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real scene: sale gimmicks
Does cake with a better icing sell more?
real talk
realty bites
Property Expo
decor trends
Ground Realty
pick of the week
Harness positive energy of Navratras
tax tips  Is capital gain computed on the basis of circle rate? Is the insurance claim amount taxable? Should I rent my son’s two houses?
loan zone
vaastu wisdom Window facts Backyard issues Room allocation
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real scene: sale gimmicks
While this argument over the price factor continues, it is interesting to note that the same builders who are not ready to budge an inch on the pricing front are more than happy to offer “discount offers” and freebies to the buyers. However, the catch here is that the cost of the free stuff is already factored in the total cost. Always remember that nothing comes for free and these are nothing more than sale-enhancing strategies. Here are a few gimmicks that are used to lure buyers to finalise deals: No free lunch Builders are willing to promise anything to get clients to sign on the dotted line — from no registration fee and installed modular kitchens to a free luxury car. Some smart developers will rescind the freebie and agree to give you a discount on the base rate. However, one should check for hidden charges. The latest to catch the buyers’ attention is the scheme wherein one pays only 10 per cent of the cost at the time of booking and the balance on possession. The truth is that such schemes are being offered by developers who need cash urgently for the projects that are under construction. As such projects don’t have a stable finance source or plan; there is a risk that these will never be completed. Some developers assure home buyers that if they make a down payment immediately, then they will get a good interest rate from a bank with which they have a tie up. For buyers in such a situation it will be better to look around and check for deals from various banks on their own. Another favourite gimmick is the construction-linked payment plan, where a builder will ask the buyer to pay according to the stages of construction and not pay anything if the construction doesn’t progress according to the promised pace. The fact is that irrespective of the pace at which the construction work progresses, the builder will ensure that the buyer pays on time. Also remember a construction-linked plan is not an insurance against delayed projects. Riding on brand names The more common way to make a project location more attractive is by highlighting the time required to reach the city’s hotspots from the said project. Builders are firm believers in the power of branding which is why they leverage the popularity of a nearby locality. So they will name their location extension or phase 2 or 3 of an already established project. It will be wise for buyers to visit the project site before considering any such project. The new area is probably located so far in the suburbs that it borders another city rather the one it is named after. Also don’t fall for any proposed infrastructure project that will be coming up in the locality. Such proposals may not even be in the planning stage let alone having got all approvals. Scarcity scare Another sale gimmick is to create an impression of scarcity. This is when a prospective buyer says that he would need some time to make up his mind. The builder just rattles off the list of buyers queuing up to buy the same property. Some will even insist that it is the last available apartment or how quickly the first phase of the project had sold out, while others will warn you that the prices will be increased from the next month. In over 80 per cent cases it is lie. The best strategy here is to stand your ground as this will, in all probability, get you a good deal. These are just some of the most common lures that home buyers come across. Smart builders and those most desperate to sell will be more innovative. Some will offer guaranteed returns to investors. It is only after one makes the down payment that he is told about the fine print that you will get the return only if you share the property with two others or the advertised returns are only for investment above a certain amount. The builder knows that after putting in the money, a buyer has little choice as he would either stay put or invest more for better returns. The bottomline is: Do not look at freebies as an incentive, and try to get a cash discount on the property instead. Not the ones to be ‘banked’ upon And if you think that it is only the builders who can pull wool over buyers’ eyes, then think again. Banks are no less aggressive when it comes to “making” new clients. Banks send mails promising the lowest interest rate, minimum processing fee, and fast loan approval. Most of the buyers neither have the time nor the patience to go through the terms and conditions, which are usually cushioned in legales that can make one's head spin. Some banks have also brought back the ‘infamous’ teaser rates —dual-rate loan where the interest rate is fixed at low figure for the first two or three years and then gets converted to a high fluctuating rate. Some of these schemes are toxic. Home loan takers should know that the Interest rate of a home loan has two components — the base, which is the rate below which a bank cannot lend, and the spread, which is the margin based on customer and product specific factors. The spread is often fixed arbitrarily by banks, so between two banks that offer you the same effective rate, choose the lender that offers you a lower spread above the base rate. Further there are chances where interest rates of two banks are the same but the sanctioned loan amount may vary. One should find whether the bank is willing to give a lower amount than the one you have asked for. In that case one may have to take a personal loan to cover the shortfall. The high interest rate of a personal loan could be a dampener. As the sanctioned amount depends on your total income, the banks may ask for additional collateral, too. Some banks are also coming out with special rates as this increases their customer base. However, one gets a special treatment only till one signs the papers. Any new rate will be applicable to the home loan taker, even if one had taken the loan just a month ago. Most borrowers, who had opted for teaser rates of 8 or 8.25 per cent in 2009, have suddenly found their interest rate jumping to 12 per cent, while new borrowers are being wooed with lower rates. In case you are paying an interest rate higher than 10.5 per cent, consider switching the bank. If your credit score is good and the property is ready, the new bank will be willing to lower the processing fee. One can also negotiate with one’s own bank and pay a small conversion fee for a lower interest rate.
