Ensure a fair deal
Geetu Vaid

Trust, transparency and timely delivery of projects are the three mainstays of the real estate business model and the onus of maintaining all these lies completely with the developer/builder as the buyer, especially a home buyer, who puts in his life’s savings and hard-earned money in a project is completely dependent on the builder for keeping his promises of giving timely delivery of homes as per the quality and other facilities mentioned in the original sale agreement.

But profit-hungry attitude fuelled by lax laws and regulation regime have made trust a very precarious ‘item’ in the realty mart today with fly-by-night developers dashing the dreams of buyers by scooting away with their money, or employing cost-cutting measures that lead to sub-standard fittings and ‘area stealing’ etc used to cheat a buyer of his right. The recent examples of the Director of Royale Empire group in the Peermucchalla area in Zirakpur, fleeing with over Rs 50 crore of customers and leaving the projects midway, and the question mark put by the court on the land acquisition process in the Kalka-Pinjore Urban Complex area have sent shockwaves in the tricity realty market. The Royal Empire fiasco has shattered the dreams of almost 800 buyers, says Vijay Arora, President of the Peermucchalla Builders Association, who is making efforts to bring all the investors and find out a way to complete the projects abandoned by the runaway builder. As the already shaky investor trust has received a jolt, the buyers are lost in the mists of confusion and don’t know how to deal in case of such problems. “Though such incidents are not very frequent, this is little solace for those who have lost money in such deals”, says Prateek Mittal, Executive Director of Sushma Group, that is developing around eight projects in the tricity’s periphery.

What should the buyers do?

“Exercising caution and being aware of one’s rights can go a long way in saving oneself from getting into ‘problematic’ deals”, says Mittal. The buyers are generally lured by huge advertisements in the newspapers and lofty promises and discount offers made by the developers and fail to gauge the ground realty properly. “In their enthusiasm to get a good (read cheaper) deal most of the buyers generally get into a trap. If a builder is offering less than the market price then there are chances of some hanky panky there and most of the projects that run into rough weather are the ones that project such unrealistic margins”, adds Mittal.

As a buyer it is always advisable to ascertain that the selling is end-user focused and not investor-oriented. Then the buyer should check out the market price and pay the genuine value.

Laying stress on checking the status of land for a project Sanyam Dudeja, Taneja Developers and Infrastructure Ltd., advises, “Precaution is needed from the initial stages of deciding on a property till the registration. Consideration of the legal status of the land is one of the first issues that buyers should address before confirming a property. Confirm that the land/project has a clear and marketable title. It is certainly mandatory to check the land and project approval details. The builder should provide the necessary documents to the buyer and the land ownership details. They should also provide a clear land title, which implies that the property is free of litigation and associated debt”.

Experts also advise about scanning the past record of the builder. “The buyers should do their due diligence regarding the past track record of the developer. They should visit the old projects of the developer and talk to his old customers”, says Pankaj Bajaj President, CREDAI, NCR, while adding that, “If a buyer still finds himself in an unfortunate situation where he has already invested money with a developer who changes his terms later on, then he can approach the CREDAI consumer redressal forum. CREDAI helps to resolve such disputes in a reasonable way through peer pressure and informal arbitration. As a last recourse, the customer can go to the Consumer Court and hope for justice”.

Will regulation help?

While the debate about the Real Estate Regulation Bill is raging in the corridors of power these days with the powerful builder lobby putting up a strong resistance to certain clauses, it is the common buyer’s interest that is more important as in a country like India buying a home is much more than just a monetary transaction as it is among the biggest lifetime investments for a common man.

So will real estate regulation solve the problems of fraud, delay etc?

“Only to a limited extent”, says Bajaj. And explaining the CREDAI’s stand on the Bill, he avers “the Bill is a duplication of many of the provisions which are already there in the Consumer Protection Act. “In fact, many of the provisions are draconian. But at the same time, it will be an effective deterrent for fly-by-night operators who run away with investors’ hard-earned money”.

While advocating the cause of self-regulation Bajaj adds that it is an effective method to standardise and regulate the working of the real estate developers. CREDAI has proposed a voluntarily Code of Conduct which all its members have embraced. The code talks about full upfront disclosure by the developer about his land title, project features, approval status, area calculations etc. “This transparency in itself takes care of more than half the problems. If the customer has any disputes he can go to the CREDAI redressal forum where historically more than 80% of the issues have been resolved”, he adds.

