AREA WATCH: JALANDHAR
Stagnating & slow
n Slowdown contines to cast its shadow on Punjab real-estate
n NRI investors shy away from Doaba region
Varinder Singh

The global economic slowdown continues to cast its shadow on the already dull and sombre real-estate scenario in Punjab with hardly any NRI investor or major out-of-state builder daring to come forward and invest in new property projects in Punjab in general and in the Doaba region in particular. "The property market of Jalandhar and Doaba has been witnessing a complete standstill for the past three years," says Shital Vij, a local entrepreneur. Lets have a look at the reasons that have lead to this state.

Political limbo

Assembly polls were a major reason for stagnation in the property market in the state over the past few months as investors looking to make big bucks preferred to wait till a new government was in place. Before elections a lot of people in this business had "predicted" that the realty scene would turn buoyant if the Congress came to power in the state.

Only two big projects - one by the DLF group and the other by the Eldeco were planned on the outskirts of Jalandhar ahead of the Assembly elections. Both, according to experts, are getting a lukewarm response from prospective buyers.

NRIs: Missing in action

Another factor that has had a major impact on the realty market is the conspicuous absence of NRI money in Doaba property market. The large number of cash-rich NRIs of the region have always fuelled the growth of the realty sector here.

"It is for the first time in the past several decades that hardly any NRI investor is around in the market. Global economic recession that has gripped North America, Europe and other countries has forced NRIs to stick to foreign shores. They are so hard-pressed over there that it is difficult to spare money for investment in India, particularly in Punjab. This has surely filled the real-estate scene with chill," said real-estate expert and renowned Jalandhar-based businessman Bhupinder Makkar.

"Not only in Jalandhar, property scene in Ludhiana has also been stagnating for a couple of months," added Makkar.

Canada-based NRI and financial expert Harry Dhaliwal reiterates Makkar's point by saying that the earnings of NRI businessmen had shrunk and they did'nt want to take any risks. "Most of them have already suffered huge losses in different business here. So, now they are left with a diminished risk-taking capacity and moreover, now they want to strengthen their businesses abroad," he said.

Mohinder Singh, an NRI from Norway, who had purchased a hotel in Jalandhar, had to sell it at throwaway price about two years ago. "Since, there was hardly any growth here, I decided to stay away and concentrate on my work in Norway," he said.

The NRIs and big builders from Delhi region had sent their people to sniff the Punjab market before elections. "They had surveyed the market for launching of new housing and commercial projects but, their plans turned into smoke due to lack of interest from medium and small buyers and investors", says Anil, a local property consultant.

Collector Rate scare

Adding to the worries of industry insiders is the proposed hike of around 20 per cent in Collector Rate for registration of land. They fear that this move would only contribute to the decline in business. "In some areas, the Collector Rates are even higher than the market prices. For example, in Model Town in Jalandhar one can buy a plot for between Rs 7 and 20 lakh a marla but the Collector Rate remains the same irrespective of the actual price, so as a result a person paying Rs 20 lakh pays the same as a person paying Rs 7 lakh. "The government should conduct a fresh survey about current prices and revise the rates accordingly," says Makkar.

Silver lining

The silver lining to the dark clouds of stagnation hovering over the property market, however, is that the genuine buyer is still around and that queries have already started landing with project developers and property dealers.

With new government in place now, the investors can't afford to wait for another five years for a "favourable" political regime, and they have started moving ahead as they are not averse to the SAD-BJP government and its real estate policies.

"Whether it is the investor, end user or seller, all are sticking to the wait-and-watch policy. Though the high expecatations of people have died down but, fortunately, they have not turned negative about the trade at the moment. The SAD-BJP's zoning policy is already being hailed by people. People are thinking of future and not about the past," observed Ashwani Gupta, a Jalandhar-based financial expert and director of the State Bank of Patiala.

Insiders say that staying of the genuine buyer in the market even in the face of global economic slowdown is in itself a positive sign for the trade. "No new project is being launched and there is no room for speculative transactions at the moment. There is no movement and the market is virtually at a standstill. But the only saving grace is that the genuine buyer particularly in the mid segment is still there," opined Anil.

Another positive aspect is that a major section of investors has started feeling that the SAD-BJP government will be completing its ongoing development projects as early as possible. So they have slowly started showing interest.

According to Makkar the somewhat upward trend being witnessed in case of properties falling in the periphery of Chandigarh had also generated some hope among traders and investors. "We feel that the same trend will be getting replicated here soon," he added.

