PATHANKOT
SLOW MARCH
Charandeep Singh

Dalhousie road is witnessing construction activity

The realty market in Punjab has been on a high and has reflected the positive trend being witnessed all over the country. In all major cities in the state the property prices have shot up significantly over the past few years. According to some estimates, property rates in Punjab have risen by 30% to 40% within just 12 months. But there are some pockets where the realty bloom has failed to blossom and not much acitivity is taking place in this sector. Pathankot is one such city. Being a virtual gateway to Jammu and Kashmir and Himachal Pradesh, Pathankot proves to be a charming picnic spot and a suitable stopover for the tourists headed for hill stations like Dalhousie, Chamba etc. "Being a border town the typical Punjabi culture is missing here, neither does it boast of a typical Himachali culture. It is a slow-moving city", says Manoj Shandil, a Pathankot based timber merchant.

The real estate market here, too, is not very dynamic and is, in fact, moving at a snail's pace. Prices have appreciated very slowly over the past few years and no major residential project is being developed here.

Roadblocks

"The main point affecting the growth of the realty scene in Pathankot is the ammunition depot within 1,000 meters periphery of which no construction activity is allowed. There is also no clear cut demarcation of this periphery. As the depot area has expanded over the years the periphery area has also expanded", says Arvind Puri of True Acrylic Ware. Apart from that, Pathankot also has one of the largest army cantonments and a large area of the town is with the defence establishment leaving little scope for considerable activity in the residential as well as commercial segments.

Not easy availability of land for expansion is another major reason for the sluggish growth of the realty sector here.

Good infrastructure plays a big role in inviting real estate investments. But Pathankot is neither a district, nor is it centrally located in the state and the state government has also oaid little attention to the growth and prosperity of the town. "Infrastructure in the town is not up to the mark. Roads are in a dilapidated state and in the absence of Municipal Corporation hardly any attention has been given to improve infrastructure of the city", says Anil Kumar, a real estate consultant. "I was born and brought up in Pathankot and at time I feel I am living in some backward area of Punjab", remarks Shandil.

Another major factor hampering the growth of Pathankot is the lack of Industry. "We havetwo towns - Kathua, which is 20 km from here, in J &K and Damtal, which is 30 km from here and falls in Himachal Pradesh. Now both these states give tax concessions to the manufacturing units set up in their territory. As a result whatever local industry we had once has shifted out to either of these two places. We do have a designated Industrial Area in Pathankot, but only a few units operate from there", rues Anil Kumar.

With no industry the influx of people from other cities in search of jobs is also not there, and as such the demand for housing is low. Rentals, too, are low and as a result the realty scene is pretty bleak here.

Pricing mix

"Recently there was auction of plots by the Improvement Trust and as such the response was decent", informs Arvind Puri. The auction price was around Rs 2 lakh per marla on the Saili Road. The Improvement Trust has auctioned some flats also through draw of lots where the current asking price as of now is around Rs 25 lakh.

But the main development of the city is taking place towards the Dalhousie road. DPS Pathankot as well as colleges run by the Sai Group of Institutes are coming up on this road and this is likely to generate more housing demand in the area. Some housing colonies, too, are being developed here. Land in these colonies fetches better returns as development is not haphazard here. In Adhunik Vihar on Dalhousie road the current asking price is around Rs 2 lakh plus per marla. Victoria Estate is another PUDA-approved colony which came up on the outskirts of the city. "Our first phase, which we developed on 20 acres, is completely sold out. When we sold land in the first phase the price was somewhere around Rs 2,200 per sq yd and as of now the price is around Rs 3500 per sq yd. And this is within a span of 18 months. People have made money by investing with us. Apart from well-planned housing the residents will also get good facilities here. We already have a Cafe Coffee Day outlet in our township and Nirula's would be thrown open for public soon", said Nikunj Singla, promoter of Victoria Estate. Another colony is coming on the Sarna Kotli road towards Gurdaspur is the RB City. "The total land bank that we have is around 60 acres, but we have got licence to develop only 30 acres. We plan to develop residential sites over there with flats and plots. Tentatively the plots would be priced at around Rs 1.5 lakh per marla and flats would be anywhere between Rs 25-30 lakh for a 2 BHK apartment", reveals Raman Bhalla of RR Infrastructure, the promoters of RB City.