 While caution on the part of the buyer remains the catchphrase in any real estate deal, the reputation of the buyer and the team that is handling a particular project are also important factors that can save your hard earned money. So watch your step and tread cautiously in the slippery realty mart advise the industry mavens as well those who have had a bitter experience once.

tales of woe

SOUR DREAMS: Scene at a delayed project in Zirakpur Tribune photos Nitin Mittal

1 When 75-year-old Narrotam Sahni, a retired government officer based in Chandigarh, booked a flat in the tricity periphery two years back, he had no idea that he was not making a safe investment. A shaky Sensex and low rate of interest offered by the banks had made this pensioner invest his life’s saving in a housing project in the hope of getting good returns in the next three years when the project was likely to be finished. He even paid almost 40 per cent of the total cost of the flat, while his son (joint owner) took loan from bank to pay the rest of the amount. But after months of trepidation over the slow progress of construction work, missed deadlines and scores of visits to the developer’s office, he got a rude shock when he came to know that the developer had “vanished” after pocketing the money of several buyers like him. The law, no doubt, will take its course in this case but for the present Sahni has lost not only money and peace of mind but also trust in the whole system.

2 Rajan Shukla (name changed) booked a plot with a well-known group in Jaipur about five years back and was given the exact location and number of the plot at the time. But after a couple of years the developer failed to hand over the possession of the promised plot to him and told him to accept a plot at another location far away from the original one. Shukla has been running from pillar to post for nine months to get his money back from the developer as the new location is not suitable for him but he has a bleak chance of getting his money back, leave alone the issue of getting any interest on the amount of over Rs 18 lakh that has been with the developer for over four years now.

n Buyers face many such challenges in the property market as stepping into a dream house of their own is not a pleasant journey for many home buyers in our country. As many as 23 per cent projects delayed in the NCR region alone, little surprise then that consumer courts are brimming with cases relating to fraud and deficiency in service in real estate deals.

Fight for your right

Under what circumstances can you file a complaint against builder/developer with the consumer court?

First of all a buyer should let the builder know about the grievance and send a notice to him in writing. It should be sent by registered post or Under Postal Certificate.

In case the builder refuses to accept the notice, retain the proof of the notice i.e. a copy of the notice. The evidence of sending the notice is legitimate in the Consumer Court under Section 28A (3) of the Consumer Protection (Amendment) Act of 2002 and will be affirmed as the notice has been suitably served.

Any person can file a complaint against the builder, developer, housing with the consumer court under the following circumstances:

n Delivered a house that does not comply with the specifications agreed upon.

n Did not provide for free parking space within the compound / complex.

n Charged higher than agreed amount.

n Did not form co-operative housing society and handed it over to its members.

n Did not provide for water storage tank.

n Did not give a receipt against the paid amount.

n Did not provide for enough ventilation and light.

n Delivered a poor quality construction.

n Did not deliver the house within the agreed time limit. If time limit not mentioned, it is assumed that the construction will be finished within maximum of two years from the date of start of work.

n Did not give accounts for the expenses against which the builder has collected money, i.e. maintenance, electrical installations (transformer), etc.

Decor trends
Get floored in style 
Choosing a right type of floor to best fit your place is an important step in planning the installation of your new floor. Here are a few tips to maintain your choice of flooring
Sudhir Malesha ...

Vitrified flooring
Vitrified tiles are almost maintenance free, vitrified tiles are non-abrasive and you can use them in areas of high traffic with ease. One more major advantage that vitrified tiles have over other flooring options is that all designs on the vitrified tiles are printed using soluble salts which are pigments that penetrate the surface to about 2 to 3 mm of depth. This actually means that the designs on vitrified tiles are at a depth of 25 per cent of the tiles thickness. Since the tiles are so hard and non-abrasive, the design is practically permanent. Even some of the floor polishes only exist on the surface and have nil resistance to abrasion. Any change in temperature or moisture does not lead to expansion and this makes tiles an application free of any joints.

All you need to do to your vitrified tiles in the name of maintenance is sweeping. However, to ensure longevity, here are a few cleaning and caring tips.

Maintenance Tips
Use a floor mat at entrance points to minimise the presence of any abrasive dust particles.

Do not use any harsh chemical based cleaners for your vitrified tile flooring. Since these tiles are not porous, damp mopping should do the cleaning well.

Make sure that the grout joints are cleaned annually, scrape out any powdery or cracked joints and refill them once in a while to keep them in good condition. 

