REAL ESTATE
 


Mullanpur's golden ticket
That property rates in Chandigarh and its satellite towns have scaled a peak where a common man can just be lost in counting zeroes in the figures quoted is no new fact. In fact, with the price of land being roughly Rs 1.5 lakh per sq yd or even more, the realty market in the tricity areas seems to be lodged securely and smugly in its ivory tower where only a few can enter.

Repo Rate
Developers all over the country have termed the RBI hike in key policy rates as detrimental to the real estate sector, which is already battling rising costs and sluggish sales.

TAX TIPS 
Take professional help to file return
Purchase in time
Converting property to save tax
Deduction under Section 80C

Romancing the Heliconia
Some time back when Aishwarya Rai tied the knot with Abhishek Bachchan those curious about the wedding details were surprised to know that the most ‘beautiful woman in the world’ loved heliconia flowers and about 1,000 sticks were especially brought from Kerala for the D-day. Aishwarya's choice, though unique, is not that rare in our region too. However, very little is known about this plant.

REALTY GUIDE
Sinking Fund
Justified demand






 

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Mullanpur's golden ticket
Pradeep Sharma &
Rajmeet Singh

That property rates in Chandigarh and its satellite towns have scaled a peak where a common man can just be lost in counting zeroes in the figures quoted is no new fact. In fact, with the price of land being roughly Rs 1.5 lakh per sq yd or even more, the realty market in the tricity areas seems to be lodged securely and smugly in its ivory tower where only a few can enter. So it is the periphery where all the real action is at present and one area that is humming with activity is Mullanpur in the northern sector.

The sleepy hamlet of yore has become the hot favorite of major developers as well as of investors. Not long ago big fish of India's realty sea, DLF Group and Omaxe, jumped into the golden 'waters' of Mullanpur with their ambitious projects Hyde Park and Omaxe City, respectively. With the promise of world class integrated townships fully equipped with plotted and high-rise residential zones, shopping arcades, commercial hubs, clubs, parks, play areas etc, these have been projected as new-age avatars of Chandigarh. Buoyed by the heartening response to their project Mohit Gujral, Vice-Chairman, DLF Limited, says, "Mullanpur has caught the fancy of the people because it promises, for the first time in the region after Chandigarh, to provide world class infrastructure under a Master Plan.”

 

New offer

The locational advantage and buyer enthusiasm led to price appreciation with the private builders jacking up the rates considerably in the past 12 months or so making several fear that Mullanpur, too, would go the Chandigarh way and become out-of-reach for midlle class investors and end users. However, Punjab Government-controlled urban development giant, Greater Mohali Area Development Authority (GMADA), which is the latest party to join the march to Mullanpur with the launch of its ambitious urban estate project earlier this week, seems to hold hope for the common folk. Those missing out on plots in GMADA's Aerocity project need not lose heart as Mullanpur urban estate can be their golden ticket to have an abode near City Beautiful. Nestled in the foothills of the Shivalik Hills, the urban estate would offer over 2,000 plots of different dimensions between 125 sq yd (5 marla) and 500 sq yd (1 kanal) suiting every requirement and pocket. And keeping up with its character of being Punjab's first eco-township, the urban estate would be a low-density development with around 1,000 persons per acre.

Worth a wait

Recently, the Punjab and Haryana High Court had dismissed a petition by owners of about 140 acres of land of the total 447.34 acres being acquired for the project paving the way for the launch of the housing scheme. "We are waiting for a copy of the high court judgement following which modalities for the launch of the housing scheme would be worked out," Manjit Brar, GMADA Additional Chief Administrator, Mohali, said.

Meanwhile, realty experts feel that given its advantageous location, the Mullanpur urban estate would give the townships floated by realty giants such as DLF and Omaxe a run for their money. "While Omaxe, whose site is around three km away from the Chandigarh-Baddi road, had launched its project at Rs 18,000 per sq yd, the DLF had launched the residential project at around Rs 26,000 per sq yd a couple of months back. The sites of both the DLF and Omaxe fair poorly as far as its location is concerned when compared to the GMADA site", says Kamaljit Singh Panchhi, acting president, Property Consultants' Association, Chandigarh.

Now all eyes are set on the urban estate project, and particularly on its pricing structure, which would be keenly watched by realty observers, investors and end users.

Cost factor

"Given its locational advantage, the Mullanpur urban estate is the prime residential property in Chandigarh's periphery. In fact, the government-floated residential projects, which are also reasonably priced, are always lapped up by the investors and end users," Taran Inder Singh of Manohar Singh and Company, a real estate advisory firm, informed.