But it is not going to be a smooth ride all the way as investor interest does not necessarily mean sales taking place. As Bhupinder Singh, a property dealer, says "Though the flow of queries by prospective buyers has increased a bit, very few deals are being made in reality. People come with their queries and leave. In fact, buyers want a cheap deal and the seller keeps sticking to old prices and is not ready to give in easily and this often leads to a status-quo as far as transactions are concerned," he added.

So it remains to be seen how soon the realty sector in Doaba region shakes of the dark shadow of stagnation and booms once again. 

Fact sheet

nn No NRI money flow in Punjab this time.

n People feel the hike in Collector Rates of lands will only make it difficult for them to own a home.

n Only queries, almost no buyers in Doaba region.

n Experts see a silver-lining as investors will eventually come forward.

fine fabrics
Decor trends nutan sehgal ...
Go for a Fabulous look
Thanks to a wide range of exquisite bedspreads, cushion covers and upholstery available in market, you can give a colourful makeover to your home

Are you bored of the unexciting upholstery on your sofa? Do you need to cover your chairs and sofas with sheets to hide the general ugliness of the fabric. Do not press the panic button. With the changing fabric scene, the old cliché 'home sweet home' may yet be true.

The furnishing scene is fast changing. One look at the swanky stores and the picture is clear. The fabrics, designs and prints can give the uninitiated a pleasant surprise. The demand for homespun fabrics, traditional weaves, prints and embroideries is sweeping Indian markets.

The turn about in the mindset of Indian back in the 1980s when ethnic fabrics in Ikat, woven cottons, printed khadis and other natural dyes and colours from weavers across the country came into vogue.

Special weaves from Andhra Pradesh, Kerala, Uttar Pradesh, Haryana, Gujarat and Rajasthan were turned into contemporary art by modern day designers.

Splash of colour

Indian homes got a splash of colour from the resplendent bedspreads, linens, cushion covers, upholstery and curtain cloth. Fashion designers further revived the richness of the traditional arts of zardozi, jamdani, gadwal and chanderi, making a very Indian handloom fashion statement.

Engaging themselves with the traditional weavers, they redesigned conventional motifs, colours and prints on a wider range of fabrics, more appropriate and acceptable to the new generation.

A common question asked is how does one discriminate between the furnishings in plush outlets and those found in their poorer cousins? "The rule is simple," says Neeru Kumar an interior designer who has set up her own weaving unit in Gurgaon. She says if you opt for soft furnishings in bright colours it will make your living room suddenly come alive.

"The furnishing market is at its colourful best now with world class fabrics and designs available from all over," says Anirudh Bhasin, another interior decorator. He adds that bedsheets, curtains, dhurries, rugs, cushion covers, table cloths, mats and sofa covers are all wearing a new sophisticated look.

A brighter place

"An all-time favourite with the customers are fabrics imported from Singapore and Malaysia as they fit well with Indian homes," comments Bhasin. Soft furnishings in deep blues and purples, greens and browns are dominating the scene, while warm colours like rich reds, tangy oranges and lime greens or even sunny yellows are vibrant and exciting.

Colours can be classified into bright, soft, subtle, warm, cool, bold and even dramatic. They can make or break a look and either highlight or ruin the ambience of your house.

"Your home must be full of colours you are comfortable with. If you are a black and white personality, you won't be happy in pastels and vice versa," says Neeru Kumar. What one must keep in mind also is that besides colours being a rather personal thing, much depends on the natural light coming into the room. The climate you live in is very important, too.

Finally, always remember the people (and the personalities) who will be living with those colours. Everyone must feel at home.

Consider the plus points of choosing from the brighter end of the spectrum. For one, your home would always look cheerful, welcoming and yet soothing. Moreover, bright, happy colours increase efficiency and give the home a vibrant, exciting and sophisticated aura. They also create an illusion of space and warmth.

So, spread some sunshine and liven up your space. Make bright, cheerful colours work for you with resplendent furnishings. — NF

CO-ORDINATING CODE

n Use the dominant colour as a base and on a larger surface; throw in the co-ordinated colours in smaller areas.

n Try not to create visual cacophony! Don't let the colours intrude on one another. It's the subtle interplay that makes them visually striking.

n Your furniture must coordinate with the colours. You just cannot have period or antique furniture upholstered in bright pink and green fabric.

n The paint you've used on the walls must also complement or offset the colours. Cream, off-white and white walls work best with bright furnishings.

n The lighting must be well-planned. Remember while bulbs add a lovely glow to the colours, tube lights give the room a cool touch.

n Colours have a great impact on moods. Use your instincts when you work with bright colours; that's the best guide you'll find.

Ground Realty
Plan in advance for perfect slab concrete
Jagvir Goyal ...