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Does cake with a better icing sell more?
The type of marketing strategies that Indian developers employ to sell their products in a tough market may often seem strange to property marketers in other countries. Nevertheless, these marketing strategies are based on a deep understanding of their target clientele, which is as variegated as the Indian real estate market itself. In India, the aspirational quotient cannot be under-estimated and can often be capitalised upon. Certain add-on offerings or 'freebies' often appear to have no logical connection to the actual considerations property buyers would have. However, they in fact address well-researched 'points of attraction' within their targeted customer base.
Often, such offerings meet with a level of success that foreign market analysts are challenged to explain. This is because they are pertinent to a highly individualistic national psyche, and are usually played out at times of the year when the country's property buying sentiments are at their traditional peak. No fixed formula Not all of these incentives hit the mark, because not every type of buyer can be tempted with 'freebies'. The Indian middle-class is a highly price-sensitive one, and the current buzzword in this market segment is 'correction'. These buyers, who are on the market for homes costing between Rs 35-75 lakh, have an eagle eye on the final bottom line and have been primed for a possible reduction in prices. In fact, such a reduction has been long awaited in the primary cities. Given the high demand for mid-income homes in cities such as Mumbai, Pune, Bangalore and Delhi-NCR, whether such a correction will come at all is a big question mark. In most cases, developers have the financial wherewithal to stay firm on their official market prices. They see little sense in marking down their price tags and possibly signaling what, from the buyers' perspective, is a long overdue correction. The alternative strategy is often to announce incentives. However, because the base pricing of the units in these projects reduces their margins, these incentives tend to be far from extravagant. For instance, a hi-fi sound system or a microwave oven as an inducement to buy a 2 BHK in the suburbs of Mumbai is unlikely to work for a budget-conscious buyer who is more concerned with how much the EMIs will impact the family budget. Freebies only work in the mid-income housing segment if they actually add value to the property or lighten the financial burden on the buyer in some way. Conversely, the marketing tactic of offering lifestyle-oriented freebies is often quite effective when it comes to high-end premium homes. Thanks to the considerably higher base price and the proportionately better purchasing power of the target clientele, developers can afford to raise the ante on the add-on offerings. In cases where there are two or more luxury home projects of more or less equal attractiveness in a single location, these freebies can become very decisive differentiators. High networth buyers evaluating all available options often respond to the cake with better icing, given that they intend to buy one cake or the other anyway. — The writer is Head, Marketing, Jones Lang LaSalle India
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real talk
The government is in the “reform mode” to bring a floundering economy back on track. A slew of reforms in different sectors were announced recently, some of these leading to strong reactions from different sections of society. The realty sector that has been suffering some rough weather for the past 12-18 months has been looking for a major thrust and reforms to be back in “business”. Lalit Jain, the national president of CREDAI, who has been actively involved in the recent parleys initiated by the government to boost the growth of the sector, talks about the main problems afflicting the sector and the reforms that are needed to get it back on the growth track. Excerpts from an interview:
Q. Is there anything for the real estate sector to be happy about in the current ‘reform movement’ launched by the government? A. We are happy with the current reform movement started by the PM and also about the fact that the Finance Minister has shown interest in improving the real estate sector. It is a historical fact that a boost given to the realty sector always gives fresh impetus to the GDP and the overall growth of economy in the country so it is high time that reforms are worked out in the realty sector. A booming realty sector is an indicator of the robust health of economy. Q. There is a huge demand for affordable housing in the country. What sort of reforms can make the affordable housing dream a reality? A. Though it is difficult to exactly define affordable housing as the affordability threshold of different segments differs and what is affordable for one can be unaffordable for other. But looking from the perspective of a lower middle and middle class person's perspective we can say that the maximum demand is in this segment. The high cost of property is a deterrent for those in this segment. There is a need to take steps to keep the prices affordable for an aam admi. Four types of reforms are needed for affordable housing: Administrative reforms: This involves setting in place the mechanism for single-window clearance. Almost 12 to 40 per cent of the sale price can be saved if so many different clearances from different bodies are not required. Land reforms: The second type of reforms that can reduce the price of homes are the land reforms. Land is fast becoming a scarce commodity but existing FAR and FSI norms make people go for horizontal expansion as a result we are, in fact killing land and the land under cultivation is getting reduced. A higher FAR is the need of the hour. Apart from this the land auction system also needs to be revamped. According to the current practice land is auctioned to the highest bidder, which means that the cost of land goes up tremendously and some time there is no rationale for the exorbitant sums paid for the land. So there is a need to have some kind of rationalisation in the land auction system. Fiscal reforms: The third type of reforms that will go a long way in reducing the cost of homes are the fiscal reforms. As per estimates almost 36 per cent of the total cost component is the tax component. One has to pay several types of taxes and duties like the excise, customs, stamp duty etc and all these add substantially to the total cost of residential units. There is an urgent need to work in some rationalisation in this system. Tax exemption should be in place for housing for EWC Banking reforms: The high cost of funding is a big deterrent for the housing sector. Home loan rates now are in the region of 10.5 per cent and higher. These were earlier around 7 per cent. It goes without saying that lesser home loan rate of interest leads to more sales while higher rates keep the buyers away from the market. So the loan interest rates should be kept low. On the other hand the cost of funding for the developers has also increased, so reforms in the banking sector will serve as a double action pill that will cure the sector to a great extent. Q. What are the main issues that CREDAI is focusing on now? A. While transparency and fair practices have been CREDAI’s major thrust areas, the main focus now is on ensuring that there is sufficient liquidity in the sector so that there are enough funds and the projects that have been delayed due to the shortage of funds are resuscitated and completed soon.