Wooden warmth
Wooden floors come in a wide range of widths, stains and finishes. Planks can either be solid wood of different thicknesses or they can be engineered planks that feature a thinner layer of natural hardwood affixed to an engineered substrate, which can be applied directly over a concrete floor. Solid wood floors must be applied over a plywood sub-floor. Wooden flooring adds warmth, beauty and value to your home. Wooden floors enhance the decor of any room. It lasts much longer than carpet and lino that have to be replaced often. New technology in wood stains and finishes means just minimal sweeping or vacuuming to take care of your wooden floor. Wooden floors do not collect as much dust or harmful allergens as carpets and other types of flooring, nor harmful allergens.

Maintenance Tips
If you already have wooden floors, re-finishing can give them a new, updated look. But this is a daunting process since sanders are difficult to control, generate heaps of wood dust and can damage your floors if not handled properly. You’ll also need to apply a polyurethane or urethane finish, both of which are difficult to use and produce dizzying fumes. Some floors can be refinished using what is known as a screening process, which some companies define as sandless refinishing. For a natural, nontoxic DIY refinishing option, consider using a soy-based gel finish remover and a tung oil finish. 

Ceramic cult
Environment friendly ceramic tiles are made from raw materials, including clay, sand and glass. These materials are combined with other recycled materials to form ceramic tiles. These help reduce energy use (and bills) by keeping your house cooler in summers. They also add some insulation qualities to your home during winter months.

Low maintenance: Ceramic tiles are easy to maintain, from simple cleaning to optional sealing over time. Besides cleaning, there is no special maintenance involved.

Easy to clean: Sweep and wash. It doesn’t get simpler and cleaner than that. Ceramic floors make excellent kitchen floors as they can be easily wiped and disinfected from spills. If the grout gets dirtier than you like, you can use a specially formulated grout cleaner to help get the dirt off.

Scratch resistant: Class 3 and Class 4 ceramic tiles (tiles which are made for moderate to heavy floor traffic) don’t scratch.

Reduces household allergens: Unlike carpets and rugs, ceramic tile does not attract dust and dust mites. Homes with ceramic floor tiles have less dust in the air, making the air in your home much healthier by reducing the amount of household allergens.

Moisture resistant: You won’t have to worry about accumulation of moisture in ceramic tiles. You can also wash the floor with lots of water if desired.

Marble magic
Real marble tiles have a beautiful, unique look like no other surface, with all their whirling patterns and shade variations. There is a vast variety of colours to choose from so marble will work with any colour-scheme. The colours can be light and airy to deep and rich. And like other hard- flooring surfaces, marble is ideal for allergy sufferers because it doesn't hold allergens.

Then there is the "awe" effect. Using natural materials in your home enhances the appeal and value manifold.

Caring for marble floors
It is certainly a beautiful material and you do need to look after it to keep it that way. Make sure you treat it with respect and don't clean it with harsh abrasive cleaners or brushes. A damp rag will do the trick for wiping off the dirt. Be sure to remove any large pieces of debris that may scratch the surface.

Marble floors also need to be resealed depending on how much use these get. You may need to re-seal it every year in high-traffic areas. This will help increase the life of the floor. When your marble floor becomes dull, having it buffed will bring it back to life. 

The writer is, CEO of RAK Ceramics  India Pvt Ltd.

Ground Realty
The split that makes sense
Jagvir Goyal

Architects are in general wary of window air conditioners. Their preference is always for split ACs. According to them window ACs mar the beauty of the windows, block natural light and protrude too much behind the walls. Even if you have some window ACs with you, they will suggest you to exchange them for split ACs for your new house.

Options
Leaving aside the window ACs, which can only be provided in an external wall of a room, either in the window or by creating an opening in the wall, a house owner has the option of going in for a split AC in each room, multi-ACs or central air conditioning with VRF system in his house. For individual houses, central air conditioning with VRF system doesn't look practicable and is quite costly also. Multi AC system, where two to four split AC indoor units are connected to one outdoor unit has been brought to the market by some AC manufacturers, but it has not succeeded much. The AC sellers themselves narrate its shortcomings. There is not much cost saving in buying it and there are power consumption concerns in case all the units are not being used regularly. The choice, therefore, gets limited to a separate split AC unit for each room.

Air conditioning provision
During the construction of new houses, provision is made these days to provide air conditioning in all rooms irrespective of whether the owner installs an AC in a room at the time of construction or at a later stage or never. As and when he desires to air condition a room, the wiring and drainage provision is available and no time is lost in installing and commissioning of the AC. PVC pipes of 2 inch diameter are provided in the walls by planning the location of split ACs. These pipes are supposed to carry the copper piping along with electric wires connecting the indoor and outdoor units of a split AC. Drain pipes are also concealed in the walls separately and are led to suitable drainage points. The benefit of making these provisions is that no wires or pipes are visible on walls when the AC indoor units are installed.