Laying of slab concrete is one activity that keeps the house owner in a state of high alertness. Palpitation increases before the laying of slab and a sigh of relief is heaved after its trouble-free completion. Prayers are often rendered before the commencement of concrete work. Successful laying of slab, however, depends upon:

n Proper planning and preparation for laying of slab.

n Strict vigil and checks during the laying of slab.

Let us first consider the planning and preparation part.

The slab: Intermediate RCC slabs in a multi-storey building are called floor slabs and the top floor slab is called roof slab. Thus the slab may be ground floor slab, first floor slab, second floor slab and so on. In common language, it is often referred to as lanter.

Concrete planning: Laying of a slab requires preparation of proper drawing for it by the architect's engineer showing the location of various beams, slab outline and the steel to be embedded in the beams and the slab. Dimensions of the beams are clearly shown. The beams should form a complete grid to cover the slab area. The slab thickness is clearly shown and it may be uniform or varying. In large span portions like the lobby, sometimes, higher thickness of slab is provided. The total quantity of concrete to be laid is worked out from this drawing.

Steel planning: The slab drawing shows the steel to be provided in the beams and the slab. Each beam will have steel bars of different diameters at the bottom and top along with stirrups or rings along the length of beams. The steel in slab with cranks at walls or beams and in cantilever portions will be shown. Total length of each diameter of steel bars should be worked out from this drawing.

Electrical conduit planning: The architect will prepare another drawing showing the location of fan hook boxes, light boxes, down points, conduits for electric wires, conduits for AC cables, TV set box cables and telephone cables. The size of conduits will also be mentioned in the drawing. The electrical items to be embedded in slab should be worked out from this drawing.

Plumbing part planning:

Certain pipes like soil waste pipes, waste water pipes, rain water pipes will need to be extended before the laying of slab. Certain plumbing specials like floor traps and water closet traps and pipes may need to be placed in position and embedded. Sleeves to pass the water supply pipes instead of drilling holes in the slab later on also need to be planned. The architect will issue another drawing showing all these details. The plumbing items to be placed in position before laying of slab should be worked out from this drawing.

Arrange steel: First item to be arranged for slab concreting is reinforcement steel. Total length of each diameter of steel has already been worked out. Normally, 20 mm, 16 mm, 12 mm, 10 mm and 8 mm diameter steel is used in beams and slab. These bars are supplied in 12 m lengths. So work out the number of bars required of each diameter and ask the steel supplier to send the same to site. Choose a trusted brand. Don't forget to order for supply of binding wire along with the steel. Good quality binding wire costs Rs 70 per kg and approximate requirement of binding wire is 6 kg per quintal of steel. A slab of 2,000 sq ft area will require about 20 quintals of steel and 12 kg of binding wire.

Arrange aggregates: While the bar binders are busy in cutting, bending and laying of steel on the shuttering fixed in position by the labor contractor, work out the quantity of sand and coarse aggregate required for the slab. The quantity of concrete has already been worked out. Order for an equal quantity of coarse aggregate, commonly known as 'bajri'. For a slab of 2,000 sq. ft area, the approximate quantity of stone aggregate required is 1,000 cubic feet. Arrange sand also which should be half the quantity of stone aggregate. Look for coarse sand, free of any dirt or earth. Pathankot sand and stone aggregates are good for slab concrete.

Arrange cement: Work out the quantity of cement required for the slab. The architect will suggest a suitable mix of concrete to you. A 2,000 sq. ft area slab will require about 190 bags of cement. Thus, order for 200 bags of cement. Set the timing of its supply so that it is unloaded directly at site for immediate use instead of first unloading it into site store and later taking it out. Prefer to use OPC, 43 grade cement in slab and its beams. Look for fresh and undamaged bags.

Arrange electrical items:

Electrical conduits of different diameters and other items like fan hook boxes, light boxes etc have already been worked out. Arrange these well in time to allow the electrician to lay these in position when the slab steel is being laid.

Arrange plumbing items: Like electrical items, all plumbing items need to be fixed before the start of concreting. Arrange all these well in advance as the plumber may take his time in fixing these.

Water arrangement: See that your water supply source at site is in working order. Look for a standby source. In addition to the 200 litre water drum kept near the mixer, a couple of additional drums may be arranged and kept filled with water for use in case of failure of water supply and till the arrangement of alternative source. Concrete for a 2,000 sq. ft area slab will require about 3,000 litres of water.

Arrange for tarpaulins:

Though the weather may be clear on the day of concreting, arrange tarpaulins to cover the lot of cement and the laid portion of concrete in case there happens a sudden downpour. In rainfall, laid concrete loses cement quickly, leaving behind a mass of sand and coarse aggregate. This has to be strictly avoided.

