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‘Green’ touch for affordable housing
tax tips
realty bites
REALTY GUIDE
Green house
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Pristine charm
Perched at a height of 2,250 meters above sea level, the pristine hill station of Chail is emerging as a hot spot of realtors with several resorts and guest houses dotting its periphery.
Since a majority of hill stations in Himachal Pradesh have been marred by crass commercialisation, the people who prefer a quiet stay away from the hustle and bustle of big cities are now showing their preference for Chail. The majestic deodars and breathtaking beauty of Chail are enough to mesmerise a visitor. Set up after the shahi farman of Maharaja of Patiala Bhupinder Singh as his summer capital, the town is thronged by tourists from Punjab and Delhi and many rich and famous have built palatial bungalows and houses around it. Though a number of politicians from Punjab and Delhi have also set up snug cottages in the area, no commercial complex has come up in Chail as yet. As far as realty growth is concerned, the town has its limitations. Being part of a reserved sanctuary all constructions have taken place in its vicinity in various villages like Mahog, Dunu, Sakhori, Barech, Katla, etc., as no sale or purchase of land is permissible within the sanctuary area. This has, in fact, proved to be a blessing in disguise as the town's pristine character has remained intact in spite of the tourist interest. So the realtors are cashing in on the pristine beauty and nature's unblemished ambience here. Gauging the response of the tourists visiting Chail, the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) is now trying to acquire land for setting up a housing colony at Chail, and various sites are being explored for this. A private coloniser is coming up with a housing project near Janedghat, around 8 km from Chail on the Chail-Kufri road. With the nearest village of Mahog, which is about 5 km from Chail, being a hub of floriculture, realtors are on the lookout for land in villages further ahead. As the locals make a hefty profit by selling quality flowers they have little inclination to sell land for commercial ventures. The town barely had a Himachal Pradesh Tourism Development Corporation-owned Palace Hotel until a few years ago but the emergence of a five-star hotel on the Gaura Road has tempted other realtors to invest in the area. This has led to the coming up of several guest houses and hotels all along the Chail-Kandaghat Road. With the process of de-notifying the town's prime area from the sanctuary area underway, the locals are optimistic that this would help ease the sale and purchase of land though they are against crass commercialisation. “Land price here is around Rs 35-40 lakh per bigha which is 2 to 3 times less than land prices in Manali and Shimla. This is a major attraction for realtors. Since tourist interest has shifted from the crowded hill stations to quieter places, Chail is the emerging real estate destination in the district”, opined Kamal Anand, who is constructing a hotel here. Chail is ideally located as it is closer to Chandigarh and Shimla in comparison to other hill stations in Himachal. Thus investors are keen on exploring the potential of this town. But local residents feel that lack of facilities and activities to lure tourists to prolong their stay here is a major roadblock in the growth of the realty sector here. Devinder Verma, who has been running a hotel here for the past several years, says, “The tourism department should boost tourism by organising summer and winter festivals on the lines of those being organised in other hills stations and build some camping sites in the forest area, but no commercial activity should be allowed in the forest area”. He adds that since very little land is available for constructing hotels and flats, efforts should be made to develop Chail as a better tourist destination where the nature walks and camping sites can be offered. Realtors are now exploring the possibility of constructing cottages around the town to bring in more and more tourists which will bring in commercial and retail complexes and enrich the realty scene of this quaint town.
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‘Green’ touch for affordable housing The International Finance Corporation (IFC) has decided in principle to support affordable housing in the Rs 5-7 lakh range for the Indian lower-middle and less-affluent segments.
