Gurgaon’s New business address
Geetu Vaid

Glittering and bustling Gurgaon is, no doubt, the pivot of growth and trends in the realty sector in Haryana. Though the city had shed its “sleepy town” image a long time back and donned the “international city” tag, realty growth has not lost its momentum here. Saturation in the original area has led to “leapfrogging” as Haryana’s most happening city continues to expand its golden reach.

Already home to a vast number of MNCs that have swank offices here and plush residential complexes, new areas and new projects keep Gurgaon on top of the major developers’ wish list. Ideal location in the form of proximity to the national Capital and the international airport has made Gurgaon not only the commercial hub of Haryana but also the most preferred IT and ITES destination in north India. 

A number of residential colonies and Commercial Business Districts (CBDs) have maintained a steady flow of investments from domestic as well as global players. Areas around the main city are now blinking brightly on the radar of developers as well the state government as new projects are being envisaged here.

In the “Gurgaon-Manesar Urban Plan 2025” notified by the Haryana Government, Sector 74 promises to be the 'mindmine'. The first time in the new masterplan Haryana Government has provisioned that commercial licenses will not be permitted any further in residential zones. Hence, the carving of the next Commercial Business District (CBD) has been shaped into Sector 74. Having been classified as 'Industrial Corporate' with a rider for Green norms, it is being touted as an ideal locationfor the future expansion of MNCs and IT/ITeS companies. The strategically located 350-acre chunk of land has attracted investments from a number of major realty players. DLF, Ansals, Unitech and Vigneshwara are some of the groups that have invested and floated several projects to make MNCs to relocate their corporate and back offices from the congested Delhi business centres to Sector 74. DLF has about 150 acre land parcel in Sectors 74 A and 75 A.

Hot bed of innovative ideas

The CBD will have an array of projects having innovative and top-end facilities. “Most organisations now want intelligent, vibrant and unique workspaces and that will be the USP of office and commercial complexes coming up in this area”, says Manoj Parmar, a realty consultant in Gurgaon. “DLF’s Corporate Greens project here will be a benchmark for upcoming projects along NH-8. It will combine futuristic offices spaces for niche organisations with supporting retail opportunities typically aimed at the prime catchment of new age ‘office proud’ professionals”, said Devinder Singh, Senior Executive Director (Gurgaon), of the DLF group while talking about the group’s project there.

Vigneshwara Developers is another group that has launched its 11-acre project in this region. The group’s “Aquarius Park” project will provide office space and is built on the unique concept of Work-Shop- Live-Play. “It simply means a place where work environment is created keeping in mind the requirements of an individual where he can play to relax, stay to avoid going up and down, and shop to meet the day-to-day needs. This creates an environment which makes an individual feel satisfied and motivated”, says Sunil Dahiya, MD, Vigneshwara Developers. The group has also launched the concept of SOHO – Smart Office Home Office — which will have all amenities that a top executive would love to have at his disposal.

Investment wise

With the effects of global recession receding, now Indian as well as multinational companies are in expansion mode, so the demand for office space is going to increase and property prices will be appreciating further. Even from the investment point of view this area is a good option, says Anil Wadhwa, MD, Ashirwad Properties in Gurgaon. Commercial property prices in Sector 74 have already seen a 15 to 20 per cent appreciation in the past one year as against less than 10 per cent in case of flats and plots in residential segment. “Investors have played a major role in Gurgaon commercial property price appreciation. Reasons being the ROI in commercial properties, which is 12 per cent per annum, are much higher than residential properties, which is 1 per cent per annum. According to our research, commercial demand sources contribute nearly 70–75 per cent to Gurgaon’s overall lodging demand, while the remaining is a mix of leisure (5–10%) and MICE (15–20%) sources”.

Healthy market trends and builders’ hype and euphoria , however, have to be backed up by a strong infrastructural support. “How far the government succeeds in providing good road network and connectivity, parking,civic services (sewarage, drainage , water supply networks), electrical supply and back-up (since MNCs and large scale developments require a huge amount of electrical supply and 24 hours back-up) will decide the success of this new business address”, says Pradeep Misra, Founder and Director, REPL.