Arrange for jute bags: Normally, inverted beams are provided in the slab and a portion of these beams projects above the slab surface. On the next day of concreting, a water pond is created over the laid slab for its curing. However, the projected portion of beams remains uncured. A worker may keep applying water to the beams but it evaporates quickly. The best method for curing of concrete in projected portion of beams is to cover them with jute bags and then to sprinkle water on the bags. Jute bags retain water for a longer period and proper curing of concrete in beams gets done.

Lighting arrangements:

The concreting work may continue till late in the evening so make proper arrangement for the availability of sufficient light in the mixer and slab area. In case lighting arrangements are not possible, some petro-max lamps should be arranged on rent and kept ready for use.

Contractor's arrangements: In addition to the staging and shuttering for the slab, the labour contractor arranges the mixers, vibrators, extra needles of vibrator and other tools and tackles to mix concrete and its delivery to the slab area. Arrangements done by him should be reviewed by the house owner to ensure that everything is fine and laying of slab concrete can be started.

(This column is published fortnightly)

pick of the week
Strength and speed

In today's fast paced world, where speed and time is of the essence, building projects on time is imperative to sustain business growth. The use of prefabricated structures is now becoming increasingly commonplace. After all, following the rise of instant fast food, instant messaging, and many other things instant, it's not surprising that the need of the hour is for constructing instant buildings.

Building solutions company Everest Industries Limited has succesfully executed a project for leadng real estate major Ansal API in a record time of 90 days. Everest completed the Ansal Institute of Management in Lucknow; sprawled over 60,000 sq ft, comprising three large modules with over 40 rooms in 90 days by reducing the construction time by around 1/3 rd of the time taken for traditional construction. This feat was achieved through the use of Smart Steel Technology.

Smart steel is a technological innovation that can move the conventional construction industry to the next level. Commercial buildings, site offices, restaurants, roof top extensions are made from factory-made components that are shipped and assembled on site. It offers a great deal of flexibility and custom computer-aided designing. Buildings can be manufactured based on customer specifications. Since these buildings are manufactured inside the plant, stringent quality controls are in place and this helps maintain the consistency of the construction.

Smart steel buildings are 100 per cent customised and are resistant to moisture, adverse weather conditions, earthquakes, termites and fire. Low maintenance costs, versatile use and ease of expansion are reasons why these buildings are preferred.

Ansal API project has approximately 5,350 sq m of floor area comprising three modules and 43 rooms of 8.5 m with 2.5 m wide corridors. There are two rooms of 14m x 14m x 4.5m on the two ends of the Module 3 and one each on the module 1 and 2 as elevational feature to add to the aesthetics.

The challenge was to complete the entire project in less than three months as the academic session is to commence in July. The design of the building was kept simple and straight line, as speed and time was the essence. The company designed, manufactured, and installed the smart steel structure as per the institue's specifications. On an average 50 workers were engaged by two different installation teams to achieve the goal by working 10 hours per day. — TNS

realty bite
Rahejas aim high

Raheja Developers will invest about Rs 300 crore in a group housing project at Dharuhera in Haryana over the next 4-5 years.

The project, Oma, will house 640 apartments and will be one of the tallest buildings in the area with 40 storeys, the company claimed.

"This is a very important project for us that will have all the luxury elements. We have already started construction and will invest about Rs 300 crore to develop it," Raheja Developers Chairman and MD Navin M. Raheja said on the sidelines of an Assocham event on green buildings in Delhi recently.

The company will take slightly longer duration to complete the project than in usual cases due to its height and will hand over the flats in the next 4-5 years, he added.

"We are targeting foreign nationals working in different MNCs, especially those in the auto firms, located in the industrial areas nearby. We are offering a wide range of flats from 1-BHK to 6-BHK," Raheja said, adding the total number of flats will be 640, including service apartments.

The sizes of the flats will vary between 550 sq ft and 4,500 sq ft. The company will offer the apartments at a price ranging from Rs 17.5 lakh to over Rs 1 crore, he said. Last year, Raheja Developers had announced its plans to build the tallest housing project 'Raheja Phoenix', comprising a 54-storey tower with a helipad, in the heart of the National Capital for about Rs 300 crore.