Working of split ACs
Split ACs have one indoor unit hung on the wall in a room and one outdoor unit, located outside the house (on the roof or on a bracket fixed on the external face of a wall). Two copper tubes, called refrigerant pipes connect the two units. These pipes carry the refrigerant. One pipe takes the refrigerant from outdoor unit to indoor unit for creating the cooling effect and the other pipe brings back the refrigerant to the compressor in outdoor unit for its compression and recirculation. Both the tubes are well covered with insulation. In addition, a PVC pipe connected to the indoor unit and concealed in the wall acts as drain pipe and takes away the water from AC unit to the discharge point.

Copper piping
The copper piping provided for split ACs is a costly item. Its cost varies from Rs 140 to Rs 200 per foot. The rate is for the pair of copper pipes. Copper piping should be got from the company supplies the AC units to you. It is important to check that the copper piping has been provided with good insulation. Some traders sell bad quality piping under the garb of imported copper piping. These days many Chinese copper items are available in India and these are as good as iron. One should approach a trusted dealer for getting the copper piping. The benefit of getting the copper piping done from the AC supplier is that some length, about 10 to 12 feet, is given by the supplier free of cost to the AC buyer besides free installation. Thus a good saving can be made by the house builder.

When to provide copper piping
When the AC outdoor unit is located on the roof and vertical wall from the ground to the roof is available, the conduits concealed in the walls to contain copper piping may run vertically without any bend in them. In such cases, there is no need to provide copper piping in the conduits before plastering of walls is taken in hand. However, in certain cases, the concealed conduits need to have bends. In such cases, the copper piping should be provided before taking up the plaster work in hand. The electrical and earthing wires should also be provided along with copper piping. The wires and piping should be extended by 2 ft at each end of the concealed conduit for connection to AC units later on.

Split ACs
Till a few years back, split air conditioners having star ratings from 1 to 5 were available in the market. More number of stars meant more power efficiency of an AC and more cost also. One could choose a split ACs as per one's pocket. These days, split ACs with inverter technology have stormed the market. Every AC producing company has come out with many models of inverter ACs. These ACs are termed as highly power efficient with energy saving to the tune of 60 per cent in comparison to the normal split ACs. However, cost of these ACs is very high. If a normal split AC of 1.5 tonne with 5-star rating costs Rs 35000, an inverter AC of 1.5 tonne costs around Rs 55000.

Inverter technology
While the normally prevalent split ACs are provided with star rating of 1 to 5 by BEE, no star ratings have been prescribed by BEE for inverter ACs. These ACs don't have the normal induction motor in them. In inverter ACs, once the desired temperature is achieved, the inverter units in the AC keep varying the compressor speed to maintain the temperature instead of turning it off or on frequently. Thus the power that gets consumed in normal AC in turning the compressor on again and again is saved. BEE has not considered this technology for star ratings so far.

This column is published fortnightly 

Rating repertoire
Star ratings for ACs have become more stringent in 2012. As per the guidelines prescribed by BEE, an AC with 5-star rating but manufactured in 2011 or earlier, has become 4-star rated in 2012. Thus while buying an AC, look out not only for the number of stars but the year of manufacture also. The year of manufacture must be 2012 only. If you are buying an AC manufactured in 2011 or 2010, consider its star rating as one less than that shown on the sticker pasted on the AC. In 2015, all ACs will again undergo another star rating revision. ACs manufactured between 2012 and 2014 and having 5-star rating will become 4-star in 2015. One company has already overcome this by increasing the power efficiency of its ACs to such an extent that the star ratings of its ACs will remain unchanged even in 2015. 

living with vaastu
Ring in the positive energy with fish
Madan Gupta Spatu email your queries to vaastu@tribunemail.com ...

Fish aquariums are kept in houses, offices and shops as a decorative and remedial application for Vaastu defects all over the world. Fish are very humble and as these are considered Lord Vishnu’s incarnations, it is believed that they bless the person who feeds them enabling him to lead a peaceful life. People having Meen rashi or Pisces as Sun or Moon Sign or ascendant in birth charts benefit in many ways by keeping fish in home or office.

Ornamental fish are colourful and attract everone with their beauty. They are very active and never rest. There presence brings dynamism in the environment. By observing their activities everybody gets energised and relaxed immediately. This helps in reducing the stress and strain from the minds of people and thus improves their health.

When the guests see a fish aquarium on entering enter ing a house all the negative energy that is created from their exclamations pass to the aquarium. The fish have a high degree of protective energy and they absorb these negative vibes.

