Real Take: BUDGET 2012-2013
No booster shot for realty
Geetu Vaid

For a sector that had been bearing the heat of rising input costs, debts, fund crisis and cautious buyer sentiment, the Finance Minister's budget offerings were nothing more than a bland, tepid and fizz-less cola that does little to soothe the parched throats. With expectations building up in the weeks preceding the Union Budget for 2012-2013, there has been widespread disappointment among the buyers and builders after the fiscal blueprint for the next year was unveiled last week.

Terming this year's Budget as disappointing, Lalit Kumar Jain, President of the Confederation of Real Estate Developers Association of India (CREDAI), minces no words while expressing his disappointment by saying, "The Finance Minister has failed miserably in highlighting the importance of the role of housing in economy, employment generation, apart from the very need of housing".

CREDAI, which is the apex body of developers in the country with over 8,000 members, had been vociferously seeking industry status for the sector apart from policy measures to increase liquidity and ease the flow of funds to enable builders to fight inflationary pressures and provide quality services to the customers. While the demand for industry status, which would have brought down the borrowing costs for builders, was ignored this year too, the increases in service tax and excise duty have added to the woes of builders as well as the buyers. The cash-strapped builders will now be hard pressed to pass on the burden of increased costs to the end user, thereby making the dream of owning a home more distant for the common man. Earlier in the week the National Real Estate Development Council (NAREDCO) president Navin M Raheja hinted at a minimum two per cent hike in property prices. "For the existing buyers, developers are likely to pass on the service tax burden only, but not the excise duty hike as the agreements had been signed earlier. However, for the new buyers, we will pass on the entire burden," Raheja, who is also the Chairman and MD of Raheja Developers, added.

The excise duty hike will mean the prices of raw materials like steel, cement, electrical and other finishing equipment are bound to go up. Usually, the cost of construction, which accounts for 70 per cent of the total expenditure, will bear the pressure of the excise duty hike. The service tax is usually charged on the remaining 30 per cent of the expenditure, said Raheja. "We definitely expected a huge impetus for the affordable housing sector, which according to the government's own stated objective will provide 'shelter for all', and as a measure to boost the economy," said Jain, who is also CMD of Mumbai-Pune realty developer Kumar Urban development Limited (KUL).

Terming the Budget as unexciting and with no vision for the housing sector, Anshul Jain, CEO of DTZ, India, says, "The Budget, along with the 75 bps cut in CRR cut earlier this month do not lend any major cheer to the real estate sector. Although the CRR cut does lend liquidity to the market, however, if there are no takers, then there is little utility of such measures. Till such time the interest rates (repo rates) are cut, no major development can be expected in this sector. After this month's RBI Credit Policy, it may not be a sforegone conclusion that interest rates will be cut in April. This sector still needs at least a 100 bps reduction in rates to encourage home buyers and builders to approach banks to raise funds". Increase in the limit of tax deduction on home loan interest from Rs 1.5 lakh is another long-pending demand which was once again put into cold storage this year. The marginal increase in individual tax exemption limit from Rs 1,80,000 to Rs 2,00,000 is also not likely to have much impact on the buying capacity of middle class buyers.

However, clearing the decks for External Commercial Borrowing (ECB) for affordable housing is seen as a silver lining to the otherwise disappointing fare. This move has been welcomed by developers across the board. The government has also reduced the withholding tax on ECB's for affordable housing to five per cent for three years. Hailing the step taken in this regard Anuj Puri, Chairman and Country Head, Jones Lang LaSalle India, says, "It will ensure better capital availability for developers of low-cost housing. This sector is typified by low margins, and it becomes attractive only if developers are enabled to produce greater volumes. Better capital availability will help in timely project execution, which will result in higher volumes". However, expressing his reservations on the feasibility of the move Pankaj Bajaj, President, CREDAI, NCR says, "As the ECB clause comes with a number of rider, it remains to be seen if companies will actually be able to raise any ECB with these riders".

Buyers beware

So, the ground reality is that the big thrust that the realty sector was hoping to get from this year's Budget provisions is surely not going to happen, and home buyers will do well to brace up for increase in property prices. And for those who are planning to take a "plunge" in the property market, caution is the key word. The best strategy will be to steer clear of overpriced properties and weigh the future prospects and appreciation factors very carefully as the increase in service tax would mean that they will have to pay more as it is.

March 22 was World Water Day 
Spare a thought for water harvesting
Vivek Shukla

The sweltering summer is just round the corner and so is the water scarcity that millions in metros and other cities in our country face each year. And this despite the extensive awareness campaigns regarding how rainwater harvesting can effectively ward off water shortage in our teeming cities. Since June 2001, the Ministry of Urban Development has made rainwater harvesting mandatory in all new buildings with a roof area of more than 100 sq. m. and in all plots with an area of more than 1000 sq. m., that are being developed. The Central Ground Water Authority (CGWA) has also made rainwater harvesting mandatory in all institutions and residential colonies in notified areas (South and South-west Delhi and adjoining areas like Faridabad, Gurgaon and Ghaziabad). This is also applicable to all the buildings in notified areas that have tubewells.