It plans to work with multiple agencies, including the government bodies and private sector players. IFC is also keen on supporting the private sector house builder, who is capable of delivering value housing, It will bring in the expertise that it has built up internationally, particularly in economies in Latin America and South East Asia, where it has solved the problem of affordable housing, despite high GDP growth rates that are driving up the costs. The investment arm of WB is working with the National Housing Bank on a report for addressing country’s need for affordable and environment-friendly housing. IFC will also address the regulatory side by working with the authorities concerned on the mandatory minimum standards of efficiency. It has built up experience in Indonesia and other countries, and is keen on bringing similar initiatives to India and China. While the IFC will work with agencies such as the Bureau of Energy Efficiency, its focus will be more on working at the ground level with state-level agencies. It is keen for ‘traction at the ground level’. State governments in Rajasthan, Gujarat and Tamil Nadu are moving in the right direction, and can benefit from support in developing knowledge in human resources among
the authorities. It is looking at a line of financing that lays emphasis on green housing. IFC is talking to some developers in major cities to explore opportunities for direct financing of projects. The IFC is also partnering with the National Housing Bank to set up a mortgage guarantee company, IMGC. This will be a Public-Private Partnership between NHB, IFC, Asian Development Bank and an international mortgage insurance holding company, Genworth Financial International Holdings, a part of the US-based Genworth Financial, a financial services company. IMGC will provide credit risk coverage to residential mortgage lenders, to protect them in case of borrower default. IFC will invest Rs 80 crore during the next five years, to take up to 19 per cent equity stake in the company, to be headquartered in NCR, Delhi. — S.C. Dhall
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Q. I sold an apartment in my newly constructed house (in urban area) in December, 2011 for Rs 45 lakh. I have spent Rs 18.5 lakh on the construction of this apartment from 2005 to 2011. I want to reinvest this amount for purchasing an apartment for my son at the place of his posting. What are the income tax rules for this sale and purchase? What is the period for reinvestment of this amount to avail of the tax relief? There is confusion about the investment period as some people say that I have to invest the desired amount within two years, but others say that as per the latest rules before reinvesting I will have to keep the amount in a capital gains account for three years to get income tax relief.
— Parkash Vaidya n
It would be desirable to purchase a new apartment in your own name so as to save the tax leviable on the long-term capital gain arising on the sale of the residential house. The purchase of the new residential house should be effected within one year before or two years after the date of sale of a residential house. n
So much of the amount as is not utilised for the purchase of the new residential house before the due date of filing the Return of income by you in respect of the year in which the long-term capital gain has arisen, should be deposited in a bank under capital gain scheme account. The amount so deposited can be withdrawn for the purposes of purchase of a residential house within the aforesaid period.
Spend net sale consideration on new house Q. I own a plot located in a good locality and its market price has gone up tremendously over the years. The plot was purchased about 10 years back. I intend selling the same and would like to construct a residential house for my own use by buying a plot at a place which is much cheaper. Would the capital gain accrued on the sale of a plot be taxable in such a case or any exemption can be claimed under the provisions of the Income Tax Act? — Vijay
The amount of net consideration which is not utilised towards the acquisition or construction of the house before the due date of furnishing the income tax Return under Section 139 of the Act, is required to be deposited with a bank under the capital gains scheme account. The amount so deposited can be utilised for the purchase or construction of a residential house within the period as specified hereinabove. The income tax Return is required to be accompanied by proof of such deposit so as to claim the exemption.
Utilising sale proceeds Q. I had purchased a plot for the construction of a residential house in 1998. I could not construct a residential house because of the limited resources available with me. I intend selling the same and purchase a plot at Hyderabad in the name of my son who is settled there. He will be able to get loan from his employer at a very low rate of interest and for that purpose the plot is intended to be purchased in his name. Will the capital gain arising on the sale of the old plot be exempt from tax in case the new residential plot is purchased in my son's name? — Ravi Shankar A. In accordance with the provisions of Section 54F of the Act, the net consideration from the sale of a long-term capital asset is required to be utilised by the assessee for the purchase of a residential house within a period of one year before or two years after the date on which the transfer took place or for the construction of a residential house within a period of three years after the date of the transfer. The net consideration for the purposes of the Section means, the full value of consideration received or accruing as a result of transfer of the capital as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The essential requirement of this Section is that the acquisition or the construction of the residential house has to be in the name of the assessee. Therefore, in case the plot is acquired in the name of your son, the capital gains tax would be payable on the sale of the residential plot purchased by you in the year 1998. The tax rate as applicable for assessment year 2012-13 on such capital gain will be 20% plus education cess of 3% thereon.
