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Flat mart
Think Amritsar and the images of its colurful markets, narrow lanes, vibrant Punjabi culture and people flit past the mind’s eye. But this border town balances tradition and modernity perfectly as over the years trendy and swish malls, luxury hotels and a ‘metroesque’ lifestyle have also made an entry and become an important part of the ambience of this city. 
tax tips Work out income from house property
REALTY GUIDE
REAL TALK
Sanyam Dudeja, COO-Punjab, TDI Ltd.
REALTY BYTES
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Flat mart
Think Amritsar and the images of its colurful markets, narrow lanes, vibrant Punjabi culture and people flit past the mind’s eye. But this border town balances tradition and modernity perfectly as over the years trendy and swish malls, luxury hotels and a ‘metroesque’ lifestyle have also made an entry and become an important part of the ambience of this city.
While the Punjabi exuberance and affluence flows abundantly in the sprawling bungalows, villas and farmhouses, there also is a visible preference for the apartment culture here. A large number of projects offering a healthy platter of flats and apartments bear testimony to the fact that the city of the Glden Temple is ready to embrace the lifestyle of metros. Apart from the Amritsar Improvement Trust, a host of private builders, too, have launched residential projects in areas in and around Amritsar. Over 2,000 apartments would be offered to the buyers in the next one to two years. A majority of these apartments are located in integrated townships which will offer a range of facilities associated with a luxurious lifestyle. Commercial establishments catering to the daily needs of the residents, ATMs, banks, 100 per cent power back up, round-the-clock security, video access systems, fire-fighting systems, well-designed, equipped club house and sports facilities will add value to the living experience in these townships and projects. Many of these projects also offer Sewage Treatment Plants, rainwater harvesting facilities and earthquake-resistant structures. With builders going all out to bring the best and the latest trends in apartments and independent floors, there ought to be a substantial demand in this segment, says Delhi-based real estate consultant Pramod Babber, who had supervised an integrated township project in Amritsar. According to him the Amritsar realty market is ripe and ready for supply in this segment. Babber lists various factors which will popularise apartments here. “Lakhs of people living in the walled city, characterised by its congested lanes, will wish to move out to locations with better infrastructure and open spaces”, he says. It is, however, extremely difficult to get an exact assessment of the demand for flats, but with more and more younger people (under 35 years) entering the homebuyers’ league, the preference for apartments is going to rise substantially. Besides this, the rising cost of land and construction, too, is turning the dream of owning a bungalow into a difficult one to realise for an average buyer. Advantages of safety, security, easy maintenance, and easy accessibility to facilities like clubs, swimming pools, gym, hospitals, schools are the other factors that make buying an apartment a wise decision. Impact Projects’ Manager (Marketing and Sales), Sanjay Joshi says, “research points that more people are interested in built-up houses for security, adequate parking, civic amenities. However, in Amritsar land is not in short supply as yet so the demand for ready-to-move-in apartments will rise gradually”, he observes.
Choices and projects Earlier, the city’s brush with flats remained limited to three localities established by the Amritsar Improvement Trust. The Trust had constructed the dwellings in posh Ranjit Avenue, New Amritsar and Guru Teg Bahadur Mall Mandi scheme. Now, the Trust is getting designs prepared for raising super-deluxe flats in New Amritsar, on Amritsar-Jalandhar GT road. These flats would be characterised by the proportion of the total area of construction, to the open space, would be 20:80. Costing Rs 45 lakh, a flat would have three bedrooms, a dining room, a store and a servant room, with all rooms having attached bathrooms. Chairman, AIT, Sanjiv Khanna says these flats would differ in the respect that these would be maintained by a residents’ society, which would get a certain amount from the Trust in the form of fixed deposits. The interest amount would be utilised for the upkeep of the flats. On the other hand, 150 flats for lower, middle and higher income groups would be constructed in the Kabir Park locality, situated opposite Guru Nanak Dev University.
Dream City This is a 148-acre integrated township project promoted by AIPL Ambuja. Apart from plots and villas, it is also offering independent floors. In all, the township will offer 1,600 residential units which would include 250 premium villas and 217 high-end branded residences.