The main commercial area of the town is the Mission Road where all the banks and showrooms of branded goods are located. Place for rent is available at minimum Rs 70 to Rs 100 per sq ft. The main residential area is Abrol Nagar and Shastri Nagar where the rate as of now is around Rs 3 lakh per marla.

The price of agricultural land, however, is high. One acre of land on the city periphery costs around Rs 70 lakh and if one goes around 25 km from the city the land is priced at around Rs 40 lakh per acre.

Move to prevent loan frauds

The government has set up a Central Registry to prevent fraud in loan cases involving multiple lenders on the same immovable property.

“Setting up of a Central Registry will enable creation of a database which will provide information about mortgage property across the country to banks, housing finance companies and public at large”, National Housing Bank (NHB) Chairman and Managing Director R.V Verma, who has also been appointed as Registrar, said.

Any new housing loan given by banks and housing finance companies will have to be reported to the Central Registry within 30 days of origination of the mortgage, he said.

The immovable property would include housing, commercial real estate to begin with, Verma said, adding that the scope and ambit of the Registry would be enhanced in due course of time.

This Registry would also enable public to make online search of any property to ascertain whether it is charge-free or not. The information can be obtained by an individual by paying a fee of Rs 50 for a single search.

Availability of such records would prevent frauds involving multiple lending against the security if same property as well as fraudulent sale of property without disclosing security interest over such property, Verma said. A central database of security interest created over property would enthuse the secured creditors to provide credit to the productive sectors to help sustain the growth momentum of economy.

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India is set up with Government of India having 51 per cent stake while remaining 49 per cent is with the NHB and 10 banks.

The Registry has been established under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002.

Banks and housing finance companies would have to report fresh mortgage to the Registry in a prescribed format for which rules under the SARFAESI Act have been framed.

In the Budget speech for 2011-12, Finance Minister Pranab Mukherjee had announced that the Central Registry would be operationalised by March 31, 2011. — PTI

Astrology for homes
Neeta Sinha

We all have heard about individuals' horoscopes, but a house horoscope or astro architecture is a new terminology for many. For the uninitiated, it is nothing but a personalised chart of a house depending on the legal owner/inmates of that premise. Every structure has its own unique energy, so does every living person. The core of this science is how both of these energies could be brought together in harmony to reap maximum benefits. Unlike vaastu, there is no co-relation with fixed directions and no structural changes

HOROSCOPES FOR HOMES

Your house could decide your fortune. Well, if you want to sit back and relax because your home has been designed as per Vaastu Shastra or Feng Shui principles, let me inform you that they offer general remedies. Vaastu Shastra and Feng Shui have a much generalised approach, it may work for some and may not work for others. For example, in an 18-storey building, all the flats facing the same direction, having exactly the same structure, as per Vaastu or Feng Shui should give the same result to each and every family staying there. But we all know that it is not the case. Every storey is different. That means there has to be a more personalised approach. This fact led to research in this field. After conducting research in 30,000 homes, offices and other premises, it became clear that not only people but their living spaces also had assigned horoscopes. Hence the concept of Astro Architecture i.e astrology of architecture was born.

The horoscope of the house serves the purpose of determining what will happen in the inhabitant's life.

Every premise has 12 sectors or spaces having its own unique characteristics. Out of these three sectors have negative attributes and nine sectors have positive.

Three negative sectors

• loans, litigations and sickness
• sudden problems like accidents, loses and delays
• difference of opinion, over expense and struggle.

Nine positive sectors

• name & fame;
• family & finance;
• contacts & siblings;
• mother & assets;
• children & new ventures;
• partner;
• spiritual uplifting & long journey;
• business income
• fulfillment of desire.

Depending on the chart of a particular structural space the appropriate placement of any one of the following five elements is suggested.

Dropping money plant

It's one of the simplest ways to get rid of the negative energies. Plants breathe and hence take away the negative energy in the house when placed in the right area. The plant should be dropping or flowing from the pot rather than winding from grills.