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realty bites
Real estate firm M3M has bought 28 acre of prime land in Gurgaon from the country's largest developer DLF for Rs 440 crore and will invest another about Rs 660 crore to build a housing project on it.
"We have purchased 28 acres from DLF in Gurgaon where the company will be developing a residential project. We will soon launch this project," informed M3M Finance (HEAD) Gaurav Jain. He said the company had licences to start construction on the project and would be developing about 1,700 housing units in this project. According to Jain the total investment would be about Rs 1,100 crore that will include the land cost of Rs 440 crore. The project cost would be funded through internal accrual and advances from customers. Gurgaon-based M3M Ltd, which has over 600 acres of land bank, claimed that it is a debt-free company. It is building a luxury project - M3M Golf Estate - on 75 acres in Gurgaon and is expecting a revenue of $1.5 billion from it. The company has launched more than 10 million sq ft of area worth $ 2.5 billion in the last one-and-a-half years. DLF has been selling its non-core assets such as hotel plots for the plast couple of years to cut debt that stood at Rs 22,519 crore at the end of September quarter. It had raised Rs 3,480 crore from the sale of non-core assets till the second quarter of this fiscal. The plan is to raise a total of Rs 10,000 crore from this process over the next few years. Last month, DLF and Hubtown sold an IT SEZ in Pune to private equity firm Blackstone for Rs 810 crore. DLF and Hubtown held 67 per cent and 33 per cent equity shares in the SEZ, respectively. DLF is in the process of selling its hospitality venture Aman Resorts, which it had acquired in 2007 for USD 400 million. The company is expecting about Rs 2,500 crore from the deal. — PTI
Award for
Vardhman group The Vardhman Real Estate and Promoters group bagged the "Commercial Developer of The Year " award at 26th Builders Council of India (BCI) award function recently for demonstrating excellence in developing and delivering real estate properties (commercial). The BCI recognises organisations and individuals that have created and delivered new benchmarks of excellence in their sector. Talking about the company's latest achievement in a challenging though successful year, Rajender Jain, CMD, Vardhman group, said, " Behind our success are well-designed systems and processes that incorporate global best practices, transparency, a value-driven approach, customer centric values and reliability. There has always been and there will always be a demand for quality development; it is up to us to be able to convert that demand through fair practices, quality work and timely delivery".
Mahindra arm plans Rs 250 cr project Mahindra Lifespace Developers, the realty arm of the $14.4-billion Mahindra Group, will be investing Rs 250 crore in a residential project in Hyderabad soon. "We are currently doing the site preparatory work. The project, on a 10-acre site at Kukatpally, will be launched in the next couple of months and will be delivered in three years from then," Anita Arjundas, managing director and chief executive officer of the group said recently. Elaborating about the group's plans, she added, "We have land parcels in five cities and investments in them have already been done while we require Rs 2,000 crore for the construction." The company's board had approved additional borrowing of up to Rs 500 crore via non-convertible debentures (NCDs) or term loans. "We, however, will look to raise Rs 250 crore via NCDs to part-fund our ongoing projects by the end of the present financial year." Stating that Hyderabad, Pune and Nagpur would be the next important markets for the company, she said they were exploring other long-term opportunities actively in Hyderabad.