Fish tanks store lot of water and hence help in balancing the weight of the place as per Vaastu.

Fish tanks should be kept in a hall or verandah in the southwest corner preferably to balance the weight. The fish aquarium should be visible, while the guests are seated in the sofa.

People of any religion can keep fish aquariums in their homes. Water must be changed frequently and filters are necessary for keeping the water clean. Proper aeration and water circulation make the condition better and enable the fish to live a long and healthy life. If the fish die frequently, then it is a clear indication of improper position of the aquarium and bad Vaastu energy in the house.

Keep the following points in mind for your fish acquarium:

n Place aquarium in the southeast corner of the living room

n The second best direction to place it is in the north

n Acquarium in house is the best remedy to derive financial benefits

n Aquarium also drives away all the evil effects from your house and enhances good luck

n It should consist of 9 fish. The dragon fish or the gold fish are the most effective according to Vaastu for fish aquarium. The aquarium should have 8 dragon or gold fish and one should be black.

n Even if a fish dies, you need not worry because the bad elements are going out of your house. Replace it with another fish.

n Looking at an aquarium is the best way to relax your mind.

n Fish should be vibrant and healthy; the plants in vibrant green and the lighting can also be additional elements of beauty in your aquarium.

n An aquarium should not be kept anywhere in the house except in the drawing room and the best direction is east or north.

n Do not keep it in bedroom.

n Keeping an acquarium in kitchen can cause food poisoning or indigestion of food. So it’s better to avoid keeping an aquarium in bedroom or kitchen. 

Commercial property rental looks up

Despite indications that the demand for office space will remain sluggish, there has been an uptake in absorption in the first quarter of 2012 along with an increase in rental value, as per the findings of a recent survey by Royal Institute of Chartered Surveyors (RICS). The 'India Commercial Property Survey' has revealed that the firming occupier demand has resulted in rental expectations turning positive this quarter as opposed to the negative trend during the last three months of 2011.

The RICS is a leading self-regulatory professional body for qualifications and standards land, property, construction and associated environment issues.

"Market activity indicates that rental value for retail properties, particularly high streets, has seen an increase in 2012, while supply of other retail space such as malls is also on the rise," RICS said.

While the demand for office space still remains relatively sluggish, there has been some uptake in absorption this quarter as compared to previous months, it said.

"An easing in global strains has led respondents to upgrade their expectation in both the occupier and investment markets in the country," RICS Chief Economist Simon Rubinsohn said.

Commenting on the survey, Cushman & Wakefield executive director Ravi Ahuja said: "All major office micro-markets continue to witness an oversupply of office space as average vacancy levels have touched double-digit numbers with exceptions being Bandra-Kurla Complex and Goregaon East in Mumbai, Gurgaon in NCR and CBD/Off CBD locations in Pune." As a result, overall, rental values are expected to remain stable with a downward bias except for the above mentioned locations, he said, adding Mumbai continues to see significant relocation activities from South towards north Mumbai. — Agencies

Quick takes
n Rising tenant demand has positive bearing on rental outlook
n Investment market is buoyed by strong rebound in enquiries and expected transactions 

Realty sentiment improves in Delhi

Property prices for the Delhi and NCR region have seen an escalation if one compares per square feet prices(PSF) of Q1-12(Jan- Feb- Mar) over Q1-11, as per a study by 99acres.com. Commenting on the improvement in the overall sentiment in the realty sector, Vineet Singh, Business Head, 99acres.com, said, “Capital values in Delhi continue to move upwards even though the market seems to be in a phase of stagnation and lots of talk about imminent price reduction. But, even in Delhi we have seen price appreciation moderating to an average of about 20 per cent. So, if the present trend continues we’ll see price stability in Delhi going forward. But, as of now I do not see any price reduction happening in the Delhi market. At its best the rates will stabilise”.

 A look at the property prices of Delhi reveals that all localities have seen price appreciation in Q1-12 when compared to the same time a year ago. Rohini and Mayur Vihar saw highest price rise with 32 and 16 per cent increase in property prices in Q1-12 over Q1-11. Most of the other areas saw prices increase within the range of 12 and 19 per cent respectively in Q1-12 over Q1-11

 Almost all localities of Dwarka, a subcity located around South West Delhi has witnessed a double digit percentage increase in property prices over the last one year . The most important factor fueling the land rates hikes in this region is the Delhi Metro and its close proximity to the airport which has emerged as the turning point for real estate prices for this region. Both, Sector 4 and Sector 6 saw prices appreciate by 33 per cent respectively in Q1-12 over Q1-11.  Sector 3 has seen the maximum price rise with almost 40 per cent hike when compared to the previous year.