Red

This colour signifies energy, blood and a powerful internal force hence it is considered to be one of the most dangerous, aggressive and yet effective colours to bring cosmic balance in your immediate environment. Misuse of this colour can have adverse side effects but its judicious use can bring good luck.

Mirrors

Mirrors work equally well in eradicating the negative energy in one's environment. Though it is popularly believed that one should not see his/her own reflection in the mirror while sleeping, there is no truth behind this myth.

Wind chimes

The sound vibrations of wind chimes signify, astronomically, the cleansing of one's dwelling/homestead. Naturally, wind chimes are best placed near the window as they should be ringing constantly. Earlier, women used to wear payal, hang keys on their waist and ring bells in the house to help eliminate the negative energy.

Water body

A fish tank or a fountain signifies the washing away of negative energy. Any water feature should always have flowing water, as stagnant water invites negative energy

The writer is a renowned Astro Architect

EYE-CATCHERS
Vertical treat
Sharmila Chand

The ‘Living Wall’ at ‘The Cubbon Pavilion’ covers an entire section and has around 25,000 plants. It reaches up to the 12th floor in an atrium effect to a height of 30 metres, with a sky light at the top

The idea of creating ‘Vertical Tropical Gardens’ in the huge lobby of a hotel might appear to be daunting task, but that is just what ITC Royal Gardenia at Bengaluru is proud to achieve. It is, indeed, among the first hotels in India to flirt with the concept of ‘Vertical Gardens’.

Calming, fresh and inviting. Inspired by every natural element, the architect transforms the public space of the hotel into the super stylish retreat.

Located in the hotel’s main lobby and a ‘Green Living Wall’ at  ‘The Cubbon Pavilion’ – the  multi-cuisine coffee shop, these are gardens created on a vertical format, mounted on a steel structure, drip irrigated and rise up to the ceiling.    

Drip irrigation allows the water to drip evenly and provides moisture to every plant along the entire length of the garden. The water collects at the base and is recycled for use. Lighting is provided from natural sources or through an energy-efficient lighting system. Plants are also graded according to the lighting they require to flourish. Most of the plants being used are of the Philodendron family and have all been locally grown in Bengaluru.  

The 292-room hotel has been designed by renowned architect, Rajinder Kumar. The exterior uses Gwalior sandstone and Malaysian red bricks, interspersed by panels of specially treated smoked oak and highlighted with strips of copper in a matt copper-sulphate patina. The coppersulphate material has also been utilised for the roof, while the flooring of the entire hotel is blonde Italian marble.

According to Chief Executive, ITC Hotels Division, Nakul Anand, “The ITC Royal Gardenia exemplifies ITC’s vision and is perhaps the perfect example of finding common rhythm between man-made and natural environment. The challenge was to see how luxury and responsibility could be in harmony together. Thus a series of sustainable measures and practices were embraced to ensure that elements of nature were effectively harnessed at every level inside the luxury hotel”.

The writer is a Delhi based freelance writer

Rentals up in Delhi-NCR

A study by real estate portal 99acres.com has shown 10 to 15 per cent appreciation in rentals in Delhi and NCR region in the first quarter of 2011 as compared to the corresponding time period last year. Commenting on the same Vineet Singh, Business Head, 99acres.com said "As far as rental trends for 2011 are concerned, the market will continue to see an upward movement. The Indian economy is growing at a fast pace and hiring activity is picking up and people are relocating or moving to better homes, which in turn will effect the rental values of properties. Also, the state of real estate is not in trend with the moving economy because availability of fresh inventory is less in the Delhi region, thus resulting in annual escalation of rental values".

A look at the rental prices of a 3BHK house in key localities of South Delhi and Dwarka show that the residential areas of Greater Kailash and Saket witnessed the maximum appreciation. Both these areas have witnessed 14 per cent rise in rentals in Q1-11 over Q1-10. Safdarjung, Malviya Nagar and Vasant Kunj witnessed 12 per cent, 13 per cent and eight per cent rise in rental values, respectively, over the same time period.