Ramon Magsaysay Award winner, Rajinder Singh, who has been advocating this cause, says that considering the fact that water level is going down drastically, water conversation is the only answer. If do not wake now, then it would be very late.

The Indus Valley Civilisation, that flourished along the banks of the river Indus and other parts of western and northern India about 5,000 years ago, had one of the most sophisticated urban water supply and sewage systems in the world. The fact that the people were well acquainted with hygiene can be seen from the covered drains running beneath the streets of the ruins at both Mohenjodaro and Harappa.

Water woes

Delhi requires around 850 million gallons of water daily, whereas the supply is only 650 million gallons. An analysis based on the rainfall availability and demand-supply gap shows that even 50 per cent of the rainwater harvested could help in bridging the demand-supply gap," said an officer of Central Ground Water Board (CGWB). He said more than anything, a collective effort is required to make it a reality.

And Chandigarh residents, too, need to brace themselves up for water shortage this summer. A reality check by the engineering wing of Municipal Corporation has revealed that Chandigarh needs 105-110 million gallons per day (MGD) in the summer season, but the present availability is only 87 MGD.

Though the engineering wing is installing 10 new tube wells in the city and repairing 12 other non-functional tube well to bridge the gap between demand and supply, these measures will only help in getting 6 MGDs more. While the city residents will have to use water judiciously and sparingly, the civic body has also chalked out a plan to penalize anyone wasting water. In the city beautiful, people are not very much care about water harvesting during rainy days.

The way out

Who, then, is to be blamed for water scarcity during summer months? Are the developers making necessary arrangements for rainwater harvesting?

These are very important questions that deserve serious answers. "Of course, you can not ignore the fact that water is not enough, hence we need to save it. The developers are making arrangements for rainwater harvesting in their complexes," says Sunil Jindal, CEO of SVP developers. In a number of cases it is the lack of interest shown by the residents that leads to truncated benefits of rainwater harvesting in residential complexes. "The inability to react except in a crisis is so typical of us. That is why rainwater harvesting has not picked up. The procedure is systematic, not complex. However, we must avoid over-simplistic solutions too, which only proliferate, serving no purpose", adds Jindal.

"Our customers can always find out from us how to maintain the water harvesting system, ensure water supply and replenish groundwater. It goes without saying that a success story of water conservation in an apartment complex will spread the word around and will be looked upon as a major achievement in times when the word scarcity is so closely associated with water," informs Gaurav Mittal, Managing Director of CHD Developers.

Highlighting the need for residents to take concrete steps in this direction, V.K. Jain, Chairman of Delhi-based NGO, TAPAS, says, "Resident Welfare Associations (RWA) can spare some time from their daily schedule and meet on the various aspects of rainwater harvesting in their area. Rainwater harvesting can be taken up and implemented successfully in key cities by all concerned individuals, who are looking a way to fulfill their own water needs."

Jain emphasised the need to revive the age-old Indian tradition of water management. Explaining this management system, he said, "It was built on two principles: one, rainwater harvesting had primacy over river water or groundwater harvesting; and community and household management had primacy over state supply of water. So every household had a role to play in collecting rainwater. Every drop was harvested."

Just putting a system in place is not enough until and unless it becomes a collective responsibility of each resident to ensure its workability. As Rajinder Singh says that we have to move from a mindset of plenty to one of scarcity, meaning unlimited supply is no longer an option and we have to learn to manage demand. We have to learn from those within our country and outside who have managed with less and made the most of a scarce resource. One has to visit rural Rajasthan and Gujarat to know what efficient use of water at household level is all about.

And last but not the least, please ensure that there is no leaky tap or valve in your house. Such small efforts can make a lot of difference.

Green house
Sculpted grace on your window sill
Maj Gen C.S. Bewli

The attractive and colourful Haworthais are mostly stemless mini succulents from South Africa, and are an excellent option for small homes, where there is a space crunch. These plants can be grown in 10 cm pots and can thrive on window-sills. A reasonably good and varied collection can be made in a limited space due to diversity in shape, colour, size and surface structure of the leaves.

These form designer rosettes of thick and fleshy leaves, which look carefully sculpted. Some species have firm, tough leaves, usually dark green in colour, whereas others are soft and semi-translucent. The rosette size varies from 5 to 8 cm. Some of these plants form clumps, while others remain solitary.

In north India their growth period is during winter months from Diwali to Holi. During summer months these plants go into dormancy and tend to lose their roots and in autumn fresh growth of roots take place.

These plants need porous compost as that of cactus. The right time to re-pot is the beginning of November.

Haworthia flowers are normally white or off-white in colour and are borne on stalks, which arise from near the centre of rosette.