Horizon Buildco Private Limited is constructing 300 one, two and three BHK units on Taran Taran GT Road bypass. The cost of a two-bedroom flat is Rs 35.62 lakh, four-bedroom unit is priced around Rs 68 lakh and a penthouse is priced at Rs 1.77 crore. The project will offer facilities like power back-up, security, club membership at Rs 45,000, covered parking at Rs one lakh, and open parking at Rs 50,000 with all international standards and amenities like swimming pool, gym, steam-sauna, jogging paths, parks, dedicated parking spaces, round-the-clock security, commercial etc.
Blessings Amritsar Located opposite Sri Guru Ramdas International Airport, the township prides itself to be located next to two under-construction five-star hotels. It will have 200 independent floors in 150, 220 and 300 sq yd area. The first category will have two-bedroom units at Rs 21 lakh, 220 sq yd will have three-bedroom units at Rs 35 lakh and 300 sq yd four-bedroom unit is priced at Rs 44 lakh.
Golden Greens Located on Batala road, the Golden Greens project is spread over 7.4 acres. It will have 388 flats in one BHK, 2 BHK and 3 BHK and 39 flats for the economically weaker sections.
Ashberry Homes The Impact Group is constructing Ashberry Homes along the four-lane road connecting Verka bypass with Amritsar-Jalandhar bypass. Spread over an area of 5.1 acres, it will have 276 apartments. The group is offering one, two and three bedroom apartments in the Ground +4 and Stilt + 4 format. The starting price for a one-bedroom unit is Rs 13.65 lakh, a two BHK flat here will cost Rs 25 lakh, and threeBHK is priced at Rs 29 lakh.
Amritsar One ATM Estate Private Ltd. is constructing 484 apartments in its Amritsar One project in village Daburji on the GT Road. Kapil Sachdeva of Amritsar One said his was the first multi-storeyed project in Amritsar and gradually other players followed the trend. Two and three BHK apartments and penthouses are being constructed in this project. The smallest unit is available for Rs 29 lakh while a pentohouse is priced Rs 1.50 crore. Collage is another township on the airport road with 135 flats. Thus, with all this development the skyline of the holy city is all going to change dramatically in the next couple of years.
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Price Index
Please note: Price may vary according to the availability of parking space, location, furnished and non-furnished units, and the “age” of residential units Source:Nirmal Infrastructures-Mohali E.mail: nirmalinfrastructures@yahoo.com
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tax tips
Q. I am receiving house rent allowance of Rs 20,000 per month. Can I claim exemption of the said amount from income-tax?
— Rattan A. The exemption of HRA is regulated by Rule 2A of the Income-Tax Rules, 1962. The least of the following amounts is exempted. An amount equal to 50 per cent of salary, where residential house is situated in Mumbai, Kolkata, Delhi or Chennai and an amount equal to 40 per cent of salary where residential house is situated at any other place. House rent allowance received by the employee in respect of the period during which rental accommodation is occupied by the employee during the previous year. The excess of rent paid over 10 per cent of salary. The exemption is not allowable in case; the residential accommodation occupied by the assessee is owned by him or the assessee has not actually incurred expenditure on the payment of rent in respect of accommodation occupied by him. The facts in the query do not indicate the amount of rent actually paid by you. However, you can compute the amount of exemption on the basis of the conditions explained hereinabove. Salary for the above purpose includes basic salary plus dearness allowance if terms employment so provide.
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Whether I am entitled to deduction of expenditure towards repair and maintenance of the house in case of self-lease also; even though the amount received as self-lease is categorised as a perk and not as income from house property. Whether the amount of deductions will be 35% of the total amount of self-lease. Whether rebate is also admissible on the house tax. — Vijay Singh A. Your queries are replied hereunder: The facts in the query indicate that the company is treating the amount paid to you towards self-lease as a perquisite. The income from property would, therefore, be computed separately in accordance with the provisions of the Income-Tax Act, 1961. A statutory deduction to the extent of 30 per cent of the annual value would be allowable. The amount of house tax actually paid during the year would be deductible from the gross annual value.