While GMADA officials are keeping pricing cards close to their chest, speculation is rife that the pricing would be somewhere between the pricing structure announced by the DLF (Rs 26,000 per sq yd) and Omaxe (Rs 18,000 per sq yd). Sources said the price could be in the range of Rs 16,000 to Rs 20,000 per sq yd.

“Since I have already missed the bus in the tricity area, the urban estate seems to be the last opportunity to own a property in a developed township in Chandigarh's periphery," Ankur Bajaj, a government servant, asserted.

Attractive OFFER

To make the land-pooling scheme attractive for farmers whose land is acquired for different development projects in Mohali, the state government has decided to offer bigger commercial sites to the evacuees. There will, however, be no change in the size of residential plots (930 sq yd) offered to the landowners under the land-pooling policy. Now it has been proposed that the size of the commercial site (around 70 sq yd, excluding the parking) offered to the landowners will be extended to 100 sq yard. During the acquisition of land for the Aerocity project, about 15 per cent of the landowners had opted for land-pooling and the remaining 85 per cent had to be paid the land compensation of around Rs 980 crore - indicating that the farmers were not too enthusiastic about the scheme. 

Apply Online

Using IT for applicants' benefit for the first time, GMADA will allow applicants to apply online for the Mullanpur urban estate. On the basis of computer-generated application form, the applicants would be able to deposit the earnest money with banks. All those who have got plots in Sectors 76 to 80 and in Aerocity would be barred from applying for the Mullanpur urban estate, GMADA officials added. 

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Repo Rate SHOck

Developers all over the country have termed the RBI hike in key policy rates as detrimental to the real estate sector, which is already battling rising costs and sluggish sales.

The recent hike will be mirrored by an increase in lending rates for new and existing home loan borrowers. Home buyers will be forced to re-evaluate their plans since they will get 25 per cent lower loan amounts as compared to those a year ago owing to the rising interest rates.

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India, said, “The RBI's hiking of the repo rate by 25 basis points is far from good news for the real estate sector, especially in terms of housing. Purchasing activity had already dropped visibly during the last tranche of interest rate hikes, and we will see a further drop in buyer interest now”.

"This time the hike in lending rates could pinch home loan borrowers as they generally have fixed income", said V.A. Ghai, former assistant General Manager of the State Bank group.

If proper reforms are not brought in the housing sector and SEZ policy commitments are not kept, then it would lead to a major economic disaster and chaotic urbanisation.

“As for developers coming down on their prices to counter the negative effects of this hike, a lot depends on the financial ability of individual developers to hold on to their current pricing and risk losing sales till the situation improves. Developers with enough capital bases are less likely to relent on their pricing than smaller developers with an urgent need to sell their stock”, adds Puri.

The industry is reeling under the double whammy of higher input costs and sluggish sales. The real estate industry carries huge debt service obligations and sees very challenging times ahead. While inflation is not quite tamed the economic growth is definitely coming under pressure with the higher rates. — S.C. Dhar

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TAX TIPS 
Take professional help to file return
S. C. Vasudeva

Q. We, three co-sharers, had bought 12 kanal 8 marla "Banjar Kadim" agricultural land on December 17, 1993 for Rs 1 lakh. We all have equal share in the land holding. We bore the stamp duty expenses of Rs 12,500 on its purchase at the time of registration. We sold the land on March 9,.2011 for Rs 23 lakh in the same manner i.e. equal shares in each respect. At the time of sale the land was no more "Banjar Kadim". Its girdawri shows that trees were growing there. The land falls within the municipal limits of a town with a population of more than 20,000. Its market and transaction value has been shown as Rs 31 lakh @ Rs 20 lakh per acre. The buyers paid Rs 2,48,000 as stamp duty @ 8% for registration. I request you to enlighten me on:

l How much LTCG come to my 1/3rd share?

l How much should I invest/deposit in the capital gains deposit account with the scheduled bank in case I go to buy agriculture land within two years of the sale date?

l What and against which column of ITR-2 Form should I make an entry in this respect? I usually use this form as I am a government pensioner and have income through pension, bank/PO interest, agricultural income and LIC commission.

l Can I do without any professional help from any CA/IT lawyer for this year also as each year I manage to fill in and file my return of my own without any outside help?