The company had also formed a joint venture with Dubai-based Arabtec Construction to build real estate projects in India and awarded contracts worth Rs 1,020 crore to the JV firm for three housing projects.— PTI 

guest column
Make the right choice

Choosing a home is not a cakewalk as a number of doubts and apprehensions dog a prospective buyer. Here are some tips to help you choose your home wisely. Shortlist your favorite properties based on these concepts and you would find the entire process much less confounding:

Aspirations, lifestyle

While thou may want the moon, think clearly and decide what kind of lifestyle you and your family would be comfortable with. Villas, apartments, individual home, an executive floor, all entail a particular type of lifestyle. Deciding between living in the inner city and a suburb is also a lifestyle decision. If you like a quiet laid back life, choose a suburb. If you like being in the hub of things and having everything nearby, but are willing to settle for less space and more noise, the city will work fine for you. It will also help to visualize an area ten years into future and identify a place that will suit your needs till then.

Study the market

It is important to do one's own research on the property market while buying a home. A lot of people take property decisions based on the advice of someone they know. While trust is a good thing, this can also land you in trouble. Start looking at property supplements and trade magazines. Visit brokers, look at websites, visit exhibitions, then shortlist properties based on your requirements and budget.

Location is important

One always wants a place that is close to work, kids' school, shopping centre and other conveniences. Also figure out how good the access is, what the neighbouring areas are, the quality of infrastructure. Find out what's going to come up in an area in the future, to whatever extent has already been planned. A visit to local brokers and a contact with the planning department of the local area might yield some results.

Study the layout

Study the layout of the apartment well. Making changes to an apartment is possible, but it is time consuming and costly. First of all, see if there are enough rooms for your family. The same area can accommodate two large bedrooms or three smaller ones. What you need is dependent on the size of your family. Check on the size of the living, dining and kitchen. The sizes of the bedrooms should accommodate double beds easily. Check if there are provisions for electrical equipment. Storage is important. The flat should maximise the use of space. The rules are many, but whatever your taste, you need to ensure convenience and safety. For a child or elderly person, this could make the difference between comfort and fear. Use the sample flat to understand the layout, but sit down with an architect or interior designer to see what possibilities it has for remodeling in the future.

Finish and amenities

With apartment developers going all out to woo customers, you have a lot to choose from. Don't get taken in by all the jazz though. Figure out what amenities you would really use and whether they are there or not. Security mechanisms, power back-up, open areas and basic sports facilities would be essential, but beyond that it's up to you. Interior finishes is also a subjective area, but you need to remember that the sample flat is not necessarily what your apartment will look like. While Italian marble may sound very good in a specification list, you may discover that it is too slippery and smooth for your old father to walk on. Again, talk to a professional to understand what the finishes in the specification list mean and look like.

Background check

Once you have zeroed down on a development, it is important to look at the track record of the builder. Find out about the builder's last few projects. Visit them and study the finishes, speak to residents about the quality of construction, delivery time and maintenance arrangements.

Go through the right sources

Don't buy something only because you're getting a cheaper deal from someone. Beware of inexperienced or crooked brokers. Always go through a reliable source. If possible, strike a direct deal with the builder.

Sort out the legalities

Take time to study the fine print lest there are loopholes later. Make sure the property is registered and apartments will be registered on completion. Many developers follow a code of conduct that insists on transparency and ensures that the builder honors the agreement that is signed between the buyer and the builder. The code also insists that the developer clearly defines the terms mentioned in the agreement.  — Inputs by Surinder Chopra, CMD, SCSL Buildwell Pvt. Ltd.

FOR RENT
House rents jump in Delhi

A study by real estate portal 99acres.com has showed that rentals for the Delhi and NCR region have seen an appreciation in Q1-12 (Jan-March) over Q1-11. All localities in the Delhi-NCR region have witnessed rental value appreciation on an annual basis.

Commenting on the same Vineet Singh, Business Head, 99acres.com averred, "The residential rental values in Delhi are likely to show a further upward trend in the medium term. This is largely due to Delhi being a highly supply-constrained market where the demand for dwelling units outstrips the supply by a huge margin. The policy environment is currently not conducive to immediate increase in the supply and thus the demand pressure is likely to continue. Further, due to a high cost of units, the rental returns not very attractive".

A look at rents of a 3 BHK house in key localities of Delhi shows that the residential areas of Vikaspuri and Safdarjung had witnessed the maximum appreciation. Both these areas have witnessed 25 and 19 per cent rise in rentals in Q1-12 over Q1-11, respectively. Green Park, Kalkaji, Sarita Vihar and Mayur Vihar-I have witnessed 17, 14, 12 and 11 per cent rise in rental values, respectively over the same time period. IP Extension saw steady rental values, while Patparganj and East of Kailash saw approximately saw 10 per cent rise in rentals.