Localities in Noida and Ghaziabad region have seen price appreciation across all localities. Sector 78 and Sector 107 of Noida has seen prices moving up by 29 and 27 per cent, respectively in Q1-12 over  Q1-11 with property prices are floating around Rs. 3860 psf and Rs. 3939 psf in Q1-12. Kaushambi and Raj Nagar extension in Ghaziabad area also witnessed per square feet rates move up by 23 and 18 per cent, respectively in Q1-12 over Q1-11. Localities of Gurgaon also witnessed an upward trend in property prices. Properties located on the Palam Vihar and Central Park has seen the highest appreciation in property prices with PSQF rates moving up by 40 and 36 per cent respectively in Q1-12 over Q1-11. Localities like Golf Course Road and DLF Phase 2 witnessed a 25 and 28 per cent increase. 

Quick takes

n Rohini and Mayur Vihar saw highest price rise with 32 and 16 per cent in Delhi

n In Noida, Sector 78 and Sector 107 have seen prices moving up by 29 and 27 per cent, respectively

n Dwarka, witnessed a double digit percentage increase in property prices over the last one year

n Palam Vihar and Central Park in Gurgaon seen prices moving up by 40 and 36 per cent, respectively

Pick of the week

Leap of comfort
Steelcase has unveiled Leap chair, a high performance, ergonomic seating solution for any office. The leap chair is designed keeping in mind the human spine and the strain subjected to it by long hours of sitting and is based on four key elements of movements, orientation, fit and sustainability.

An array of sanitaryware
Looking to give a complete makeover to your bathroom? Check out RAK Ceramics' Luxury range of sanitaryware. The collection includes a range of washbasins, bathroom sets - comprising wash basins, bidets, water closets , kitchen sinks etc. RAK has introduced this Italian designer sanitary ware for the first time in India in different shapes such as round, oval, square and colours like alpine white, ivory, and many more.

Available at: All the leading multi brand outlets across the country. Price Range: Rs 500 onwards.

Art work for floors
Pergo has launched TotalDesign, a range of laminate flooring developed through a new, creative design concept. A series of eight artistic floors with motifs such as giant fingerprints in bronze and silver, black and white barcodes are available in this range. All of these come in big slab format (1.236 x 400 mm).

launch pad
New York Residency

Prithvi Infradevelopers launched its world-class residential and commercial complex - New York Residency - in Kandaghat, near Shimla, Himachal earlier this week. Duly approved by the Himachal Government, the project will have 198 residential units apart from two cottages. The super areas of the flats shall be: 2 BHK flat 1260 sq.ft.; 3BHK approx. 1600 sq.ft. and 4 BHK approx. 2100 sq.ft. The total area of the project is approximately 18,460 sq. mtrs out of which only 29 per cent area will be utilised for construction. Kandaghat bus stand and railway station are at a distance of just 500 metres from the project site. Giving details of the new project Vikas Wahi , Director of Prithvi Infradevelopers, said, "This project will be completed within three years".

Araville-premium homes
Supertech Limited recently launched Araville - Premium homes project in Sector 79, Gurgaon. Araville is spread over an area of around 10 acres and will comprises 2, 3 and 4 BHK, available in the size1295 sq. ft to 3620 sq. ft. The price ranges from Rs 63.45 lakh to Rs 1.7 crore. Artistically designed, the key features of the project are exclusive club house with ultra-modern facilities, pitch and putt Golf Park, dedicated kids zones with world-class sporting amenities, swimming pool, club house and tennis court, besides three side open apartments. The project consisting of 610 2/3/4 BHK flats and EWS with a total saleable area of approximately 10 lakh sq. ft is expected to be completed in a period of three years at a total cost of Rs 400 crore.

Do I have to invest whole of the money I get — vishal bhardwaj

A. Your queries are replied hereunder:-

a) You can purchase another residential flat within two years after the date of sale of a residential flat. This will enable you to claim exemption under Section 54 of the Act in case the amount of capital gain is invested towards the purchase of a residential house within the aforesaid period.

b) Section 54 of the Act provides for exemption from leviability of tax as long-term capital gain if the assessee purchases or constructs a residential house within the specified period and cost of such residential house is equal to or higher than the amount of long term capital gain. Karnataka High Court in the case of CIT vs. Smt. G. Rukminiamma (196 Taxman 87) has held that in case flats are situated in the same building it will be a case of a construction of a residential house. Therefore, in case the flats are situated in the same building you should be able to claim the benefit of exemption provided the conditions laid down by Section 54 of the Act are met.

c) You can purchase a residential flat within one year before or two years after the date of sale of the old residential flat. However, in such a case so much of the amount as is not appropriated towards the purchase of a residential flat before the due date of filing tax return, is required to be deposited in a bank account under capital gain scheme. The amount so deposited can be utilised for the purchase of a residential flat.

d) In the case cited in the query, you are not required to utilise the entire amount realised on the sale of a residential flat. It is the amount of long-term capital gain which is required to be utilised for the purchase of a residential flat.