Dwarka has witnessed massive real estate development in the last decade and has successfully proved itself to be an ideal place to live in. Its proximity to Gurgaon and the commissioning of the metro line has resulted in a large influx of people move to Dwarka. The rentals in the Dwarka region have appreciated by 6 per cent over a period of one year with Sector 6 and Sector 11 witnessing an 11per cent and 8per cent rise in rentals in Q1-11 over Q1-10.

The NCR region (Gurgaon, Ghaziabad and Noida) has seen an appreciation of rental values across localities. Key localities of Noida like Sector 62, Sector 93, and Sector 50 have seen rentals escalating within the range of 10 to 16 per cent over a period of one year.

Prime areas of Gurgaon like Nirvana Country, Sector 56 and Sohna Road have seen 22 per cent, 16 per cent and 11 per cent rise, respectively in their rentals in Q1-11 as compared to Q1-10. The Vaishali region in Ghaziabad has seen maximum appreciation in rental values with 21 per cent rise over a period of one year.

Ground Realty
Wood under your feet
Jagvir Goyal

LIVEN UP WITH WOOD: For residential units laminates are the best choice as these can be cleaned and replaced easily

Last five years have seen an increased use of laminated tile wooden flooring in residential units. Almost every new house builder chooses to provide wooden flooring in bedrooms or living room of his house. All newly furnished offices now make wooden flooring as their final choice while vitrified tiles, once lapped up by the non-residential sector in a big way, are getting restricted to shops, showrooms and commercial sector only.

All wooden tile floorings available in the market look the same. However, there are certain points which must be kept in mind while buying and fixing wooden tile flooring. Here are a few tips:

Choose laminates

Wood is used for flooring in many ways. For residential units laminates are the best choice. These can be provided easily, cleaned easily and replaced easily. Moreover, lamination saves them from stains, scratches and dust accumulation. If of right quality and make these are durable and moisture resistant too.

Look for grade

Basically, there are three grades of wooden laminate tiles. These are AC3, AC4 and AC5. Among these, AC5 grade laminates are the best and the strongest. However, these are costlier and suitable for commercial use where inflow of people is high. Though AC3 is termed as residential grade, prefer to choose AC4 grade laminates for your house. Laminates of this grade are suitable for offices also. Some manufacturers have developed their own grades like AC3+, AC4+ and AC5+. Treat these as equivalent to AC3, AC4 and AC5 grades only and don't pay more for these.

Choices

Wooden laminates made in Germany are of the best quality. Most of the reputed companies are supplying 'Made in Germany' laminates only. However, the moment a new material arrives in India, similarly looking Chinese duplicates also arrive. Having a similar look but poorer in quality, these wooden laminates don't carry the 'Made in Germany' stamp but have substituted it with 'Made as in Germany'. So take care and examine the manufacturer's stamp carefully.

Look for laminates that are scratch and stain resistant. Buy a new lot that has not acquired any scratches during transportation or delivery. Laminates should conform to European standard EN 13329-32. These laminates are tested for fire resistance, against abrasion, swelling on moisture absorption if any and against fading with time.

Dimensions

Wooden laminates are available in sizes of 47.75 to 51 inch length and 5.6 to 7.6 inch width. To be precise, the sizes can be measured as 1213 mm to 1292 mm in length and 143 mm to 193 mm in width. Thicker laminates have lesser dimensions. In traders' language, these laminates are stated to be of 4 feet x 8 inch size.

Thickness

Thickness of wooden laminates varies from 8 mm to 12 mm. The cost of laminates increases with the increase in thickness. For residential use, even 8 mm thick laminates are suitable.

Supplies

Wooden laminates are available in box packing. Each box containing eight laminates. Boxes are further contained in pallets, each pallet containing 40 to 70 boxes. One should carefully work out the required quantity. Buying a few extra laminate tiles to use them in case of some wastage at site or for replacement of a damaged tile in future will not be out of place. It often happens that exactly the same shade as used by a house owner earlier, is not available in the market at a later stage. In such cases, the new tiles having even a little different shade, if provided, can be easily noticed and look out of place.

