Internet video camera has its own web server and can connect directly to a network. A home network is created, to which this camera is connected. Thereafter, anything happening in your house is visible to you from anywhere in the world. While using safety gadgets like hidden cameras, alarms, video phones and CCTV, you may not want others to know of them or wish to talk about them. However, using these security gadgets may provide you your piece of mind while you are away on vacation. These days, security solution companies customise a security plan for you as per your requirements. So you may strike an economical plan and still remain aware of anything happening in your home, while traveling globally. More tips will follow next fortnight. |
Platter full of festive offers
The festival season is also the season of discounts and attractive offers and the plate of the realty sector, too, is laden with these attractive offers to motivate more and more buyers to finalise deals to purchase their dream home. With an eye on the festive season, many developers have started launching new projects as they expect good response and are looking to strong conversions in this auspicious period.
All builders, whether big or small, are optimistic that new launches and festival discounts will revive the buying decisions of the common man across the country. A report released by brokerage firm Religare Securities, reveals that the festive discounts and promotional offers by the builders will boost the volumes, which may also result in an upside of about 10 per cent in the property prices. “August has seen a number of new real estate projects and the launch momentum is expected to continue in the peak festive months of October and November,” it added. Moreover, revival in the infrastructure sector may also drive the real estate demand across various cities. The report also noted that the increase in property prices was not likely to adversely impact the demand. August had witnessed a number of launches growing over three-fold and about 59 per cent increase in the sales compared to the year-ago period, it said. A rush of special offers and discounts during this Diwali would certainly increase the sale volume as builders across India have innovated to boost sales in a sluggish market. Traditionally, the sector saw a 25 per cent jump in sales during what is considered an auspicious time to buy a home. The free offerings from builders include modular kitchens, furnishings and white goods apart from free parking slots. But that is not all. “Traditionally, the decision to buy a new house or a Grihapravesh is mostly made during the festive season. That is why almost every company floats special offers. We have also decided to celebrate the coming festive season by offering an LCD to all our clients who book a flat in any of our projects during this period”, said Ashwani Prakash, Executive Director of the Paramount Group of Companies Supertech had offered special festive offers during Navratras. On every booking, the customer will get 5 gms of gold and will also get an opportunity to be a part of the Lucky Draw where the customers can win a flat as the first prize. The offer is available on every Supertech project in Noida, Noida Extension, Ghaziabad, Greater Noida, Meerut and Moradabad. “With Navratras and Diwali setting up the festive mood, the sales experience an upswing as the festive season is considered a propitious time to invest in a home”, said Ravi Saund, Head Business Development, CHD Developers Ltd. Revving up the festivities, CHD Developers Ltd offers a discount of 10 % on the purchase of property during this season. This time indications are that the situation is back to normal, said one of the directors of a property firm in Mohali. He further added, “we usually make 30 per cent of our sales in one-and-a-half month period between Navratras and Diwali, and this time will be no different. Offerings indicate, the builders are confident of getting buyers for high-priced segment as well. “We are certainly seeing a significant return of interest in home buying this year, but a sustainable revival depends on a number of macro factors”, said Mangat Rai Baboota, of M/S Subhash Mangat, one of the leading property consultants of tri-city The mood among builders may be buoyant, but very few believe price hike is possible as demand is still hesitant and new supplies are hitting the market.
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TAX TIPS
Q. I am 72 and want to go for reverse mortgage of my house in Mohali. Kindly advise on this system and the banks that undertake this.
— Avtar Singh A. Reverse mortgage is a scheme which enables senior citizens to mortgage a residential house with a financial institution so as to derive a tax-free regular income. It is an arrangement whereby a mortgager, mortgages his house and takes a loan against the same. It enables senior citizens to avoid selling the real estate property in their lifetime. This concept is relatively new in India but is quite popular in developed countries. As indicated above, it enables senior citizens to mortgage their property and ensure a regular income by living in their own home without having to part with the same during their lifetime. The Life Insurance Corporation of India is planning to enter this area of business. The National Housing Bank already has a scheme of reverse mortgage loan-enabled annuity that was launched in 2007. The idea behind such a scheme is to make the immovable property more liquid and generate returns out of such an asset for the funds being used by the owner during his lifetime. The Finance Act, 2008, has now clarified the position with regard to the taxability of the amount so received. According to the present legal position, in case the mortgager mortgages his house and takes a loan against the same, which can be either a lump sum or in the form of installments, the payment so received under the reverse mortgage scheme whether in installments or as a lump sum will not be taxable. The capital gain will arise and chargeable to tax if and when the house is eventually sold by the mortgagee to recover the loan.