The NCR region has seen an appreciation of rental values across localities. Key localities of Noida like Sector 61, Sector 18, and Sector 82 have seen rentals escalating within the range of 8 to 18 per cent over a period of one year. Localities in the Ghaziabad region have also seen major rental value appreciation. Vaishali and Indrapuram saw 22 and 13 per cent rise in rentals in Q2-11 when compared to those in Q1-11.

Prime areas of Gurgaon like Palam Vihar, Golf Course Road, Vatika City, and DLF Phase 1 have seen 25, 24, 23 and 20 per cent rise in their rentals in Q2-11 as compared to Q1-12. — TNS

tax tips
S. C. Vasudeva email your queries to sc@scvasudeva.com ...

Which assets are exempted from Wealth Tax?

Q.In order to avoid paying the capital gains tax, can I invest the sale proceeds of agricultural land in urban area, in the joint names of my husband, two sons and their wives, in the following manner:

n Buying a big residential house, including land measuring 2-3 kanal, within one year of its sale, or Joint investment in the specified assets within six months, or Joint investment in the construction of a residential house within two years, or Investment in alteration/addition/renovation of the residential house, which is already in the joint names of my husband and two sons.

n In case I invest as above (jointly) before the end of the current financial year, can I invest the sale proceeds from the other half of the agricultural land in a similar manner in the next financial year also i.e. after April, 2012, especially in the purchase of a second residential house with land appurtenant thereto. What is the limit up to which no one is not required to pay wealth tax and which assets are exempted from wealth tax? Kindly advise. — Nidhi Kapoor 

A.I presume that the query raised by you is in respect of long-term capital gain. The reply given below is based on that presumption.

(a) The residential house should be purchased in the name of the person who was the owner of the agricultural land. The purchase of a residential house can be made within two years after the date of sale of agricultural land. Please note that the amount of net consideration will have to be utilised for purchasing a residential house. The net consideration has been defined to be the amount of consideration received or accruing for transfer of the capital asset, less expenditure, if any, incurred wholly and exclusively in connection with the transfer of the capital asset.

(b) Investment in the specified asset can also be made in the name of the owner of the agricultural land.

(c) Residential house will have to be constructed in the name of the owner of agricultural land.

(d) No exemption would be available in case the amount of net consideration is utilised for alteration/renovation of the residential house. Such exemption can only be claimed in case the amount is utilised for the construction of an independent additional floor within three years after the date of sale of the capital asset. I may add that the exemption can be claimed only if the residential house or additional floor is in the name of the owner of the agricultural land that has been or is being sold.

(e) The investment of the consideration accruing or received on the sale of other half of the agricultural land can be made towards the purchase or construction of a residential house provided the owner of the agricultural land is having one residential house at the time of transfer of the agricultural land. You may, therefore, keep this position in mind before taking action for making investment in the purchase or construction of a residential house. As stated above, the period allowed for the construction of a residential house is within three years after the date of sale of the capital asset. However, the purchase can be effected within one year before or within two years after the sale of the capital asset.

(f) The wealth tax would be chargeable in case the total net wealth of an assessee exceeds Rs 30 crore. The amount of wealth tax is payable at the rate of one per cent of the net wealth determined in accordance with the provisions of the Wealth Tax Act, 1957. The assets chargeable to wealth tax are:

(i) Any building or land appurtenant thereto whether used for residential or commercial purposes or for maintaining a guest house or otherwise, including a farm house situated within 25 km of the local limits of any Municipality, Municipal Corporation or a Cantonment Board; but excluding:

(1) 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 (proposed to be raised to Rs 10 lakh for assessment year 2013-14 and onwards by Finance Bill 2012),

(2) any residential house forming part of stock-in-trade,

(3) any house for commercial purposes (i.e. commercials property) which forms part of stock-in-trade,

(4) any house which is occupied by the assessee for the purposes of any business or profession carried on by him,

(5) any residential property that has been let-out for a minimum period of 300 days in the previous year, and

(6) any property in the nature of commercial establishments or complexes;

(ii) Motor cars, other than those used in assessee's hiring business or used as stock-in-trade;

(iii ) 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;

(iv) Yachts, boats and aircrafts, other than those used by the assessee for commercial purposes;

(v) Urban land, being land situated in any area within the jurisdiction of a Municipality or a Cantonment Board that has a population of not less than 10,000; or within 8 km of the local limits of such Municipality or a Cantonment Board, as the Central Government may notify.

However, urban land shall not include:

(1) land on which 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,

(2) 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

(3) any land held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him;

(vi) Cash in hand, in excess of Rs 50,000, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account.

It may be noted that one house or part of a house or a plot of land not exceeding 500 sq. m belonging to an individual or HUF is exempt without any monetary ceiling under Section 5 (vi) of the Wealth Tax Act, 1957.