Shades

With so many laminate supplying companies now in the market, users have a wide choice of shades or finish available. The shades include teak, oak, oak white, tiger wood, wenge, walnut, beech, cherry, pine, maple, birch, mahogany look and so on. It is an individual's choice whether to buy a light shade or dark shade. Dark shades, however, look better and graceful. Dirt doesn't shine on them. However, if the size of the room is small, light shades can be chosen to give the room a spacious look. Further, a buyer can choose laminates showing wood grains predominantly or subtly. Brushed wood effects or pore effects can also be chosen. The choice can also be for glossy, mat or textured finish.

Cost

AC4 grade wooden laminates are available in the market at Rs 85 to Rs 120 per sq. ft. This cost includes their fixing at site also. As it is a sort of specialised job, it should be assigned to the supplier of the laminates who sends his skilled men to fix these in a proper manner. AC3 laminates are available for Rs 55 to Rs 80 per sq. ft. The top range, AC5 grade laminates cost Rs 150 to Rs 230 per sq. ft. A good quality AC4 wooden laminate flooring can be got for about Rs 110 per sq. ft. One should negotiate the price as discounts are often available in a competitive market. However, the quality should first be ensured and shouldn't be compromised to save cost.

Composition

Wooden laminates are not in single piece but are three-layered structures having a high density fibre (HDF) board as their core material. The core is covered with highly resistant solid wooden covering required on the top and another wooden layer at the bottom, called 'Balancer'. It should be checked from the supplier that the core is in HDF and not in MDF.

Fixing

The laminate supplier should ensure that the wooden flooring finally created doesn't produce sound when people walk over it. High pressure laminates have sound reduction feature and suppress noise. An underlay is provided on the cement floor below the laminates to reduce sound effects and to provide a sort of cushion to the laminates. It is always better to check the base floor. It should be perfectly in level to get flawless locking of laminate joints that need no glue and get locked with a click.

Skirting

Rooms provided with wooden laminates should have 4 inch high matching skirting also on the walls. Laminates can be suitably cut to size to provide this skirting.

Mouldings

Mouldings are provided on the laminates adjacent to the room walls to save them from damage. These are called quarter round mouldings. Then, there are reducer mouldings for transition from laminate flooring to tile or marble flooring and T-mouldings to cover small gap between the laminates that may occur in the floor at the door connecting two rooms. Some suppliers provide mouldings that can be used for any of these applications.

This column appears fortnightly

tax tips
S. C. Vasudeva

Self lease amount in tax return

Q. I am an employee of a Central Public Sector Undertaking. I live in my own house. However, the company pays me some amount towards self-lease which is equal to the amount received by my colleagues who are living in rented accomodations.

I am in a dilemma whether to consider the amount of self-lease once 'or' twice in my income tax statement. In my opinion, since I am receiving the amount personally, it should be considered as direct income in my case. My colleagues are not receiving the amount in person, therefore, it is indirect income and it should be reflected as a benefit in their income tax statements. There is no need for similar inclusion in my case.

In order to illustrate the manner in which the return was filled up by me, please allow me to use this example. Ajay and Vijay are two Deputy General Managers (DGMs) of a Central Public Sector Undertaking (PSU). Ajay lives in his own house. Vijay in Accommodation rented in the house of Amar Singh.

The PSU pays lease amount for both the accommodations. It pays Rs 6,500 to Ajay, being the owner of the house. It pays Rs 6,500 to Amar Singh towards the rent of the accommodation.

Now the sum paid to Ajay will automatically get reflected in his Return or Income Tax Statement, because, he will not submit two returns or statements, one as the house owner and the other as tenant. His will be a single Return or statement.

Going by normal procedures, Vijay should not take the sum in his statement or Return because the sum has not been directly paid to him; however, the PSU has paid the sum to Amar Singh on his behalf, on the basis of a Lease Agreement between Vijay and Amar Singh. Alternatively, the PSU could have paid the sum directly to Vijay who could have passed it to Amar Singh. The PSU chose to pay it directly to Amar Singh. The sum must be reflected in the income of Vijay. He is the beneficiary. His rent is paid by the PSU, but on his behalf. As such the sum should be added to his income also. Two Returns or statement will be filled up in this case. Vijay will show the sum only once in his Return or statement. Amar Singh will also consider the sum in his Return or statement only once.