Building trends
Rollers to make buildings quake resistant
Deepkamal Kaur

A civil engineer from Dr BR Ambedkar National Institute of Technology has come up with a novel suggestion for the builders who are into designing earthquake-resistant structures. The idea is to construct base-isolated structures, supported by a series of bearing pads, placed between the buildings and building foundation.

Explaining the concept, course coordinator and assistant professor of the department Dr Rizwan A. Khan said, "It was simply as if a building is resting on frictionless rollers. When the ground shakes the rollers roll freely but the building above does not move. No force is transferred to the building due to the shaking of the ground and it does not experience the quake."

Dr Khan said such a concept was being used in buildings in Japan. "The building is rested on flexible pads that offer resistance against lateral movements. The forces induced by ground shaking can be reduced by four to five times as compared to the impact experienced by buildings built directly on ground as in ordinary fixed-base buildings. The flexible pads are called base-isolators and the structures protected by means of these devices are called base-isolated buildings", he explained.

The scientist had a word of advice, "Base isolation is suitable for medium-rise buildings rested on hard soil underneath. High-rise buildings or buildings rested on soft soil are not suitable for base isolation."

According to Jalandhar-based realtor and builder Amardip Samra, "The region falls in seismic zone 4 which is quite prone to quakes and such concepts have to be incorporated for the safety of people. Since the soil in the region is hard and people here prefer medium rise buildings, such buildings could be constructed here. The cost factor, however, could be some constraint".

While admitting the advantages of Khan's technique, builder Anil Chopra, who is involved in the construction of several buildings in and around Jalandhar, said that measures to soften the impact of quakes were already a part of their building plans. "We are already incorporating some quake-resistant designs in residential complexes and educational institutes which we are constructing. We are giving a 3-inch layer of rubber, steel and other material between the building and foundation. The cost factor is also not very high".

Regarding the material used in his technique Khan said, "Lead-rubber bearings are the most frequently used. A lead rubber bearing is made from layers of rubber sandwiched together with layers of steel.

In the middle, there is a lead plug. On top and bottom, the bearing is fitted with steel plates which are used to attach the bearings to the building and foundation. The bearing is very stiff and strong in the vertical direction, but flexible in the horizontal direction.

On its practical usage, the professor said, "Acceleration is decreased because the base isolation system lengthens the vibration period of a building, the time it takes for a building to rock back and forth and then back again. In general, structures with longer periods of vibration tend to reduce acceleration, while those with shorter periods tend to increase or amplify acceleration." 

Ground Realty
Elegant ceilings
Jagvir Goyal

There was a time when false ceilings were considered fit for commercial or office buildings only. But now these are increasingly being used in residential units also and have become very popular all over.

False ceiling is a sort of suspended ceiling provided inside a building below the floor slab or roof slab by leaving a suitable vertical gap between the two. Often, this gap is 9 inch to 15 inch. However, when the floor or roof level is high, the vertical gap can be more. It can be varied depending upon the height of the room and the ducts that have to be accommodated above the false ceiling.

Use and utility

Provision of false ceilings brings seven major benefits:

n These add to the interior beauty of rooms.

n During summers, it helps in insulating the house from outside heat by intercepting the transmission of heat.

n It helps in sound insulation as the ceiling material significantly absorbs the noise.

n All the ducts for air conditioning or air cooling can be hidden in the vertical space above the false ceiling and below the RCC slab.

n The lighting luminaries can be accommodated in the false ceiling and their wiring conduits can be run above the false ceiling. Thus the provision of lamp brackets or fluorescent tubes on the walls is avoided and better lighting possibilities become available. Concealed lighting system can also be provided easily in the false ceilings.

n Fire fighting provisions like smoke and heat detectors can be accommodated in the false ceilings.

n Its use becomes essential whenever wallpaper is used on the room walls as final finish. In such cases, installation of lighting brackets and tubes on the walls result in damage to wallpaper.

How is it provided?