Synergy Property bags 1,239 cr
realty order Project management and consulting firm Synergy Property Development Services has bagged two residential projects from the Bangalore-based Embassy Group worth Rs 1,239 crore on turn key basis. Under the contract, Synergy
will manage the entire development the projects including design, procurement, construction management, co-ordination, engineering and will be responsible for time, cost, quality
and environmental health and safety standards, the company said in a statement. The two projects are Embassy Boulevard and Embassy Lake
Terraces coming up in Bangalore, it added. "We have taken up the challenge to deliver the projects through international standards. We have even mobilised resources, local and international to ensure high standards," company's Chairman and Managing Director Sankey Prasad said. — PTI
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Q. My mother purchased land long time ago. Intkal was also done in her name at that time. Even the tritma of land was also drawn. But we did not take possession then. After her death, I applied for the transfer of land in the name of legal heirs and to get nishan bandi also. But the depatment told us that it cannot give us the nishan bandi as the land is not in our name. Moreover, it cannot be entered in the name of legal heirs also as the intkal was not entered in that year’s jama bandi, as well as till now. Kindly advise me how to go proceed in this matter.
— Manjit Singh A. First of all do you have a copy of the original registry and actual furd in your mother’s name when she purchased the land? If you have the abovementioned documents with you, then you can pursue for the change of ownership in your name (legal heir). Firstly, the land has to be transferred in the name of the legal heirs of the deceased owner of land. Other things like nishan bandi can be done in your name only after the land has been transferred in your name. If your mother has left a Will, then it has to be probated from the court to tranfer the land in your name. Or you can take advice of an advocate dealing in civil matters.
Legal right in HUF property Q. I just wish to know about the property which had been purchased by the efforts of two brothers, who started their business after resigning from government jobs at the age of 27 and 29 years, respectively. The business was started in a rented house and the brothers got no monetary help from their parents. The same rented house was purchased by the two brothers in 1980s, but being HUF and partnership business, the said property was purchased in the name of the elder brother. The same house is worth crores now. The sons of the elder brother are now forcing the younger brother and his family to vacate the ground floor of the house. As it is a HUF family, whatever has been spent on the purchase of the house and its maintenance and renovation is being paid from combined funds. The younger brother has 50 per cent partnership in business and the business premises is combined property. How can the younger brother stop his nephews from harassing and forcing him to give up his share in the property? — Sunita A. The younger brother is having the possession of the premises legally and has legal share in the joint undivided family property. Sons of the elder brothers have no legal right to harass him and ask him to vacate the house. Under a joint Hindu family, each co-parcener (one of two or more persons sharing an inheritance) acquires a right over the joint family property by birth, and each of them shares joint ownership and use over the entire joint family property. Partition is a division of joint right into several rights. It is different from gift or transfer of property. Partition refers to the severance of joint status. There should be a definite and unanimous indication of intention by the members of the joint family to separate. The intention may be expressed by serving a notice on the other co-parceners. In my opinion you can go for a partial partition of property i.e. your house in which you are living. A partition between coparceners may be partial either in respect of the property, in respect of the person, or in respect of both. When there is a partial partition, it is open to the members of the family to retain their status as members of the joint undivided family and hold the rest of the properties jointly. In case of partition between the co-parceners, any one or more co-parceners may remain 'joint' with their own descendants. This will form an undivided joint Hindu family among them. A joint family property is split into two or more divisions and is transferred to be held by the co-parceners as their individual properties. When a property is divided, each party to the partition derives absolute ownership over the property allocated to him. The remaining persons of the family lose their right over the portion of the property so allocated to any one individual upon such partition. In case certain properties cannot be divided because of practical reasons, partition can be effected by giving monetary compensation or allocating some other assets. A partition deed is executed by the co-parceners of the joint property to mutually divide the property among them.
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Plants having thick or swollen base, either underground or over ground are Caudiciforms. The beauty of these plants lies not only in their leaves and flowers, but also in their swollen trunks. They have a very unique look which makes them the centre of attractin in any garden. The recent spurt in interest in these plants is attributed to their easy availability in the region now. The swollen portion of the plant is called caudex. The formation of caudex and its character varies from species to species. Seed-grown plants generate a much better caudex than those grown from cuttings.