In case of Ajay the Income is direct so he includes it in his Return or statement. In case of Vijay the income is indirect, therefore, it has to be included as a deemed income in his Return or statement. Where the income is direct, the concept of deemed income loses relevance.

It is not correct to include the Income twice in the case of Ajay once as Income from an Indirect Perk. The income is direct and not indirect.

Counting the income twice creates inconsistencies. These are:

1. A rupee earned by Ajay from lease amount is taxed twice, which is not correct. He has earned one Rupee. It has been taxed once. The same Rupee cannot be taxed again.

2. The PSU has paid two packets of Rs. 6,500/- directly to Ajay, and, indirectly to Vijay. However, income tax is being charged on three packets. If the PSU had retained the lease amount as its own income, it would have paid tax on Rs 13,000 By giving the sum as a lease amount, it has contributed to national income because the taxable income has swollen to Rs 19, 500.

3. The PSU treats the two DGMs at par as far as accommodation is concerned, after tax deduction; a disparity is created between the two. Vijay is left with Rs 4,550, while Ajay is left with Rs 2,600 only However, if both were claiming House Rent instead of lease amount, they would have continued to be at per.

4. Parameters or specifications of the house considered fit for DGMs is same in case of Ajay and Vijay. For a house of lower specification, the lease amount will also be lower. A committee decides worth of the house after inspection and fixes the lease amount. Basically the PSU is paying lease amount to Ajay because he has spent the same amount on his house as Amar Singh. The lease amount is not a free gift. So his return on his investment is dramatically slashed after tax.

5. For purposes of income, Ajay is being considered two different persons - a tenant and a house owner. However, for the purpose of Return or statement he is being considered a single individual. If he is two person in case of income. He should also be considered two persons for filing of Return or statement. It is a big contradiction.

The department is not clear on the issue and has included the amount once as direct income and the second as a indirect income in my income tax statement. Kindly tell whether my contention or that of the department is correct.

— Anil K. Dutta

A. I have gone through the contents of your query. It seems the issue with regard to self-lease has not been correctly understood. I would try to explain the issues raised by you in the undermentioned paragraphs:

a) The amount of Rs 6,500/- per month paid to Ajay towards the rental of his own house by the company would in effect mean that Ajay has been paid a remuneration to the extent of Rs 6,500 per month and the exemption under Section 10 (13A) of the Income-Tax Act, 1961 (The Act) read with rule 2B of Income-tax Rules 1962 would not be allowable as Ajay does not satisy the conditions laid down therein. The amount of Rs 6,500 p.m. would be added to his income. Since he is living in his own house, the income from his house property would be taken as nil. There would thus be no double addition to his income.

b) The amount of Rs 6,500 paid to Amar Singh on behalf of Vijay would be reflected by Amar Singh as his income from property. Vijay would be entitled to claim the exemption in respect of house rent allowance to the extent permissible under the aforesaid provisions of the Act. In this case also there would not be any double addition to the income of Vijay.

Share in joint property

Q. I and a friend of mine had purchased a piece of land and then we carried out construction work on it. This property is in our joint name. Unfortunately, my friend expired about nine months back. Recently I visited the family of my deceased friend to inform that I wish to sell the joint property to get my share. I was told by the family that they had emotional attachment with the property and don't want to sell it or transfer the title to someone in the family. They have also refused to give me half of the price of that property. Please guide me what should I do in the present circumstances.

— Narinder Sharma

A. The facts given in the query are not complete. You have not stated the nature of the property whether it was a commercial property or a residential house. You have also not clarified as to whether such property is freehold and that there are no restrictions with regard to the divisibility of the property. Therefore, in case the property is freehold and there are no restrictions as to its divisibility thereof, you should be able to sell your share in the property without there being a necessity of seeking approval from your friend's family.