False ceiling consists of a suspension system and a 'ceiling grid'. Once the depth of false ceiling below the RCC slab is decided and the AC conduits are laid, the metallic suspension system can be erected below the RCC slab. At the bottom of this system, a grid of fine metal sections is created to support the ceiling material. All this work can be done in a fast manner as the manufacturers produce standardized items.

Types

False ceiling can be made of mineral fibre tiles, wood tiles, metal tiles or rock wool tiles. The tiles are used when we are looking for a flat false ceiling at one level or multiple levels. Whenever some artistic look or curvature is to be given to the false ceiling, use of gypsum board or POP in it also becomes necessary. The systems for providing gypsum board ceiling and POP ceiling are different.

Preferred type: A combination of about 1 to 1 ½ feet wide gypsum board ceiling around the periphery of the room with a central, recessed, tile type false ceiling is much preferred these days. The width of gyp board ceiling and the area of tile ceiling are decided by keeping the room size in view so that the overall appearance is attractive and pleasing to the eye. For curves, circular or elliptical type ceilings, POP ceilings using wire mesh are provided.

Level

In its simplest form, the false ceiling for full area of the room may be at one, uniform level. However, a combination of multiple levels is now adopted with different types of lights and luminaries embedded in them, giving an overall strikingly beautiful appearance. In most of the cases, two levels are provided with the central portion recessed.

Tile patterns

False ceiling tiles can be smooth and plain, textured or fissured type when mineral fibre tiles are chosen. Wood tiles are in laminate form. Metal tiles can be perforated, plain or micro-perforated. Gypsum board panels are plain faced. These can be used in plain, curved or stepped ceiling designs. Any type of curves can be created in them to add an artistic look.

Suspension grid system

The suspension grid system is created by driving anchor fasteners into the RCC slab at equal intervals and then hanging vertical hangers or soffit cleats from them. A wall angle is fixed to the room walls at false ceiling level. The vertical hangers or soffit clips hold the hanger steel wires or level clips which are used to suspend the T-section ceiling grid. The steel wires used are of 12 gauge or less. Main runners and cross tees are used to create the grid for supporting the tiles.

Two types of suspension systems are used. One is click-install type and other is hook-install type. When no maintenance of the area between the false ceiling and RCC ceiling is to be done, click install system is preferred. When the area between the two ceilings may have to be approached to repair some duct or wiring, hook install system is preferred.

Tile thickness

Thickness of tiles used in false ceiling varies between 12 mm to 19 mm. More is the thickness of the tile, costlier it is. A thickness of 15 mm is fairly good for residential units while in commercial units, it can be more.

Other properties

False ceilings are designed to resist humidity. Tiles having 99% humidity resistance should be chosen. Light reflectance of tiles should be greater than 85%. Some particular types of ceilings are fire resistant. Choose tiles that have high acoustical and fire resistance properties. Wherever, there are chances of little seepage or leakage from RCC ceiling, metal tiles are preferred over mineral fibre or wood tiles in the false ceiling. Often, the ceiling tile showrooms have tile samples with range of these properties mentioned at the back of the tiles.

Selection

Ceiling tile producers display hundreds of tile finishes to choose from. While the tile finish and color can be selected by the user as per his taste and choice, it is important to choose tiles whose size and model remains available in future for replacement of any damaged tiles. Most of the companies are simply importing the tiles and selling them in the market. Such false ceilings should be avoided. One should select the tiles of a company that has its own tile manufacturing plant in India.

Cost

Cost of false ceiling varies from Rs 50 per sq. feet to Rs 450 per sq. feet. Gypsum board ceiling and certain mineral fibre tile ceilings cost lesser, around Rs 50 per square feet. Note that this cost includes not only the supply of material but its installation also. Fairly attractive and good quality false ceiling costs around Rs 100 per sq. feet. Whenever the ceiling system is purchased, a minimum 15-year warranty on it should be secured by the buyer.

Precaution

One should always ensure that the suspension system used in false ceiling is manufactured by the same company that is supplying the tiles. Duplicate and poor quality suspension systems are available in the market because these get concealed behind the false ceiling and the user never knows that a cheaper and weak system has been provided instead of the genuine one.