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Work out income from house property
Table-A Annual letable value/rent received or receivable (higher if let out for whole of the year, lower if let out for part of the year) Rs 48000 The amount of rent which cannot be realised NIL Tax paid to local authorities Rs 3397 Total (b+c) Rs 3397 Balance (a-d) Rs 44,603 30% of (e) Rs 13,381 Interest on borrowed capital NIL Total
(f+g) Rs 13,381 Income from house property (e-h) Rs 31,222 My tenant stopped paying the rent after June, 2010. Therefore, I have calculated the income from House Property for the Assessment Year 2011-12 as given in Table-B below: Table-B Annual letable value/rent received or receivable (higher if let out for whole of the year, lower if let out for part of the year) Rs 12,000 (Rent for 3 months from April to June) The amount of rent which cannot be realised Rs 36,000 Tax paid to local authorities Rs 3,397 Total
(b+c) Rs 39,397 Balance (a-d) Rs (-) 27397 30% of (e) Rs (-) 8219 Interest on borrowed capital NIL Total (f+g) Rs (-) 8219 Income from house property (e-h) Rs (-) 19178 Is the calculation in Table-B above correct? However, calculating progressively from Sr. No. a to i , the calculator gives the figure of (e-h) = -35616. Which is the correct figure (-19178) or (-35616)? — A.K. Sharma A. The correct calculation for the period for which rent is received for three months would be as under: Annual letable value/rent received or receivable (higher if let out for whole of the year, lower if let out for part of the year) Rs 12,000 (Rent for 3 months from April to June) Tax paid to local authorities Rs 3,397 Balance (a-b) Rs 8,603 30% of (c) Rs 2,581 Interest on borrowed capital NIL Total (d+e) Rs 2,581 Income from house property (d-f) Rs 6,022
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— Dilip A. Section (2ea) of the Wealth-Tax Act, 1957 provides the definition of assets which are chargeable to Wealth Tax in relation to an assessment year. The assets includible for the levy of Wealth Tax are as under: Any guest house; residential house; commercial property and/or farm house situate within 25 km from the local limits of any municipality or a cantonment board; but excluding: a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having gross annual salary of less than Rs 5
lakh, any residential house forming part of stock-in-trade, any house for commercial purposes (i.e., commercial property) which forms part of stock-in-trade, any amount which is occupied by the assessee for the purposes of any business or profession carried on by him, any residential property that has been let-out for a minimum period of 300 days in the previous year, and any property in the nature of commercial establishments or complexes; Motor cars, other than those used in assessee's hiring business or used as stock-in trade; Jewellery, bullion, and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, other than those used as stock-in-trade by the
assessee; Yachts, boats and aircrafts, other than those used by the assessee for commercial purposes; Urban land, being land situated in any area, within the jurisdiction of a municipality or a cantonment board which has a population of net less than 10,000; or within 8 kms from the local limits of such municipality or a cantonment board, as the Central Government may notify except: land on which the construction of a building is not permissible under any law or the land on which building is constructed with the approval of the appropriate authority, any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him, and any land held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him; Cash in hand, in excess of Rs 50,000 of individuals and Hindu undivided families and in the case of other person any amount not recorded in the books of account. The assets such as, shares, debentures, deposits, units, loans advanced, etc., are not liable to Wealth Tax. Wealth Tax is chargeable at the rate 1% of net wealth exceeding Rs 30,00,000 i.e. total of the value of the assets wherever located belonging to the assessee as on the valuation date less aggregate value of debts owned by the assessee on the valuation date incurred in relation to the above said assets.
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REALTY GUIDE
Q. I have a 3BHK 1700 sq ft flat in Sector 7, Dwarka, New Delhi. I plan to shift to my new flat in Sectro 125, Mohali, after which I have the following options:
Give the flat in Dwarka on rent and hope it will give good capital appreciation after a few years. The going rent is Rs 21,000 (+/-Rs 2,000) per month. Is this a safe option? Sell this flat and buy a plot in the Tricity area. I have zeroed in on the following projects: Mohali Hills by Emaar MGF Hyde Park by DLF Sector 98-99 by IREO Fiveriver by IREO Aerocity Ansal API Sector-115/116 — Which is the best bet for long-term appreciation/overall returns? — What size plot or flat should I buy? — Should I look at NCR instead (since i am not going to be staying in NCR, is that a safe option)? My time horizon for investment is seven to ten years. — Amardeep A. If you don’t plan to stay in Dwarka then selling the flat there seems to be the best bet for you right now. All the builders that you have listed are major builders and thus investing in any of the projects mentioned by you will be a good decision. You can make your final decision keeping in mind the price negotiation, discounts and preference for location. However, while buying a plot keep in the development in the area since all these areas are upcoming areas and will take at least five to seven years to develop fully. In fact, the Aerocity area is yet to come up, while otthers are at their different stages of development. You could easily buy a plot measuring 150 to 250 sq yds in these projects.Since appreciation of land prices is good in Chandigarh’s periphery, buying a plots seems to be a good option for you for 7-10 years. I think Chandigarh’s periphery in the wake of the upcoming Metro project and major construction activity, is a promising investment option. Since you will be settling down in Sector 125 in Mohali, it would be better to buy a plot in Chandigarh’s vicinity.