Check legal points before selling allotment rights

Q.I was allotted an HIG flat by DDA in Dwarka, New Delhi, in a draw of lots held on April 18, 2011.The approximate cost of this flat is Rs 80 lakh (excluding registration and stamp duty). I am not in a financial condition to purchase this flat on my own. Can I take loan for the full amount from an investor or a buyer who wants to purchase this flat from me on premium.

According to DDA rules the title of the flat would be transferred only when a Conveyance Deed is executed in favour of the allottee and is registered in the office of Sub-Registrar.

n Will it be ok if I take the full amount in my account as loan from the buyer or should I quit?

n What are the other tax liabilities or formalities that I would have to complete in this case as I am governement. employee?

n What are the other options in this case?

— Samir Jindal

A.Your queries are replied hereunder:

n In case you want to retain the flat, it would be advisable to borrow money from a bank or any other financial institution that provides finance for the purchase of a residential house/flat. In case you want to sell your allotment right, then you can adopt the process suggested in the query. The premium received on sale of allotment right would be taxable as short-term capital gain, and the same would be added to your total income. Tax would be levied on such total income in accordance with the applicable slab rates.

n You should look into the application filed by you for the allotment of the flat and the letter of allotment to ascertain whether you can sell the right of allotment.

n The other option available is to borrow the amount for the purchase of the flat from a bank or any other financial institutions as suggested hereinabove. You will have to inform the relevant government authorities about the entire transaction i.e. the fact that the allotment of flat (giving full particulars) has been made in your name and the same has been sold which has resulted in short-term capital gain which has been tendered for taxation.

As suggested above the legality of the transaction must be ensured before selling the allotment right.

Calculate the fair value of house correctly

Q. I had purchased a plot and built a residential house on it in 1975. The total cost incurred at that time was around Rs 35,000-40,000.

In 1995 I built the second floor of this house at a cost of around Rs 50,000. I sold this house in December, 2011 for Rs 11 lakh.

Kindly clarify the following points:

n Now with the option to avail of the benefit of fair value as on March 31, 1981, how can I calculate the fair value of this house?

n Can I include the cost of building the second floor (Rs 50,000) in the total cost of the house. Do I need to furnish any evidence for this expenditure with my Return?

— Bharat Bhushan

A.n You should obtain an approved valuer's report for the purpose of availing the benefit of fair market value as on April 1, 1981. He will calculate the fair market value considering various factors such as the nature of construction, covered area of the house, area of the plot on which the house was constructed etc.

n The fair market value of the house as on April 1, 1981 would be computed by an approved valuer in respect of the floors which stood constructed as on that date.

 You need not enclose any supporting evidence with regard to the cost of construction of the second floor along with the Return of income. However, the evidence should be available and be shown to the tax authorities as and when so required.

How is holding period of long-term capital gain ascertained?

Q. I am an NRI. I am also OCI (overseas citizen of India) holder and have got a PAN card though I have not filed my tax Return so far. I do maintain my NRI status. My queries are as follows.

I own an apartment in Chandigarh, which I had inherited from my father. It is in my name now. I also own a commercial property, which I had bought in an open auction for Rs 22.15 lakh on December 11, 2004. I got possession of this property on January 11, 2005, and after construction got permission for occupation on July 12, 2006.

n If I sell this commercial property now, can I buy another house by using the net consideration of the sale proceeds without paying the capital gains tax, as I already own one apartment?

n Is the holding period of three years for LTCG counted from the date of auction, date of possession, date of occupancy after building is constructed or the date when the Conveyance or Lease deed is executed.

n If I sell this commercial property say for Rs 50 lakh now in 2012 what will be the capital gain. For the past seven years I have paid Rs 3,87,625 as ground rent for this being on lease and Rs 34320 as service tax and I have spent about Rs1.5 lakh for its construction.

n And if I follow the rules and do not owe anything in the form of tax to the government after the sale of the commercial property, then will it be mandatory for me to file IT Return? I had bought the property out of my remittances from abroad.

— K. J. Singh

A.Your queries are replied hereunder:

n You can purchase a residential house by investing the net consideration arising on the sale of the commercial property and claim benefit of exemption of capital gain under Section 54F of the Income-Tax Act 1961 (the Act). The Section permits that an assessee can claim exemption under the aforesaid Section even if he owns one residential house as on the date of sale of capital asset other than a residential house.

n The period of three years should be counted from the date of possession in case part or full consideration has been paid for the purchase of the property. In case possession has been obtained on the date of execution of the sale deed, the period should be counted from the date of execution of such deed.

n The amount of capital gain would be Rs 13,77,552. The computation is based on cost inflation index applicable for financial year 2011-12. In case the sale takes place in financial year 2012-13, cost inflation index would be higher for that year and the amount of capital gain would be lower than the aforesaid amount. Cost inflation index for financial year 2012-13 is yet to be announced by the Central Government.