(This column appears fortnightly)

REALTY BYTES
Whitbread to invest Rs 535 cr

UK-based hospitality firm Whitbread will invest 75 million pounds (over Rs 535 crore) in India by 2020 to fund its hotels business in the country.

The company, which currently owns and runs two ‘Premier Inn’ hotels in India, has plans to operate over 80 properties in India in the next 10 years. “Whitbread has earmarked an investment of 75 million pounds for the next 10 years with a plan to operate over 80 properties in India,” Premier Inn India Pvt Ltd Director (Brand and Operations) Shwetank Singh told PTI. He said the company had already invested over Rs 115 crore on two owned hotel properties in Bangalore and Delhi.

“Another four properties have been finalised at Mumbai, Goa, Chennai and Pune, which are currently being developed or are in the process of being acquired,” Singh said.

These properties are likely to be operational only after 2013, he said.

The company recently announced the launch of a 143-room Premier Inn in the Capital, its second property in India after Bangalore. — PTI

NAREDCO conference

A major thrust by the banking industry to low income housing was recommended at NAREDCO conference on ‘Financing Housing and Real Estate Pojrects’ last week. For the 21 million credit worthy urban low income households the market size is Rs 6 lakh crore and in order to extend loans through bank mortgage, a new category under priority sector lending be created by RBI.

This category in the affordable price band of Rs 3 to Rs 10 lakh for a flat is highly consumer driven and does not require any government subsidy but a preferential approach by banking and housing finance institutions in India. A new product should be floated to tap this potential market.

Since cost of land is a significant component of housing projects, the banks should consider to funding land purchase at least in master plan approved areas and land purchase from development authorities subject to reasonable margin contribution by developers of low income housing projects. If this is included in the guidelines of banks, the funding scarcity faced by developers would be considerably eased which in turn shall attract investment in low income housing.

In his address Nagesh Pydah, Chairman Oriental Bank of Commerce called for higher degree of transparency in the real estate sector to improve the flow of credit. Further more delay in obtaining project related clearances and developer’s reluctance for ring-fencing of the project cash flows in favour of lenders needs to be addressed. He underlined the need for due diligence and rating of projects by credit rating agencies to minimise the risk of funding by banks and other housing finance institutions to sanction project for funding within minimum time period on merit and to check any irregularities.

tax tips
Partition of HUF property
S. C. Vasudeva

Q. I, the karta of HUF, own a house in Delhi. It is being assessed as HUF property. In the sale deed and in the municipal records it stands in my name only. The HUF consists of me, karta, my wife and my two daughters who are married. Now I want to divide the HUF property and funds amongst all members.

All four of us have agreed in writing (on a stamp paper of Rs 10) to sell the house and buy another one elsewhere by utilising the sale proceeds. The new house would accommodate all the members of the HUF. It has also been agreed that the karta, after paying all taxes, will keep an account of the balance money and divide the same amongst the members as permitted by law.

n Can I sell the house and thereafter transfer the sale proceeds in the bank account of the HUF from my individual account and thereafter buy a new house as agreed by all the members of the HUF; pay capital gains tax to the government from HUF account and partition the new house with an undertaking that the new house shall not be sold for three years and divide the balance money amongst the members of the HUF or I should wait for three years for total partition to get benefit of Section 54 of the Income Tax Act?

n How many shares can be there in HUF property - three or four i.e. (1) Me and my wife take one share each and two shares go to my daughters or (2) myself and my wife take only one share and two shares should go to my daughters.

n Can there be a total partition of HUF property on an ordinary paper or it should be done on a stamp paper? If so then what should be the value of the stamp paper? Is the partition deed required to be registered or not?

— Paras Nath Jain

A. Your queries are replied hereunder:

n You can sell the house and take the action in the manner suggested by you with regard to the sale proceeds.

n The partition of an HUF property can be effected any time as such partition is not considered to be a transfer in accordance with the provisions of Section 47(i) of the Income-Tax Act, 1961 (The Act).

n There will be four shares of the HUF property. However, it is not essential that the share of all the co-parceners be equal.

n It will be advisable to execute a "Memorandum of Partition". The recital of such memorandum would state that the partition had been agreed orally on a particular date between the various parties and the same is being reduced in writing after the date of such partition. This may involve a lesser amount of stamp duty. It would be advisable to get such memorandum registered with the Sub-Registrar.

n It has to be a total partition of the HUF as partial partition is not recognised by the tax department. You should also get an order under Section 171 of the Act in order to record the finding of partition of HUF.