Peaceful abode
Q. I live in Punjab and I want to — Kuldeep Singh A. You have number of options to buy land for the farmhouse around the City Beautiful. The area around Mullanpur where GMADA is coming up Punjab’s first eco-township is ideal for a farmhouse. Its excellent connectivity with the tricity and prices that will fit into your budget make the interior parts of this area ideal for a farmhouse. The going rate for land is between Rs 25 lakh to Rs 50 lakh per acre in the interior areas of Mohali and Ropar districts.The area around Panchkula-Naraingarh highway on the National Highway 73 is also much in demand for farmhouses. You can also explore the possibility of having a country home in the interior areas of Ambala-Chandigarh and Chandigarh-Ropar highways. An area which has good connectivity and is a bit removed from the main highways or main roads on the link roads should be preferred. The areas on the highway are costlier and are mostly preferrred by educational institutions or commercial establishments. A farmhouse is meant to provide peaceful ambience and tranquility which is difficult to get along the national and state highways and major roads. Moreover, the constructed portions should be kept the minimum since you could have to apply for change of land use. Avoid using the farmhouse for commercial purposes.
The writer is president of the Haryana Group Housing Federation. The column will be published fortnightly. Readers can send their queries at Real Estate Desk, The Tribune, Sector 29, Chandigarh (by post) or through e mail at realestate@tribunemail.com
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REAL TALK
Taneja Developers and Infrastructures Ltd. (TDI) group that has significant presence in the Delhi-NCR region and has several integrated township projects all over the country, has been a major player in the tricity and Punjab realty market for the past three years. Sanyam Dudeja, COO-Punjab, TDI Ltd. shares his group’s vision and future course of action in the tricity and Punjab areas in an interview. Excerpts:
Progress has been very slow in various projects of developers in the tricity area, including TDI projects. What is the reason and what are the steps being taken by your group to improve the pace of work? Most of the developers who have entered the real estate market in Punjab are from New Delhi/ NCR. As they entered a new state, they were not aware about the rules and regulations of Punjab Government due to which it took time for them to get adjusted. As far as TDI projects are concerned, most of our projects are on time but some delay has been there due to certain unavoidable circumstances. Apart from above fact, it should be noted that we launched our Project TDI City-I, Sector-117, 118 & 119, Mohali, in January 2008, and by the beginning of 2010 we had offered possession of many plots and since then development to offer possession in other phases is in progress and possessions are being offered from time to time. A few customers have also started construction of their houses after getting the plots registered. Also, TDI City-II, Sector-110 & 111, Mohali , is not left behind as we have offered the possession of around 250 plots (approximately). Additionally possessions keys of approximately. 52 units of independent floors have also been handed over to customers. What makes a builder stand apart in a competitive market? What is the USP of your group in this regard? In the present age of intense competition between companies to grab the attention of their prospective customers, it is very much imperative for the home builders to have a proper marketing strategy in place. Thus a builder needs to properly advertise the services that he can provide to the prospective customer. Next, focus on quality and timely deliveries will derive the best value for investors, not just in monetary terms but also lasting goodwill. This entails not just the final product but also the totality of the environment where the development is located. The USP of our group is Exclusivity, Affordability, and ready-to-move-in houses that are rich in specifications and design. You have projects in NCR and also in Punjab and Haryana, what is the difference in preferences of buyers in these regions and how do you cater to needs of different segments in different projects? The real estate business is definitely regional; each asset class requires specific expertise. There is substantial demand for mid-income residential housing in the NCR region and this provides potential for our company’s growth and development. We have been able to capitalise on this demand over the past few years. We understand the preferences of customers in the NCR region and are able to offer products fine-tuned to their needs. Our philosophy of designing our projects with flexibility of product mix, phasing, layout and pricing allow us to address changing market scenario. In Delhi and NCR customers are more interested in buying a group housing accommodation as the rates of plots are very high. Whereas in Punjab and Haryana people are more interested in buying residential plots instead of going in for a group housing accommodation as they are known across the country for their standard of living and rich lifestyle. We have planned all our commercial and residential projects in close proximity of the existing and/or planned urban infrastructure such as metros, expressways, international airport.