— Amrit Lal

A. Your queries are replied hereunder:

l The indexed cost of agricultural land would work out at Rs 3,27,818 (1,12,500 X 711 )

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The taxable amount of capital gain would be 1/3rd of Rs 27,72,182 (Rs 31,00,000-3,27,818) = 9,24,061. I presume that the transaction value of Rs 31,00,000 referred by you in the query represents the assessable value for stamp duty purposes. This amount of Rs 31,00,000 will be substituted for computing the taxable amount of capital gain in accordance with the provisions of Section 50C of the Income-tax Act, 1961 (The Act).

l You will be liable to pay tax at the rate of 20% of Rs 9,24,031 plus education cess of 3% on the amount of tax so computed.

l The agricultural land purchased by you was "Banjar" agricultural land as per the facts given in the query and therefore the same was not being used by you or your parents for agricultural purposes in the immediately preceding two years of the date of sale. The exemption under Section 54B would not be available to you in view of the non-compliance with the above requirement.

l The particulars about capital gain will have to be filled in schedule CG-Capital gain-column B relating to long-term capital gain.

l It is always advisable to take professional help for filing the tax return.

Purchase in time

Q. I sold certain equity shares and have earned a long-term capital gain of Rs 4 lakh thereon. This was an off-market transaction on which STT has not been paid. Can I claim the exemption under Section 54F of the Act? I may add that I own a residential flat in Mohali and now I intend to purchase another flat at Gurgaon by utilising the above amount of capital gain.

— Balbir

A. There should not be any difficulty in claiming exemption under the provisions of Section 54F of the Income-Tax Act, 1961(The Act) provided that the net consideration accruing on the sale of shares is utilised for the purchase or construction of a residential house. The purchase will have to be affected within two years after the sale of the shares. Further, in case purchase is not affected before the due date of filing of the return, the unutilized amount of net consideration, if any, is required to be deposited in a bank account under the capital gain scheme before the said date. The amount so deposited can be utilised for the purchase of a residential flat within the specified period. The exemption from taxability of Rs 40 lakh would be available only if you comply with the above requirements. 

Converting property to save tax

Q. I want to sell my ancestral agricultural land in village and deposit the amount in a bank. Kindly intimate if the interest on this deposit will be exempt from income tax just like agriculture income. Someone advised me that if the amount is deposited in the account of HUF then it will not be taxable and if the amount is deposited in an individual account, then its interest shall be taxable.

— J.S.

A. The amount of interest received on bank deposit would be taxable. In case the agricultural land was held by you as individual property, its conversion into an HUF property would not enable you to save tax as the same would continue to be treated as your property for the purposes of taxability. You can invest the amount in tax-free bonds if the same are available in the market. You can also invest the amount in the units of an equity-oriented mutual fund as the dividend received on such units is tax free.

Deduction under Section 80C

Q. I am a salaried employee. I have taken loan from a nationalised bank jointly with my wife and constructed our house. The house is in the joint names of my spouse and me. We are making the repayment of the loan. The EMIs include principle and interest. We have let out the house and are earning rental income also.

l As per rules interest paid is allowable u/s of the IT Act, please guide me as to whether the repayment of principle amount included in the instalments, is allowable under Section 80C in case of let out property also? If not, then please guide me under which clause/sub-clause of Section 80C it is not allowable.

l My wife has made a part lump sum re-payment of loan out of her salary. Whether she can claim deduction of the entire sum paid, under Section 80C or she is entitled to 50% of the said amount being half share in the property/property income in case the reply to (a) above is affirmative.

l I have received maturity amount of NSC which includes interest also. Whether the maturity amount is taxable in the year of receipt?

— Rajneesh

A. Your queries are replied hereunder:

l You and your wife will be entitled to claim deduction in respect of repayment of the principal amount of loan borrowed for the purpose of construction of a residential house, under Section 80C of the Act within the specified limit of Rs 1,00,000.

l She can claim the deduction in respect of the amount repaid towards the loan amount to the extent of her share in the loan raised from the bank.

l The amount of interest received on National Saving certificates is taxable. The amount of interest received at the time of maturity would be taxable in case the same has not been tendered for taxation on accrual basis in the earlier years. 

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Romancing the Heliconia

Some time back when Aishwarya Rai tied the knot with Abhishek Bachchan those curious about the wedding details were surprised to know that the most ‘beautiful woman in the world’ loved heliconia flowers and about 1,000 sticks were especially brought from Kerala for the D-day. Aishwarya's choice, though unique, is not that rare in our region too. However, very little is known about this plant.