Tax on selling agricultural land

Q. I am a government employee and an income tax payer. I own agricultural land in rural area, which is co-owned by my brother (who is in service) and my mother (a retired employee). We want to sell our land. Are we liable to pay any income tax on the gain arising on the sale of this land or the same is exempt from income tax? If any income tax is to be paid what will be the rate thereof?

— R.S. Kainth

A. The capital gain arising on the sale of an agricultural land is exempt from tax in case the agricultural land is situated in any area which is outside the jurisdiction of a municipality, municipal committee, municipal corporation, notified area committee, town area committee, town committee or a cantonment board and which has a population of not less than 10,000 according to the last preceding census of which the figures have been published before the first day of previous year or in any area which is beyond the notified distance from the local limits of the municipality or cantonment board etc. as the Central Government may notify in this behalf. In case the land is situated within the Municipal area or within the notified distance, capital gain arising on sale of such agricultural land would be taxable at the rate of 20 per cent plus education cess of three per cent thereon.

Buying property in Canada can be tricky

Q. Please clarify capital gains tax law for Canadian citizens. I bought a plot in Amritsar in 1986. Now if I sell it, can I buy residential real estate in Canada to avoid paying tax on it?

— Naveen Gupta

A. The provisions of the Act with regard to the sale of a capital asset in the nature of immovable property are same for a Non-Resident as are applicable to a Resident Indian. You would be entitled to get the indexation benefit. In other words the cost of plot incurred in 1986 would be indexed so as to give benefit of rise in prices due to inflation. Such indexed cost would be deductible from the sale price. The balance amount so arrived at would be taxable. An exemption can be claimed from the taxability of the capital gain provided the net consideration (sale price less expenditure incurred wholly and exclusively in connection with the sale of plot) is utilised for purchase or construction of a residential house within the specified period. The specified period for purchase is within one year before or two years after the date of sale. The specified period for construction is within three years after the date of sale. A purchase of residential house in Canada within the specified period may entail litigation. This is because in one of the decisions of the Income-Tax Appellate Tribunal it has been held that to avail such exemption, the purchase of residential house should be in India.

Non residents can't buy agri land

Q. Is a person of Indian origin who is permanent resident of Bangkok having an Indian passport and without a Thai citizenship, eligible to buy agricultural land in India? If such a person buys land due to ignorance about the relevant legal provisions, then can that mutation be cancelled?

— Lal Singh

A. The Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 provide that a person of Indian origin who is living outside India may acquire immovable property in India other than agricultural property, plantation or a farm house. In view thereof, you are not entitled to buy agricultural land in India. In case the same has been bought under a mistaken impression or on account of ignorance, the contract for sale of agricultural land can be held to be void. This may also lead to the cancellation of the mutation. It would be in your interest to consult a civil lawyer to forestall any action by the department concerned.

Price index

Q. Please guide me on the following queries: -

n What was the price index (land) during 1997?

n What is the price index in 2011?

n What is the formula to calculate the long-term capital gains and income tax thereon?

n If one plot was purchased in 1997 for Rs 1,00,000 and the same was sold in 2011 for Rs 20 lakh then what amount of income tax is to be deposited with that office?

— Ghanshyam Das

A. Your queries are replied hereunder: -

n The cost inflation index for 1997-98 was 331 and the cost inflation index for 2010-11 is 711.

n For the purpose of computing capital gain the cost of capital asset is to be multiplied with the index for the year of sale and divided by the index for the year of purchase. The amount so arrived at is to be deducted for the sale consideration for computing the amount of capital gain.

n The amount of capital gain would be Rs 17,85,196 on the basis of indexed cost of 2,14,804. The seller shall have to pay tax of Rs 3,57,039 on the said amount of capital gain plus education cess of 3% thereon.

The writer can be contacted at sc@scvasudeva.com