Max limit for Wealth Tax

Q. I am really grateful to you for advising me on the query raised by me about the eligibility for payment of Wealth Tax (March 19, 2011). While sending you the query regarding eligibility for payment of Wealth Tax, I did not clarify the following details:

The piece of land (residential plot), in fact, was purchased by my son initially but simultaneously, this had been transferred in my name as he had to go to USA for a period of three years. He has not returned to India so far. As a matter of convenience the plot had been transferred in my name. Thus, the title of the property stands in my name even though the amount paid for purchase of plot was out of the income earned by my son only. The conveyance deed of the plot has not been executed either in my or in my son's name. My son intends to execute the conveyance deed in my favour only as he is likely to return to India sometime in 2013 only. Another residential house for which an amount of Rs 7 lakh had been deposited with the builder is a direct booking in my name. The entire cost of the house will be borne in an equal ratio out of the income earned by me and my wife. In the fitness of things, on the one hand the title for both the properties will be in my name, but the source of income for acquisition of the properties will be from three different persons. So far as I am aware, that as per the Income Tax Act, the person who had really invested the amount for acquisition of immovable property is liable to pay the capital gain (short/long term) as the case may be. It is however, not clear as to whether the same rule applies for the payment of Wealth Tax. Kindly advise as to whether in this case, the maximum limit for payment of Wealth Tax will be bifurcated in between three persons and or the Wealth Tax liability will be limited to the person owning the property exceeding the prescribed limit. Alternatively, can we transfer the second property in favour of some other person who does not own any other wealth (property) in order to save the Wealth Tax? Is it admissible? Kindly advise in the light of the Income Tax Act highlighting the income tax liability if the property is sold in future.

— Vishnu Pathak

A. Your queries are replied hereunder:

a) The amount paid by your son for the purchase of plot/land in your name would be treated as gift to you by him. You would, thus, be treated as owner of the plot. In case the plot is of more than 500 sq. m area and its market value exceeds Rs 30 lakh, Wealth Tax would be payable by you.

b) The residential house purchased by you and your wife should be registered in the name of both of you. In such a case, each one of you will be able to avail the exemption in respect of one house permissible under the provisions of the Wealth-Tax Act, 1957.

c) Each one of you will be entitled to claim the benefit of maximum limit specified in the Wealth-Tax Act, 1957.

d) You would be liable to pay Wealth Tax in case the plot is covered within the provisions of Wealth-Tax Act, 1957. You would be liable to pay income-tax on the profit arising on the sale of the plot. As indicated (c) above, Wealth Tax would be leviable on the share of each of the co-owners in case the house property is chargeable to Wealth Tax.

Consider time limit

Q. I bought a residential property on September 3, 2009 for Rs 50 lakh (excluding stamp duty). I sold another house, for which sale agreement was completed in April, 2010 but house registry was done on September 30, 2010 for Rs 113 lakh (inclusive of stamp duty).

This house was bought in 2000 for Rs 15 lakh (on power of attorney but the Conveyance Deed was executed in September, 2009 in the name of the original allottee). Dealer's commission is not included in the above mentioned figures. Can you advise me about the capital gains tax liability? These transactions were carried out in Chandigarh.

— Sandeep Gupta

A. Section 54 of the Act, 1961 provides that in case of an individual assessee, the capital gain arising from the transfer of a residential house would not be taxable provided such an assessee has, within a period of one year before or two years after the date on which the sale took place, purchased a residential house. Therefore, in case the date of purchase of a residential house i.e. September 3, 2009 is within one year before the date of sale of the residential house, you would be entitled to claim the exemption from taxability of the capital gain so arising to the extent of the cost of the new house. The purchase of a house shall be deemed to have been completed if possession of the house was handed over to you before the date of the execution of the sale deed. In case you had taken the possession of the house within one year before the date of sale, you would be covered under the provisions of Section 54 of the Act. Needless to say that there must be a documentary evidence to prove this aspect. The balance amount of capital gain, if any, would be taxable unless you invest such balance amount in the acquisition of tax-saving bonds. It may be added that such bonds can be purchased within six months of the date of the sale of a capital asset.

Rebate on loan for renovation

Q. I am a government employee. I have recently taken a loan worth Rs 70,000 to repair my house. Kindly advise whether I am eligible to claim some rebate or deduction on the monthly instalments and interest being paid by me.

— M.R. Sharma

A. You are entitled to claim a deduction from income from house property in respect of interest paid/payable on the loan to the extent of Rs 30,000 only. As to the deduction of repayment towards the principal amount, the same is not permissible under Section 80C of the Income Tax Act, 1961.