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Tax clarifications
Q. I have some queries regarding Income Tax provisions:
I have been allotted a plot by PUDA and am paying interest on the installments. Is it possible to claim the amount of interest paid on installments of residential plot out of my interest income from bank? I have inherited a house from my father through a Will. This was his self- acquired property. The Will mentions my name only. Can I treat its rental income under my HUF? If not, please suggest any ways to do so? — Sanjeev A. The replies to your queries are as under: The interest payable on installments in respect of a plot allotted to you by PUDA is in the nature of capital payment and will be added to the cost of the plot. Such payment of interest cannot be deducted from the interest income derived from bank deposits. Any act of impressing an individual property with the character of property belonging to the family otherwise than for an adequate consideration, will have the following consequences in view of the provisions of Section 64(2) of the Income-Tax Act, 1961 (The Act). The individual shall be deemed to have transferred the property concerned, through the family, to the members of the family for being held by them jointly. The income derived from such converted property shall be deemed to arise to the individual and not to the family. In view of the above provisions of the Act, if you adopt the course suggested in your query, you will continue to be liable to be assessed in respect of the rental income in your individual capacity. There seems to be no other option left for you but to treat it as an individual property. You can, however, make a Will whereby the property is inherited by the family of your son.
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Ideal gift for NRI daughter
Q. I intend gifting property to my daughter who is a student-cum-housewife in USA with Indian passport. She wants to have her own house in USA. Please let me know which option will be the best.
Gifted property is sold by her in India and sale proceeds deposited by her in her NRO account and utilised by her for purchasing a house in USA. She invests the sale proceeds in NHAI /RECL – government-approved bonds for three years and thereafter on maturity in NRO account and then utilize the money for purchasing a house in USA. What are the rules applicable for transfer of amount by Income Tax/RBI in this case? In case I sell the property and deposit the sale proceeds in three-year bonds, after maturity will I be able to gift the full amount to her? What will be my tax liability as also that of the recipient? My daughter has no income in India/USA. Please clarify if acquisition of house in USA against sale of gifted property from father will enable daughter to get the relief from taxability of capital gain in this case. — Gurudutt A. Your queries are replied hereunder on the presumption that the immovable property has been held by you for more than three years: In case an immovable property is gifted by you to your daughter who is settled abroad, a gift deed will have to be registered and stamp duty on the basis of the market value of the immovable property will have to be paid. A sale of the said property after receiving the gift, would make her liable to pay tax on the capital gain arising on the sale of such a property. She can invest the amount of capital gain arising on the sale of such immovable property in the acquisition of NHAI/RECL bonds with a lock-in period of three years. This will enable her to save tax on the gain arising on the sale of the immovable property. The amount received on redemption of such bonds will have to be deposited in her NRO account. She can thereafter remit such amount for buying a property in USA. The amount realised on the sale of an immovable property in the nature of a residential house belonging to a non resident Indian can be remitted after payment of due taxes without any problem. In case you sell the property and invest the amount of capital gain in the acquisition of tax saving bonds, it will be possible for you to remit the amount to USA after the maturity of such bonds. However, you would be able to remit a maximum amount of one million dollars per financial year without RBI approval. You would not be liable to pay any tax on the amount gifted to your daughter. She would also not be liable to pay any tax in India in respect of the amount of gift so received. The purchase of property in USA out of the sale consideration of immovable property may not entitle her to claim the benefit of tax in India in view of conflicting judicial decisions. The best course open to you would be to sell the property yourself and invest the capital gain in the acquisition of tax saving bonds and gift such amount to her after the maturity of the bonds. This procedure would also enable you to gift the indexed cost of the immovable property subject to the limits prescribed by the regulations under the Foreign Exchange Management Act, 1999.
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HRA and home loan interest
Q. I am working in Gurgaon and claiming house rent allowance for the rented house occupied by me there. I am intending to buy a flat in Panchkula. I want to buy this house for self occupation. The place would also provide a residence to my parents. I have raised loan from bank for buying the said flat in Panchkula. Can I get a deduction of the house rent allowance as well as of the interest on the loan raised for buying Panchkula property?