These plants are basically grown for their architectural form of rosettes and their decorative leaf markings. The beauty of this genus is that these plants can be successfully grown in glasshouse culture, window-sill or indoors. They can tolerate less light conditions, but in order to produce their colourful foliage, they need some filtered sunlight.

Some of the popular species are Haworthia truncata, comptoniana, viscosa, attenuata, limifolia, pumila and coarctata. There are many variegated hybrids and cultivars which are very much sought after.

Propagation is through offsets, leaf cuttings and by seeds.

— The writer is President of National Cactus and Succulent Society of India

Haworthia Comptoniana

It is an easy to grow ornamental plant and one of the most beautiful of all Haworthias. It is solitary in nature and grows up to 10 cm in diameter. The emerald colour fleshy leaves are triangular in shape and are arranged in a star shaped rosette. The beauty of the plant lies in its distinctive appearance with leaves exhibiting white veins and reddish margins with an intricate lacework. The plant grows well under light shade to bright filtered sunlight. Water freely during summer but extreme care is taken while watering during monsoon.

Haworthia truncata

It is a slow-growing and a very attractive miniature species. It does not produce a rosette, but instead produces rough thick greyish-green leaves. Upper surface of these leaves give an impression as if they have been cut from top, and thus is very easily identified. This miniature masterpiece of nature forms beautiful clumps up to 15 cm diameter and should ideally be grown in a shallow tray.

Haworthia viscosa

It is a very unique plant which is recognised by its cylindrical column of very densely packed greyish green triangular, sharp-pointed leaves. The leaves are rough to touch. It is a robust plant which offsets from the base and forms beautiful clumps reaching a height of about 20 cm. There are several forms of this species worthy of collection.

Tending tips

n Use cactus compost and re-pot every two years, preferably in November.

n During summer months over-watering will kill the plants, just spraying of some water once in a fortnight should suffice.

n Water freely during winters, but allow the compost to dry between two irrigation cycles.

n Place the plants in filtered sunlight to get colourful foliage

n Protect from direct sunlight to prevent leaf tips from drying.

Pick of the week
Ideal to day dream

The Day bed by Punam Kalra I'm Centre for Applied Arts comes in hard wood rock - Wenge Wood. The colour and texture of wood have been kept natural and the no-fuss shape has rendered it contemporary looks. The coloured fabric coupled with quoise dark brown wood is adds to the plashes of the piece. Anyone would be proud to own it.

Rocking inspiration

Johnson's new Stonex wall tile collection is inspired by the beauty of natural rocks and stone and aims to bring nature closer to one's living spaces. The Johnson Stonex collection replicates the prolific sedimentary stone and rock designs on walls (both indoors and out) in a variety of colours and designs. Available in over 35 designs, this range promises to provide ultimate design flexibility in creating retaining walls, seat walls, outdoor kitchens, patios, seat walls, fire pits, outdoor kitchens and much more. It is available at all House of Johnson stores across the country in sizes of 450mm x 300mm and 600mm x 300mm. The price starts from Rs 75. — TNS

Vaastu Wisdom
Not bound by religion
Madan gupta spatu

Q. I am a Muslim who converted to Christianity and cannot worship Hindu deities as suggested in vaastu columns in various newspapers and electronic media. Does it diminish the benefits of vaastu? —Abdul Masih, Malerkotla

A.Vaastu Shastra is a Sanskrit language term combining the words Vaastu, meaning a dwelling or workplace, and shastra, which means a system of science or art. Vaastu Shastra is an ancient Indian architectural science that evolved some 5,000 years ago with roots in the sacred Vedic texts. Its principles of building planning and construction seek to bring about an ideal and harmonious balance between humans and the environment. All directions have been associated with different Hindu gods and goddesses which are more symbolic than religious. I am giving below the real and practical significance in day-to-day life irrespective of any religion. In fact, astrology and vaastu deal with human beings rather than any sect, caste, colour and creed.

And as a balanced existence generally paves the way for a happy, fulfilled one, following the principles of Vaastu Shastra can result in a life well-lived.

North-east (Eshan) is ruled by Sadasiva or the supreme God himself. Hence this direction is paramount, which demands keeping it scrupulously clean, open and highly receptive in a welcome "mode" always.

East is ruled by Indra, the chief of the gods, giver of pleasures. The direction also represents the realm of the rising Sun projecting ultra-violet rays, so essential for health in several ways.

South-east (Agneya) is the habitat of fire, the storehouse of energy.

South is the abode of Yama, the god of death.

South-west (Nairitya) is the abode of Putna demoness.

West is the abode of Varuna, the god of ocean. It is also the direction of the setting Sun which gives infra-red radiation.

North-west (Vayavva) is the abode of air/wind, the invisible, but the most effective blessing for all objects in need of motion/movement for their efficiency.

North is the abode of Kuber, the god of wealth. 