Buy new house or bonds to save tax

Q.I bought a house in February 2009 for Rs 25 lakh. I got it registered in my name and paid Rs 2 lakh as stamp duty. I have taken a loan of Rs 21 lakh as loan for buying the house. I have been paying the installments regularly and have paid an interest of approximately Rs 7 lakh in the past three years on the loan amount. I have received an offer to sell the house for Rs 50 lakh from which I would repay the loan I had taken. Kindly clarify:
1. What will be the long-term capital gain from the transaction, if I sell the house.
2. Until when can I invest the amount gained from the transaction?
3. What are my tax liabilities? 
— dimple

A. Your queries are replied hereunder:- a) On the basis of the Cost Inflation Index (CIF) notified for the year 2011-12, the amount of indexed cost would work out at Rs 36,41,753. The amount of long-term capital gain thus would be Rs 13,58,247. The CIF has not been announced for the year 2012-13. It would be applicable in your case. The same is expected to be higher for the financial year 2012-13. The amount of capital gain would, therefore, be lower on the basis of such index.

b) You have the following options to save the amount of tax leviable on the long-term capital gain.

(i) You can utilise the amount of capital gain towards purchase of new residential house within one year before or two years after the date of sale of your old house; or

(ii) You can construct a new residential house within three years after the date of sale of your old house; or

(iii) You can invest the amount of capital gain in the acquisition of tax saving bonds within six months of the date of sale. These tax saving bonds have a lock in period of three years and carry interest @ 6 per cent per annum.

c) You can also have a combination of options mentioned at (i) & (iii) or (ii) & (iii).

d) In case you do not intend to make an investment, you will be liable to pay income-tax @ 20 per cent plus education cess of 3 per cent thereon on the amount of long-term capital gain.

Can my friend own three houses?

Q.My friend has one residential house and one plot. He sold the plot and purchased two flats with that money. Can he own three houses? If not then what can be the other alternatives? 
—ramesh

A. Your friend can definitely own three houses without any problem. However, he will not be entitled to claim exemption under Section 54F of the Income-tax Act 1961 (The Act), in respect of the cost of flats as he already has one residential house and could have purchased one residential flat in order to avail of such an exemption. Proviso to Section 54F of the Act provides that the benefit in such a case would be allowed provided the asessee does not own more than one residential house other than the new residential house or purchases any residential house with in a period of one year after the date of sale of original capital asset. Your friend has purchased two flats by utilising the sale proceeds of the plot. He would, therefore, be covered by the proviso and would not be able to claim the benefit. 

How can my sister avail tax benefits?

Q.My sister purchased a plot at Panchkula in an urban estate developed by HUDA in Sector 25 on January 23, 2004. The said plot was re-allotted by HUDA on April 12, 2004 after completing the formalities. The balance amount was repayable in six annual installments of Rs 55,960 each with installment to be paid on or before October 30 each year. All the six installments have since been paid. The last installment was paid on October 20, 2009 along with interest as applicable after the offer of possession on February 3, 2006. In between HUDA demanded amount of enhancement, which also has also been paid as per their terms. The possession of plot has not been taken by my sister so far as she has no intention to construct. HUDA has now made it mandatory to first take the possession and construct 4½" boundary to demarcate the plot. My sister wants to sell the plot without any house constructed thereon after taking possession now. As three years have already elapsed from the date of purchase of the plot, it should be considered a long-term capital asset now. I understand that in the case of plot the date of possession of plot is irrelevant for calculating period of three years. If my sister sells the plot now, then will it be considered a long-term capital asset enabling her to save LTCG tax or not? 
— parkash jindal

A. Your sister is presently holding a right to property. Such a right if sold after a period of three years shall be treated as a long-term capital asset and any gain arising on the sale of such a right would be treated as a long-term capital gain.