As most of these Caudiciforms are adapted to arid conditions, they have the ability to store water and nutrients in their caudices and need comparatively less water than other plants. Some of adeniums, adenias, bombax, dioscoreas, eurphorbias, fockias and pachypodiums have amazing caudices and are relatively popular plants. Here are two species that grow well and look beautiful in Indian conditions. EUPHORBIA
Wonderful specimens of this plant are created in pots. In nature the caudex of this plant is underground. It has beautiful, artistic and intermingled roots. The unknown secret of beautifying the plant is to pull the caudex out. The technique to do this involves the following steps:
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Grow the plant in a deep pot for about two years. n
At the time of re-potting, lift the caudex over ground as much as possible. n
Repot the plant alternate years, and at every repotting, lift the caudex further by about an inch. Within five years you get a wonderful specimen of a caudiciform, which looks beautiful all round the year. The plant can accept neglect and can survive over watering and under watering, however it is always better to water only when the top soil becomes dry. It bears thorny branches about 12-18 inches in length emerging from the top central portion of the plant. Some of the older branches that hang from the pot should be removed from the base. It can also be made into a beautiful hanging basket, provided hanging branches are kept intact. The plant does not shed its thorny branches and grows well from full to partial sun conditions. Propagation can be easily done by cuttings.
FICUS
PETIOLARIS
This looks like the peepal tree and is a much sought after plant worldwide. It develops a very fine and wide caudex at the base. It can grow to a height of 30 ft in the natural habitat (Mexico). The fresh growth of leaves is reddish in colour with pink to red veins, but with the passage of time the leaves give a metallic green sheen. Its heart-shaped leaves, which are leathery with pointed tips, resemble leaves of the peepal tree. For the caudex to develop well it should be grown in a shallow pot. The plant should be watered regularly during growing season (summers). Care should be taken that watering is done only when the top soil gets dry as over watering will kill the plant. During winter months the plant goes into dormancy and sheds its leaves. Its requirement of water also reduces considerably during winters. It grows well under full to partial sun. With some pruning and shaping, the plant can be trained as a beautiful bonsai and for aesthetics; the size of leaves can be reduced
during growing season by the process of defoliation. Propagation of the plant can be done by taking cuttings of preferably 4 inches. A beautiful and healthy caudex is normally generated by providing: n
Porous soil mix with good drainage The writer is President of The National Cactus and Succulent Society of India
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IFC, which has embarked on a major initiative in the housing finance sector in India for the first time, is looking at supporting mass housing and ‘truly affordable housing’. Dovetailed with this initiative will be efforts to keep the housing projects that it will support in line with appropriate green building initiatives — environment-friendly, energy, water and other resources-efficient structures. 
A. It is assumed that the land for the residential house constructed by you was acquired in 2005, and therefore, the land so acquired would be in the nature of a long-term capital asset. Capital gain arising on the sale of the land would be treated as a long-term capital gain. The gain, if any, arising on the super structure may also be in the nature of long-term capital gain provided the construction was completed three years before the date of the sale. The reply to your query is based on the aforesaid presumption.
A. You will be entitled to claim an exemption under Section 54F of the Act on the capital gain arising from the sale of the plot as it is a long-term capital asset, if the net consideration on the transfer of the plot is invested in the purchase or construction of a residential house. The purchase of the house has to be within a period of one year before, or two years after the date on which transfer of the residential house takes place. However, in case of construction of a house the time period of three years has been provided in the Section. Net consideration means the full value of consideration received or accruing as a result of the transfer of the long-term capital asset less any expenditure incurred wholly and exclusively in connection with such transfer. The proportionate exemption is also allowed in case full net consideration is not so invested. The exemption under Section 54F of the Act is allowable only if the assessee does not own more than one residential house, other than the newly acquired residential house, on the date of the transfer of the long-term capital asset.