Kitchen directions

Q. We recently modified our house but have left the kitchen unfinished. Can you give some advice in this regard? —Pooja Parmar

A.Kitchen in SE is correct. Cook while facing east. Water taps can be anywhere but not in a corner. Southeast is the 'seat' of Agni (fire) energy. It is a good place to cook food because the food cooked here will receive the nourishing effects of the Agni energy. Also, for the woman of the house, the infra-red energy coming in that area is very healing. Cooking while facing east in that area is very good for the mistress of the house.

Power of pyramids

Q. Can using Pyramids in homes help people who do not believe in these? —S. R Gupta

A.Pyramids are very much a part of vaastu knowledge. The sacred temples are all great pyramids. It's possible that we can create a pyramid that would help energise the space but not just any pyramid. It must be dimensioned properly in all directions. So many experiments have already been conducted with pyramids after seeing Egyptian Pyramids. I have seen some immediate and powerful effects rewarding the work of self-confessed unbelievers. Pyramid or PyraVaastu is not a form of magic. It works on the scientific principles of space and mind, and will have an effect whether or not people can feel it or know that it is being used. But if a positive mind and a strong faith is added to it, then it can yield miraculous results. 

A stylish oasis of creativity

Mind needs a space of its own, metaphorically as well as physically. Creating a learning space that inspires a seamless flow of thoughts; study room is a place that needs careful planning to let the creative juices flow. Immersed in a sea of books to regain long lost scholarly ambitions, a perfectly designed study place goes a long way in ensuring the right mood for concentration as well as doubling up as a space to unwind-rewind. Be it the lighting, the colour of the walls, furniture design and its placement or the ventilation of the room; all add to the ambience of the room transforming the learning process into an enjoyable one.

Abandoning unnecessary additional decoration, contemporary study room tends to follow a simple pattern; it is uncluttered with clean cut compositions and lays special emphasis on spatial variation of the excavation.

How to make your study room reflect your character?

Since each person's needs are not the same, study room designs carry different characteristics, yet there are few simple rules that one can follow while designing a workspace. Integrating style with functionality and trends that are in vogue can truly churn out a space that reflects your character. Chalking down your needs, talking to designers and following some simple steps could be your answer to creating a space where you can relax and peep into the inner self.

A riot of colours

The best colour options for the study room would be uplifting and warm tones. The colours falling in such a palette would be dark blue or green or any other shade which has a calming effect on the mind but is not too bright or dull. Try avoiding colours like light blue or red. As they can get too bright and may cause excitement in the mind thus causing distraction.

Enamel paints along with wooden flooring and book cabinets provide the room with a classic look and are also pleasing to the eye.

A whiff of fresh air

The room should be well ventilated and have enough lighting. According to the available space and possibility, you should try to have the option for as much natural lighting as possible. The window also gets a breath of fresh air that is needed for relaxing in the space. If it's not possible to have a window then one should try to at least have a ventilator to maintain the flow of fresh air.

Other than the natural lighting there should be several options for artificial and mood lighting also. Artificial lighting provides a huge range of options for your multiple needs and moods at the flick of a button. To avoid strain on eyes, make use of suitable light that comes from behind computer monitor/screen. For pleasant reading and easier concentration, reading lamps must have proper quality and quantity of illumination.

Recessed lighting is another option for illuminating the entire space and to provide it a calming feel. It increases amount of lighting and provides illumination to whole study room. The lighting should be placed carefully so that it could highlight complete workspace.

Trendy accessories

Bookshelves provide storage for invaluable books as well as enhance the look of study room. These are essential articles of furniture for study room and maintain the quality of books for years. The most conventional book cases available are the wooden ones. They provide warmth to the room and also functional.

Nowadays newer options which look equally classy are available in the form of glass and wrought iron book cases and furniture. These are stylish and also save space along with adding to the décor of the study room.

Reclining comfort

Again depending on the space you can invest in a combination of furniture which is both practical and comfortable. Comfortable furniture allows you to make a well thought out scheme your thoughts to flow uninterruptedly. For the work station or your laptop/desktop you would need a table and straight back chair along with a good lamp. Along with that it would be smart to invest in a comfortable recliner or a couch that could provide you with space to relax and read.

In the fast whirling modern day life with an overflow of information and knowledge, there is a dire need to create a space where you can relax and listen to yourself. A study room could be that space where you can lie down and forget the dull day you had or could pick a book and enter another world altogether. And if it is that important concept note or presentation that you want to work on, this is where your creative juices will flow. So it's time you went ahead and created an oasis of creativity for yourself within your house!

— The writer is Director Studio+i

Chinese speed record

A Chinese company has achieved a unique engineering feat of taking only 15 days to build a pre-fabricated 30-storey building in Changsha, the capital of Hunan Province. The Broad Sustainable Building's foundation was laid ahead of time, while building itself was largely factory manufactured.

Once the pieces were shipped to the site, all that was left was for construction workers to put it all together in record time.

According to the Broad Sustainable Building's website, the building was 93 per cent factory made, a process which they say eliminates risks associated with design and construction quality, budget and construction delays, ABC News reports.