How helpful or otherwise are the government policies to developers and builders and what changes do you want in this regard? For a wider practice of private sector participation in infrastructure development, it is necessary to instill confidence in the minds of prospective private sector investors and also to streamline the process of selection of private partners. For achieving this it is imperative to have a comprehensive policy on private sector participation in infrastructure development or, in other words, a Policy on Public Private Partnership (PPP). As there are a number of private entities interested in participating in infrastructure development with the government. It is essential to carry out an assessment of capability of those firms through a method of pre-qualification bids. Only the qualified private entities should be considered for partnership in infrastructure development.
What are your future plans for the region? Sharp focus on the tricity and Punjab region is on top of our plans for the region. We recognise that continuing to build on our land reserve is important to our growth strategy. We will be acquiring additional land across the Punjab region at strategic locations. Chandigarh and tricity real estate market in specific is very attractive on account of its favorable demographics, presence of major international and domestic companies in both the manufacturing and services sector and large infrastructure projects and social infrastructure under development. Leveraging our knowledge of the NCR real estate market, we are currently exploring the potential of the Punjab real estate market. Our experience in executing large projects in the region and our understanding of consumer preferences uniquely position us to be a dominant player in both the Delhi NCR & Punjab markets. — As told to Geetu Vaid
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REALTY BYTES
Real estate firm ATS Group would develop two housing projects in Gurgaon with an investment of nearly Rs 550 crore. The Noida-based company would develop 924 housing units in both these projects over the next three years. ”We are foraying into the Gurgaon real estate market with two group housing projects. The first project, spread over 12.2 acres, will be developed in joint venture with land owner Chintels Group,” ATS Group Managing Director Getamber Anand told reporters.
ATS would develop the second housing project over 14.59 acres of land, out of which 10.5 acres have already been acquired by the company. This project would be launched early next year. On funding the proposed investment, Anand said the financial closure of the projects has been achieved.” We have raised funds from HDFC Portfolio Management Services for the second housing project,” Anand said, but refused to give further details. Expansion plans CHD Developers Ltd. will add an additional 23 acres of plotted development in its flagship township CHD City in Karnal. More than 400 dwellings and villas are currently under-construction in the integrated township. Commenting on this new development Gaurav Mittal, Managing Director, CHD Developers Ltd. said, "We plan to expand the township further and the total size in future would extend to 300 acres." The township offers landscaped parks, schools, healthcare centers, food and entertainment zones and has been planned by renowned planner Sanjay Puri. — Agencies & TNS
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Taneja Developers and Infrastructures Ltd. (TDI) group that has significant presence in the Delhi-NCR region and has several integrated township projects all over the country, has been a major player in the tricity and Punjab realty market for the past three years. Sanyam Dudeja, COO-Punjab, TDI Ltd. shares his group’s vision and future course of action in the tricity and Punjab areas in an interview.
Q. I am an employee of a company. Although, I stay in my own house, the company pays me a monthly amount of lease commonly referred to as 'Self-Lease'. The amount of self-lease is paid separate from salary. The lease value of the house was assessed by the company. The total amount of self-lease is made up of two parts. The major part (about 80%) is contributed by the company and a lesser or minor part (about 20%) is deducted from my salary. The contribution of the company appears as perk in my income tax return. I also pay house tax. Normally, a deduction of 35% is available on income from house property towards expenditure on repair and maintenance of the house. Please enlighten me:
Q. Kindly guide me in calculating income from house property in respect of my flat in Delhi which was on rent @ Rs 4000 per month. For the past five years I have been calculating it as given in the Table-A below and clubbing it with my salary income.
Q. What are the assets which are chargeable to Wealth Tax as well as the rate of Wealth Tax?