— S. Prakash A. The house rent allowance received by an employee is exempt under Section 10(13A) of the Act if the same is actually incurred on the payment of rent in respect of residential accommodation occupied by the employee`. The exemption is limited to the amount to be computed on the basis prescribed by the Income-Tax Rules 1962 (the Rules). Even if a salaried employee owns a house in the same city where he is living but is actually spending amount for occupying a rented accommodation, the exemption for house rent allowance can be claimed by him to the extent provided in the Rules. The interest payable on the loan raised for acquiring a property is allowable as deduction from income from house property under Section 24 of the Act. In my view you can claim the exemption of house rent allowance to the extent allowable to you as well as claim deduction for the interest paid on loan raised for acquiring a residential house.
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Exemption should be allowed
Q. I sold a residential house property in December 2009, and have earned a capital gain thereon. I had entered into an agreement prior to the date of selling that house with a third party for constructing a house on my behalf and had paid the amount of capital gain to the third party towards the acquisition of the said house in December 2009 itself (i.e. even before the due date of filing the return of income). The possession of the house has been given to me in August this year. Can I claim the exemption for the capital gain so earned which has been invested by me in the acquisition of the house within the specified period?
— K.K. Bedi A. In my view, the exemption under Section 54 of the Act should be allowed to you as it cannot be contended that merely an advance for the purchase of residential house property was made and there is no actual acquisition of the property because no conveyance deed has been executed within the stipulated time. This is because of the following two reasons: Even though the amount had been paid as an advance for the construction of the house, the possession has already been handed over to you before the due date of filing the return of income. The provisions of Section 54(2) of the Act would be inapplicable here. The provisions of the said sub-section regarding the deposit of the unutilised amount under capital gains scheme, can only be applied to the amount of capital gain which is either not appropriated or remains unutilised by the assessee for the purchase of the new house before the due date of filing the Income-Tax return. This provision stands complied as the amount had been utilised for the acquisition of the house by you before the due date of filing the return.
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e-auction of properties
Mumbai: Real estate services firm Cushman & Wakefield and global auction house Saffronart will kick off the first in a series of e-auctions of plush residential properties in the country next January. The bidding, to be done online for four prime properties initially, would be open for all interested buyers across the world, Cushman & Wakefield Executive Director (Residential Services) Akshay Kulkarni said in Mumbai recently. “The auction is the first-of-its-kind and will be open for all across the world. It will be an online bidding process that will start January next for residential properties,” Kulkarni said, adding that the properties identified are from the major metros, including Mumbai. Though both the firms have not yet zeroed-in on any particular date for the e-auction, they said it would be for 36 hours only. The base price for the properties has been fixed at Rs 5 crore, Kulkarni said. Cushman & Wakefield, along with Saffronart, also said they have released a catalogue showcasing luxury vacation homes in India. The catalogue, ‘Prime Properties Fall 2010’, enables buyers to choose from about six individual homes and three development projects in Goa, Chennai, Kodaikanal, Delhi, Kasauli and Hardwar. The three development projects consist of exquisite villas in Goa and Kasauli. While there are two developments in Goa with 12 and 44 villas each, Kasauli has about 35 villas. The individual homes, designed and styled by famous designers such as Tarun Tahiliani, among others, would start from Rs 2.5 crore onwards and are located amidst hills, lush green plains or on serene riversides. The highest price has been quoted for a property in Delhi. The properties are beautifully presented in a manner befitting their premium aesthetics, helping owners realise the appropriate value for their properties. Similarly, buyers get to discover properties that may otherwise be hard to find and benefit from a level of pre-screening, selection and information that is often difficult to come by for properties in India. — PTI Aster Court launched
Gurgaon-based real estate developer Orris Infrastructure Pvt. Ltd. has announced the launch of the second phase of its residential project — Aster Court. The project is located in Sector-85 of New Gurgaon, and will offer world class facilities to the Aster Court Phase II will open bookings for two and three bedroom apartments and the area of these units will range from 1250 sq. ft. to 2150 sq. ft. These units are priced from Rs 2750 per sq. ft. Other options which are still available are 3+1, 4, 4+1 BHK, from the total 1,150 units. Designed by internationally renowned architect Nelson, the project will offer world class infrastructural facilities like earthquake resistance structure as per seismic zone IV, 10,000 sq. ft. hi-tech club area with state of the art health club, swimming pool, gymnasium, tennis court, squash court and badminton court. The residents will also have the facility of supermarket, clinic, primary school, crèche, open theatre, party hall, water harvesting and ample parking space. — Based on information furnished by the builder
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