The Broad Sustainable Building has attempted projects like this before, building a 15-storey hotel in just a week as well as a six-storey pavilion in less than a day. — ANI

Industry Reactions: Mavens’ view

The Budget has no real measure for the real estate sector as most of the industry expectations have not been met. The most important demand across all real estate companies that of an industry status being assigned to the sector has been long pending and the demand of increase in the limit on tax deduction available on home loans interest also remains unanswered. The Government’s initiative to make affordable housing available to a larger section of society has only been met partially. Initiatives such as external commercial borrowing for the affordable and low-cost housing segment will help the sector to tap long-term funds and help ease the liquidity in the sector. Also the measures to increase funding for highways and other infrastructure will help put more territories on the real estate map.
— Brotin Banerjee, MD & CEO, Tata Housing

Infrastructure has taken a centre stage yet again in the reforms in the Union Budget 2012-2013. The steps to increase funding for roads, highways and other infrastructure will surely add more terrain on the Indian realty map taking tier 2 and tier 3 cities on new growth trajectory. The 1 per cent tax subvention for home loans of up to Rs 15 lakh on homes costing up to Rs 25 lakh will prove beneficial for developers in the category of residential sector. Exempting proceeds from the sale of a residential property from Capital Gains tax if they are invested in equity or equipment of an SME definitely provides home owners with more re-investment options. Companies engaged in infrastructure and affordable housing are in for some heightened activities in the near future as the government opens up funding options for such companies.
— Ravi Saund, COO, CHD Developers Ltd

The FM has done little to address the woes being faced by this very important sector of economy. This sector has been facing tumult lately due to rising interest and input costs and un-availability of funds. However, the Budget has not really met the expectations of builders and buyers, instead of providing any relief, the the service tax has been hiked, which together with increase in excise duty, will further push up the property prices, thereby dampening demand.

The Budget also does not hold much optimism and hope with high home loan rates contributing considerably to the slowdown in housing demand. Further, not much attention has been paid to high property prices, liquidity crunch, costly debts, muted foreign capital inflows, increasing inflation coupled with low business sentiment.

The marginal increase in income tax limit and additional burden of service tax and excise duty will bring down disposable and investable income, which will prove to be a setback to demand thus dampening the spirit of home buyers.
— Sanyam Dudeja, COO Punjab, Taneja Developer and Infrastructure Ltd

Demand for affordable housing will remain intact and it might increase, as low-cost housing loans up to Rs 15 lakh that were eligible for 1 per cent interest subsidy has been retained.

This year people might see a smooth market for houses that will not exceed the cost of Rs 25 lakh.
—Sanjay Rastogi, Director, Saviour Builders Pvt. Ltd

Though there are some provisions to help low-cost housing and preferential rate of interest for loans up to Rs 15 lakh for the houses priced less than Rs 25 lakh, the 1 per cent rate preference will not be very helpful to a house buyer. As it is low-cost housing can't succeed unless land is provided by the state at cheaper rates. This provision will not take the sector very far. Increase in cost of construction may even mean builders compromising on quality to reduce the quality of construction to meet the cost targets.
— Surinder Chopra, M.D. SCSL Buildwell Pvt Ltd

The service tax increase is actually a bad news for builders and developers because it will increase the price and the various input cost that go into the designing and building of homes for customers. Also already the builders and developers are in desperate need of liquidity and therefore looking forward to increase sales over the next few months for them to help them in their cash flow situation. This increase which may impact 3% - 5% change in the cost of properties they sell to their buyers will not be good news as it will slowdown the amount of units that are sold and it will question the affordability of new homes for customers once again coupled with increased input prices. This service tax hike means that builders can look forward to having to pass on up to 5 % price hike to the end buyer which of course will cause negative sentiment and slowdown sales.
— Samarjit Singh, MD Indiahomes

Though the Budget hardly had anything substantial for real estate, there are certain things that may help in creating a positive sentiment in the sector. The 1 per cent interest subvention for home loans up to Rs 15 lakh has been continued and is a relief for the buyers of LIG segment. Developers who will come up with projects this segment are likely to see a constant flow of buyers. Some of the areas that might benefit from this step are NH 58, NH 24, and certain sectors of Noida and Greater Noida. The increase in service tax and likely increase prices of construction material can be harmful for the affordable housing segment.
— Manoj Gaur, MD, Gaursons India Ltd

It is a disappointing Budget for the middle-class home buyer. We had made numerous representations to the ministry to bring down the cost of loans. Nothing has been done on that front. Instead the industry has been left to grapple with even higher rates of service tax and excise duty. All these will result an increase in cost of construction by Rs 50 to 100 per sq ft which will ultimately be passed on to the customer. We had also hoped that some sort of tax breaks would be given for EWS and LIG housing on the lines of the erstwhile 80 (I) B. However, nothing has happened.
— Pankaj Bajaj, Pres ident, CREDAI NCR