Doubtful issue

Q.I would like to know if capital gain incurred from selling one residential apartment can be set off against buying of two residential houses six months before the sale. The houses bought are of the same value for which the apartment is being sold.
I have bought one apartment for Rs 60 lakh and the second for Rs 50 lakh in December 2011. The sale deed is due soon. Please advice and help.
—riva aggarwal

A. The issue with regard to the availability of exemption under Section 54 of 
the Act, in case two houses are purchased within the stipulated period after the sale of the old residential house by utilising the amount of long-term capital arising on such sale, is not free from doubt. This is because there are conflicting decisions of various High Courts on this issue. In a recent decision of Karnataka High Court it has been held that the terminology used in Section 54 of the Act does not lead to a conclusion that only one house can be purchased by utilising the amount of long-term capital gain. However, the issue before the Karnataka High Court was with reference to the construction of more than one flat in the same building. You should, therefore, be prepared for litigation on this issue in case you claim an exemption by declaring that you have purchased two residential houses within the specified period by utilising the amount of long-term capital gain arising on the sale of a residential house.

Not entitled to tax exemption

Q. I am planning to sell my in Ludhiana. I have just constructed another house at my village in Ludhiana district. As the new house has been constructed one year before the sale of the other house in Ludhiana, will I be able to claim tax exemption? Kindly tell me the exact procedure and the papers needed to save capital gain tax. Will I need the map of house constructed at village and a certificate from the Sarpanch of the village

— nirbhai singh toor

A.It has been stated in the query that you have already constructed a residential house at your village in Ludhiana district. You are not entitled to claim exemption under Section 54 of the Act. The capital gain arising on the sale of a residential house should be utilised for the construction of a new house within three years after the date of sale of a residential house. The expression used in Section 54 of the Act : "within one year before or two years after the date of sale", is applicable when the house is purchased within the aforesaid period. For construction, the period of three years has to be after the date of sale. 

loan zone
Are we eligible for a home loan?
S. C. Dhall email your queries to realestate@tribunemail.com ...

Q.We are going to purchase a plot whose registry will be done on June 1, 2012 in the name of my mother. We want to take a home loan for the construction of a house on this plot. My mother is a housewife and she has no source of income. But I (son) am a salaried person and my gross salary is Rs 16000 per month, and my father is a businessman whose monthly income is Rs 13000. Both of us are income tax assessees and have been filing Returns individually for more than three years. Are we eligible for a home loan for construction purpose? Can I and my father apply for a home loan as co-applicants? — Mandeep Kumar

A.Yes you and your father are eligible for home loan as co-applicants along with your mother for constructing a house on the plot, but there are some conditions which you will have to fulfill for this. To be eligible for a home loan, most of the lending institutions in India would require you to be:

a) An Indian resident or an NRI

b) Above 18 years of age at the commencement of the loan

c) Below 65 when the loan matures

d) Either salaried or self-employed

With new RBI regulations in place, you will be entitled to only 80 per cent of the property value as loan. Registration cost will not be part of the loan. Besides, there is a registration cost.

Should I take a loan?

Q. I have paid 50 per cent installments to buy a flat. I can pay the pending amount from my sources also. I am in the slab of 20 per cent tax slab. I want to take loan nearly Rs 23 lakh for five-six years from a bank to pay the pending installments to get exemption in income tax. Which is the better route - to pay from own sources or to take loan from a bank? Kindly guide me. —ashok kumar

A.You have not mentioned from which source you had paid the 50 per cent installments for the flat that you have purchased.

n You can also pay from your sources provided you have already revealed your source of income in your Income Tax Return

n It is not possible to calculate the loan amount that you are eligible for taking from a bank as you have not mentioned you monthly /annual income.

n It is always better to pay from own sources and loan should always be the last resort.

Eligibility issue
Q. How do banks decide about home loan eligibility of an applicant?

A. The bank will assess your repayment capacity while deciding the home loan eligibility. Repayment capacity is based on your monthly disposable/surplus income, (which in turn is based on factors such as total monthly income/surplus less monthly expenses) and other factors like co-applicant's income, assets, liabilities, stability of income etc. The main concern of the bank is to ensure that you can comfortably repay the loan on time and ensure end use. The higher the monthly disposable income, higher will be the amount that you will be eligible to get as a loan. Typically a bank assumes that about 55-60 per cent of your monthly disposable/surplus income is available for the repayment of loan. However, some banks calculate the income available for EMI payments based on an individual's gross income and not on his disposable income.

The amount of the loan also depends on the tenure of the loan and the rate of interest as these variables determine your monthly outgo/outflow, which, in turn, depends on your disposable income. Banks also fix an upper age limit for home loan applicants.