(d) It would be advisable to file a tax Return in respect of the year in which the sale of the commercial property takes place and exemption is claimed under Section 54F of the Act.

loan zone
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How is maximum loan limit calculated?

Q.What are the criteria that banks use for calculating the maximum amount of home loan to be sanctioned to a borrower?

- Prince Gupta

A.The maximum amount of home loan to be sanctioned varies from lender to lender as each has own criteria to determine it. However, there are certain maximum loan amount restrictions that are published by individual lenders. These can give you a fairly good idea of the maximum loan amount that you can expect to get from a bank. This information will help you in calculating the maximum loan amount that you can expect based on your loan criteria and personal financial background such as income and assets.

Some examples of the conditions that lenders use as a basis for deciding the maximum loan amount eligibilty are as follows:

n Maximum loan amount as a multiple of your income: Some lenders may specify that you are eligible for a maximum loan of some multiple of your net monthly income (NMI), gross monthly income (GMI), net annual income (NAI) or gross annual income (GAI). For example, a lender may give a maximum loan of 60 times your NAI. This can also depend on whether the borrower is salaried or non-salaried, the age of the borrower, years left for retirement etc.

n Ratio rule: Some lenders may have a limit on the amount of money you pay each month for your loan (which is EMI) as a percentage of your Net Monthly Income (NMI) or Gross Monthly Income (GMI). This is basically represented by giving a maximum ratio of EMI/NMI or EMI/GMI allowed. These ratios can be anywhere between 30-70 per cent depending on a borrower's financial background, age etc. 

Can I get loan for buying a plot?

Q. I want to buy a plot. Is there any provision for getting a loan for this purpose?

— Shailly Bansal Mohali.

A.Yes, loan for land purchase is available as long as the land being purchased is going to be used for residential purposes only.

Many mortgage lenders, banks and NBFC offer this loan. You can get up to 85 per cent of the purchase amount based on your credit profile and paying capacity.

However, you get no tax breaks if you take a loan to buy a plot. But, if you take a loan for constructing a house on that plot, then you can get a tax break.

In such a case, the tax benefits are available on both portions of the loan- the one taken to purchase the plot and the one for constructing a house thereon.

Please note that the benefits under Section 80C and Section 24 can be availed only after the completion of the construction of the house.

Sunteck to cash in on demand in luxury segment

Real estate player Sunteck Realty plans to spend around Rs 5,400 crore  by 2020 to develop eight million sq ft of commercial and residential property. “We will be spending Rs 5,400 crore over the next seven-eight years to develop 18 million sq ft worth projects, mostly across the metropolis,” Sunteck Realty’s Vice-President for finance Sumesh Mishra said in Mumbai recently.

The firm is currently developing 27 projects of around 35 million sq ft, of this 18 million sq ft are exclusively developed by Sunteck, while the rest are under partnerships, he said.

He said the company had spent Rs 2,000 crore for acquiring 35 million sq ft land. “There is a demand in the luxury space. We see a huge potential for our business to grow in this scenario.

Therefore, over the next seven-eight years, we expect to generate nearly Rs 20,000 crore from our 18 million sq ft development.” The company will be completing five projects, including commercial and residential of around 2.5 million sq ft worth Rs 500 crore in this calendar year, he said.

Of these, two are commercial properties coming up in Goa and suburban Andheri in Mumbai. — PTI 

Price index delhi-ii
Price in Rs per sq yd

Dayanand Colony
9,000 to 9,200
Defence Colony
12,000 to 14,000
Deoli Gaon
4,500 to 5,000
Dilshad Colony
6,800 to 8,000
Dilshad Garden
7,000 to 8,000
Dr Mukerjee Nagar
8,000 to 9,000
Dwarka Modh
4,500 to 5,200
Dwarka (different sectors)
8,500 to 14,000
East of Kailash (main)
20,000 to 23,000
East of Kailash (inner areas)
10,000 to 14,000
Fateh Nagar
9,500 to 12,000
Gautam Nagar
13,000 to 15,000
Gazipur
8,500 to 11,000
Govindpura
3,800 to 4,500
Geetanjali Enclave
70,000 to 73,000

Note: Prices are indicative only and may vary according to the location of the plots and houses . Source: Nirmal Infrastructures, Mohali nirmalinfrastructures@yahoo.com