The Budget did not provide the, hoped for, necessary impetus for the real estate sector. While the emphasis was on infrastructure development, the introduction of TDS on sale of immovable properties, enhancement of service tax to 12 per cent and no enhancement of tax breaks for home buyers are negatives for the sector. Permitting ECB for affordable housing is the only welcome move.
— Amit Gupta, MD, Orris Infrastructure Private Limited

launch pad
Commercial space at TDI City, Mohali

With a view to provide customers a pedestrian friendly retail shopping experience around their residential projects, Taneja Developers & Infrastructures Ltd. (TDI), has come up with independent commercial booths in 'The Arcade' at TDI City, in Sector 118, Mohali. The Arcade is part of 300-acre integrated township comprising commercial booths designed to offer an optimal platform for target customers for a wide range of retail businesses. Sharing the details of the project Sanyam Dudeja, COO-Punjab, TDI Ltd. said, "The Arcade has 28 exclusive built-up units which are well planned and ready for possession. It is an excellent option for retailers who cater to the useful daily needs of the customers. These units are well suited for fast food joints, eateries, confectionary, pharmacy, ATMs etc. The units are centrally located in and around 1000 acres of residential development area."

Savitry Greens-II launched

Tricity-based N.K Sharma Group recently launched Savitry Greens-II housing project on the Gazipur road on Ambala-Chandigarh highway. The 25-acre project will have two, three, four and five BHK apartments. The group has around 12 different projects in and around Zirakpur with 99% occupancy. These include Defence colony, Sunrise complex, Savitry Enclave, Savitry apartments, Savitry Independent Duplex and Savitry Towers-I.

Pitching for privacy

SARE Homes (South Asian Real Estate), recently launched Petioles privacy apartments with Gurgaon's first luxury private Sky Deck in Sector 92. Developed on a 48-acre integrated township, Petioles consists of 4 BHK and 4 BHK + servant room apartments in 2,040 - 2,226 sq. ft area. As per SARE spokesperson each floor will have just three apartments designed with a view to offer maximum privacy. The apartment buyers will also have access to Gurgaon's first luxury private 'Sky Deck' consisting of a viewing deck, yoga and meditation zone, viewing deck, water wall and putting green. The apartments have been priced at Rs 75.4 lakh onwards. Elaborating on Petioles, Vineet Relia, Chief Operating Officer, SARE Homes explained, "Petioles is tailored to meet the needs of the customers with world-class amenities including lifestyle, sky deck , education, health care, entertainment and professional facilities management. 

Tax Tips
What is the time limit for purchasing tax-saving bonds?
S. C. Vasudeva

Q.I bought a plot in March, 2005 in an un-approved area near Faridabad. As the registry of plots in this area was banned, a GPA was conferred in my name by the owner against a payment of Rs 1 lakh paid by me through demand draft. I sold the said plot in January,. 2012 for Rs 16.5 lakh, and I have conferred the GPA further in the name of the buyer. The payment (Rs 16.5 lakh) has been deposited in my account through a cheque.

Kindly tell me how much capital gain has accrued in this transaction. In case, I want to invest the capital gain in three-year bonds then till when can I make the investment? If there is any other way in which I can reduce my tax liability then please mention that also. — dinesh bansal

A.The plot acquired by you on the basis of GPA in March, 2005 and sold in January, 2012 for Rs. 16.5 lakh would be considered a "long-term capital asset", and therefore the gain arising on the sale thereof would be taxable as long-term capital gain @ 20 per cent plus education cess of 3 per cent thereon. The amount of capital gain would work out at Rs 14,86,458 by deducting the indexed cost of Rs 1,63,542 from the sale price of Rs 16.5 lakh. You can save the tax payable on such long-term capital gain by investing the amount in capital gain tax-saving bonds. These bonds have to be purchased within six months of the date of sale of plot.

You can also save the tax by utilising the amount of net consideration i.e. Rs 16.5 lakh for the purchase or construction of a residential house. The purchase of a residential house should be effected within two years after the date of sale of the plot. The construction can be carried out within three years after the date of sale of the plot. So much of the amount out of Rs 16.5 lakh as is not utilised towards the purchase or construction of a residential house before the due date of filing the tax return for the financial year 2011-12 should be deposited in bank account under capital gain scheme. The amount so deposited can be utilised for the purchase or construction of a residential house within the aforesaid period.

Repaying loan won't help save capital gains tax

Q.I had purchased a residential flat from Improvement Trust for Rs 2.9 lakh in 1996 by availing a home loan from a bank. The loan has since been adjusted. Now I have purchased a residential plot for Rs10.8 lakh from my own sources. I propose to construct a house on this plot by taking a home loan of Rs 23 lakh from a bank. After completion of construction of the new house, I propose to sell the flat for around Rs 20 lakh approximately.

What will be long-term capital gain tax liability from the sale of the flat? I am given to understand that there will be no capital gain tax liability if the sale proceeds are deposited in the capital gain account and are utilised for the construction of a house within three years.