Before I talk about the detail of this exotic flower, I would like to ask you one question. Have you ever grown Canna plant, a banana or a bird of paradise? If so, then you can grow heliconia too. Canna as you know may even grow wild and is not at all fussy about soil and weather. So is heliconia. It also never resents drought conditions for a while. Once planted, it keeps on multiplying underground and blooms profusely.

Heliconia grows to a height of two meters or even more. Separate location should be given to the plant in the home garden as it starts making a clump as the rhizomes run underground. The leaves resemble haldi and canna leaves. The first flowering starts after about nine months of planting as the plant matures. There is a wide range of varieties of heliconia that one can choose from. What you see in the accompanying picture is the Heliconia pendula. True to its name, the waxy spike hangs down and remains on the plant for about 20 to 25 days. The flowering units are like parrot beak and with a contrasting colour mix of red and yellow. The actual flower is very small and what you see are the bracts. The vase life of the bloom is also about 15 days.

If you want to multiply the locations, then remove a clump from the soil and plant it independently. You can plant it in a semi-shade location. When planted in open, the plant may dry up in winters to resprout with the onset of spring.

Once you have planted a heliconia you can rest assured to have the shining little guests - the hummingbirds - that draw nectar from the blooms. And if you are caring, harmless and lucky, you may also have the pleasure of seeing a little nest of this bird in the vicinity.

This column appears fortnightly. The writer is a senior horticulturist at PAU and can be reached at satishnarula@yahoo.co.in

Fortnightly alert

Monsoons are round the corner and stagnation of water is a common problem in home gardens. Home gardens usually lack effective outlet of water because these are generally enclosed with boundary wall. Drainage pipes also get choked due to flowing garbage. It is better to break the basins under trees and give a gentle outward slope so that water remains away from the main trunk. Do not, however, make mud mounds around the main trunk. As these will absorb water and keep the main stem moist all the time exposing it to diseases. Such loose mounds also act as breeding place for insects/pests.

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REALTY GUIDE
Sinking Fund
B K Sanghi

Q: I have purchased a flat in a Cooperative Housing Society. They are collecting sinking fund from me quarterly. Kindly explain me about sinking fund.

— Amit

A. Co-operative Housing Societies have a statutory obligation to collect a Sinking Fund. This is done so that in case the building needs to be repaired or reconstructed in the future, the society has sufficient funds to carry out the work. The amount to be contributed is decided by the General Body of the society; it should be at least .25 per cent per annum of the cost of each apartment, excluding the cost of the land. This fund may be used after a resolution is passed at the General Body meeting with the prior permission of the Registering Authority. The money collected is used to carry out reconstruction, repairs, structural additions or alterations to the building as and when required.

Justified demand

Q. My father was allotted a plot (10 marla) by Haryana Urban Development Authority (HUDA) in Gurgaon, Sector 38 on January 1, 2002 for Rs 14,20,850. He paid all instalments regularly. He was offered possession of the plot on November 28, 2003. Later in 2009 he applied for family transfer (to his son) of this plot because of health problems and the plot was ultimately transferred to his son on December 2, 2010. But before transfering it, he was asked by HUDA to deposit Rs 3,08,960 as the plot had preferred location(corner plot) . It is actually a corner plot and my father deposited this amount in HUDA account.

I want to know

l Since HUDA never asked my father to deposit the additional amount for this plot right from 2002 till 2010, is it right in demanding the amount after eight years?

l When was this rule for additional amount for a preferred (corner plot) plots intoduced? Is it applicable to this plot which was allotted 
in 2002?

— S. B. Singh

A. HUDA is perfectly justified in claiming the amount for the preferential allotment even after a gap of so many years because all applicants agree to abide by the rules and regulations of HUDA at the time of applying for plots. In your case, it is possible that due to certain clerical mistake, HUDA raised the demand for additional money for the preferential allotment after so many years.

l  In exercise of powers conferred by Section 54 of the Haryana Urban Development Authority Act, 1977 (Haryana Act No. 13 of 1977) and all other powers enabling it in this behalf, HUDA, with the previous approval of the Government of Haryana conveyed, vide Memo, dated May 29, 1978, made the following regulations:

l  The tentative price/premium for the disposal of land or building by the authority shall be such as may be determined by the authority taking into consideration the cost of land, estimated cost of land, estimated cost of development, cost of buildings and other direct and indirect charges, as may be determined by the authority from time to time.

l An extra 10% and 20% of the price/premium shall be payable for “preferential” and “special preferential” plots, respectively. By these provisions, the enhanced amount for the plot allotted in 2002 is valid and justified. 

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