I propose to deposit the sale proceeds in the home loan account to reduce my liability. Please clarify whether the above clause will be applicable in case the sale proceeds of flat are deposited in the home loan account availed for the construction of a new house. Or else advise me how the long-term capital gain tax liability can be avoided? — jagdev leel

A.The amount of long-term capital gain on the sale of flat would work out at Rs 12,53,607 after taking into account the indexed cost of Rs 7,46,393 of the residential flat. You will be liable to pay tax on such long-term capital gain @ 20 per cent plus education cess of 3 per cent thereon. This would work out at Rs 2,58,243.

The amount of capital gain can be utilised for purchase or construction of a residential house. The construction has to be effected within three years after the date of sale of the residential flat whereas the purchase has to be made within one year before or two years after the date of sale. The requirement of deposit in a bank under capital gain scheme account is applicable in respect of the amount which is not appropriated towards such purchase or construction before the due date of filing the tax return in respect of the year in which the amount of long-term capital gain arose. Your assumption that the tax would not be chargeable on long-term capital gain in case the same is deposited in bank under capital gain scheme is, therefore, not correct.

You would not be able to claim the exemption from taxability of such long-term capital gain in case the same is utilised towards the repayment of your home loan.

As pointed out in the above paragraph, the exemption can be availed only if the amount of capital gain is utilised for the purchase or construction of a residential house within the specified period.

Another avenue for saving the amount of tax on long-term capital gain is by utilising the same for the purchase of capital gain tax saving bonds. These are required to be purchased within six months of the date of sale of capital asset i.e. residential flat in your case.

How will my tax liability be calculated?

Q.I and my wife jointly purchased a constructed house in November 2010, by raising a loan of Rs 25 lakh. We renovated this house and then shifted in it in December 2011. My spouse is a housewife and not likely to claim any exemption on interest paid to the banker on this loan. I am working with a public limited company. From April to November 2011, we stayed in company-provided leased accommodation. In December 2011, we leased our own house to the company for our own stay. During this period I have not received any HRA, for which I am otherwise entitled.

In such a situation how will my tax liability be calculated?

n Whether I will get full exemption of Rs 1.5 lakh of interest paid from April 2011 to March 2012 or not?

n Whether 15 per cent of my salary or actual lease amount, whichever is less shall be added to the perquisite value.

c. Whether the rental income for December 2011 to March 2012 shall be added to my salary. — n.k. ahuja 

A.The following points should be noted for the purpose of filing your tax Return for the assessment year 2012-13.

n The perquisite value of the leased accommodation for the period April 2011 to November 2011 shall be added to your salary income in accordance with Income-Tax Rules 1962 (The Rules). I hope your employer has included the same for the purpose of computing the tax deductible at source from salary income.

n For the period December 2011 to March 2012, the perquisite value of the leased accommodation (which happens to be your own house) as per the Rules, would also be added to your salary income.

n The amount of rent received for the period December 2011 to March 2012, will be taxable under the head "Income from house property" against which you will be entitled to claim deduction for the amount of interest paid/payable for the period for which the house was ready for occupation. The amount of interest paid/payable for pre-construction period would be allowable in five equal installments beginning from the financial year 2011-12.

The total income so computed would be brought to tax at the applicable slab rate.

Is second mutation required?

Q.I purchased a plot in 1981 in a residential colony under Ambala Sadar Municipal Committee (Haryana). The sale deed was got properly registered on the basis of a general power of attorney (GPA). The revenue officials at that time told me that since the plot lay in the municipal limits, proper registration alone was sufficient. Subsequently, I built a house on the said plot. Now I want to sell the house. But revenue officials now say that the registration becomes void after nine years and the same cannot be used as a proof of legal ownership. Hence, a mutation (intkaal) and then jamabandi are must for that purpose. I have to get the mutation firstly in the name of the GPA holder and then in my name. The matter is more than 30 years old and the original GPA granter and holder are no longer alive. Please guide me whether mutation and jamabandi are required, and if so then what should I do and what is the process for getting mutation etc. done under such circumstances? — p. k. aggarwal

A.The information given in the query is not sufficient to give an advice with regard to the consequences indicated by you in the query. Further, it is not understood as to why the mutation will have to be done in the name of the GPA holder in the first instance though the sale deed has also been executed in your favour. One will also have look into the provisions of the Act under which the revenue officials have advised that the sale deed is not legally valid after nine years. This position exists in case of agricultural land but it has been indicated by you that the land is situated in a residential colony under the Ambala Sadar Municipal Committee which should be an approved residential area. You may, therefore, give the complete facts to enable me to give any response to the query raised by you.

Can I claim LTCG rebate?

Q.I had been allotted a residential plot by GMADA in 2009 in a draw of lots, for which the 'letter of intent' was issued in 2000, and for which the payment was to be made in installments. I have not yet paid the whole price of the plot. Now, I want to sell the said plot after expiry of three years, on a value higher than the purchase value and want to reinvest the entire consideration for buying another residential property. My question is whether I would be eligible for exemption of paying long-term capital gain tax on the same. 
— neharika dhar

A.On the basis of facts given in the query, you should be able to claim the exemption under Section 54F of the Act provided the entire amount of sale consideration is utilised for purchase of a residential house within a period of two years after the date of sale of the plot. Please note that so much of the amount as is not utilised for the purchase of a residential house before the due date of filing the tax return in respect of the year in which the capital gain arose, should be deposited in a bank in capital gain scheme account.

REALTY GUIDE
Is my AFNHB flat a good investment?
B K Sanghi

Q. I have bought a 1970 sq ft apartment (3BHK + servant/study room) from Air Force Naval Housing Board (AFNHB) at Jal Vayu Vihar, Sunny Enclave, Sector 125, Mohali. The project is located on a 20 acre plot on 100' road in Sunny Enclave Mega project of Bajwa Developers. It comprises 26 Blocks in G+13 configuration (my unit is on the eighth) with total of 1292 apartments.

I have the following questions:

n What is the status of 200' Kharar bypass from Dara Studio, Sector 56-A up to NH-95, NH-21 junction beyond Kharar?

n What is the status of international airport road starting from NH-21 opposite Main Entrance, Sunny Enclave to Sector 73/74?

n How do you see the future of the location and city as compared to the rest of North India?

n What in your view is the ideal time horizon to fetch maximum return from this investment (Project was launched in Aug./Sept. 2006, construction started in March 2008 and possession will be started from July 2012 and should be completed by March 2013?

n Is this a good investment (the apartment will cost me Rs 41,61,000, basement parking Rs 1,70,000 and open parking Rs 80,000, plus Stamp Duty)? — a.s. dhaliwal

A.Your queries are replied hereunder:

n The said bypass is still under construction and it will take a few years to be completed. Keeping in view the large number of vehicles passing through the area, the Punjab Government is favourably inclined to the project.

n The international airport will take some more years to be completed with various stakeholders still not agreeing on certain points. However, the road in all certainty will become a reality as the airport will mean increased traffic from Punjab side.

n Being in a mega housing project and in close proximity to the tricity, this would be one of the prime properties in north India in the years to come.

n The ideal time frame to fetch maximum from the said property would be 5-10 years. In this time span, the Chandigarh Metro would also be extended to the peripheral towns providing faster connectivity to these to the tricity. Since the rates in the tricity would skyrocket after five years, the small towns around the tricity would be much in demand.

n Though slightly costy at present, the amenities and the project’s location in the developed mega housing project makes it a good investment.

How can a second buyer register flat?

Q. Mr A is an allotee of a flat and sells to Mr. B on power of attorney (POA). Subsequently, I purchase this flat in 2006. The sale transactions are carried out as follows:

n Mr B enters into a 'Sale Agreement' with me.

n I make the payment to him through cheque.

n Mr A gives POA, Will and an affidavit to me in my name.

Now in 2012 the Conveyance Deed of the flat is going to be done (after six years) in the name of the original allotee (Mr A). He says that in order to avoid capital gains tax he would not get the registration done in my name and advises that I being POA holder can get it registered in anyone's name.

Alternatively, he says, that since his Sale Agreement is with Mr B, he will get it registered in the name of Mr B.

Please advise if I can get it registered in anyone's name without approaching Mr A and B?

What is the status of Mr B in this deal at present? — s.k. jain

A.First of all, in order to establish a clear title of your property you can make a Conveyance Deed of the flat in favour of Mr A (original allottee) through General Power of Attorney. Then further on basis of the Conveyance Deed and being POA holder you are competent to transfer the flat through sale deed in favour of anybody.

The status of Mr B in your case depends upon whether he has fulfilled all the terms and conditions of the agreement to sell, which was made six years ago. The agreement to sell is governed by provision of the Indian Contract Act, 1872 and the Transfer of Property Act, 1882.

Fire Capital to pump in Rs 400 cr in projects

New Delhi-based real estate private equity fund Fire Capital is planning to invest up to Rs 400 crore in the next financial year.

"We may invest in the range of Rs 200-400 crore in the next financial year in various real estate projects in tier-II cities," Fire Capital Chief Executive Om Chaudhry disclosed recently. He said the PE fund would focus on joint development deals in real estate projects for increasing returns on investment.

Fire Capital, which was established in 2004, raised its first fund of $121 million (around Rs 550 crore) in 2006, with an option to invest around $ 250 million (around Rs 1,125 crore) through the co-investment commitments from investors.

The PE fund invests in real estate properties in tier-II and tier-III cities with direct equity exposure in residential projects. So far, Fire Capital has taken exposure in cities like Indore, Nagpur, Jaipur and in projects located on the outskirts of Bangalore, among others.

Referring to fresh fund-raising plans in the next financial year, Chaudhry said that the PE fund was adequately capitalised for investments in the next financial year. — PTI