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realty bites
The construction industry is facing acute labour shortage due to social schemes like JNNURM and NREGA, leading to delay in infrastructure projects and hampering the growth of the sector, Assocham said earlier this week.
“Due to government social schemes like JNNURM and NREGA, a large number of construction projects are lagging behind their completion schedule mainly because of acute labour shortage,” it said. The growth of the sector has gradually declined from about 30 per cent in 2007 to about 12 per cent currently, it said. “Market size of India’s construction industry might not even reach Rs 30,000-crore mark by 2015 from the current level of about Rs 21,000 crore as the labour-intensive sector has been constantly grappling with the shortage of workforce,” it said. Besides labour shortage, slowdown in capital investments, continuing economic downturn and lackluster performance of realty sector are the other problems being faced by the construction sector, it added. “Many industry players have blamed government social schemes for generating jobs locally leading to continuous depletion of migratory workforce from the construction sector,” Assocham said. The paucity of manpower in the sector has shot up the cost of construction labour by over 25 per cent, it said. Further, Assocham has called for introduction of technology like pre-fabricated buildings, brick less technology to aid faster construction and counter the labour crunch faced by the industry. “Domestic construction companies need to invest heavily in technology to reduce construction costs, thereby providing additional benefits to the customers and spurt demand,” it said. DLF Retail eyes Rs 700-cr in next three years DLF Retail, a subsidiary of the country’s largest realty firm DLF is eyeing Rs 700 crore revenue in the next three years that will be driven by three new malls under development. “We are eyeing Rs 700 crore revenue in the next three years. We expect that the three new malls that we are developing in Delhi will largely contribute to doubling revenues,” DLF managing director for rental business Ramesh Sanka said on the sidelines of the India Retail Forum in New Delhi. Currently, revenues from the retail business stand at Rs 300 crore, he said. The company also launched its largest mall, the DLF Mall of India in Noida earlier this week. It will have an area of 1.8 million sq ft, and will be operational in nine months. Besides, DLF is also developing two other malls, the Chanakya and the Horizon in Delhi, with a total investment of Rs 800 crore, the construction on which will commence in the next few months. The Chanakya and Horizon malls will be luxury ones with an area of around 2 lakh square feet and 3 lakh square feet, respectively, Sanka said. “Initially we are concentrating in the Delhi NCR region. We expect these three malls, which are likely to be fully operational in the next three years to more than double our revenues,” he added. Currently, the company has a 1.4 million sq ft retail portfolio. With the opening up of FDI to multi-brand retailers last month, the company expects more international brands to debut in its malls, he said. — Agencies
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CREDAI NCR, will host a mega property from Octoberr 19 to 21 at Pragati Maidan. Showcasing flagship projects by leading real estate developers, the three day event will witness participation from more than 100 developers across Delhi NCR including Amrapali, Eldeco, Omaxe, Ansal API, DLF, ATS, Ashiana, Tata Housing, Wave Infratech, Supertech, Gaursons, Assotech and Parsvanath among others.
Giving information about the expo Getamber Anand said, "This expo will provide a unique platform for stakeholders to meet and interact with developers who are members of CREDAI. The expo will also align the faith of the consumers with respect to fair and transparent dealing.”
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decor trends
You have displayed a masterpiece on your drawing room wall. But no one bothers to give it even a second glance. Have you ever wondered why?
Maybe, something is amiss with the way you have lit up. Lighting up a painting is an art in itself — an interplay of highlighting and recessing the details in a work of art. Ask leading artists or gallery owners and they will tell you that proper lighting can add a new dimension to art just as bad lighting can destroy its beauty. “Light should not just highlight the details but also enhance the visual quality of a work of art,” says Prabha Das, a Delhi-based art curator. Usually there are many corners, pictures, objects in a room that get lost in a general flood of light. Thus it becomes important to use intelligent light to accentuate them. Lighting experts say that paintings should never be highlighted with natural lighting. The biggest danger is that the sun’s ultra violet rays can rapidly fade colours. Secondly, natural lighting has a changing quality as it comes from different directions and varies in intensity throughout the day and would suppress the hues in a painting. Even artificial light should be used selectively. Here the choice of colours is critical. “Avoid fluorescent lighting as it is cold and harsh and lends a bluish tinge to a painting. Tungsten bulbs with their yellow light are warm and bring the best out of art.” Halogen lights Interior decorator Vineet Rishi agrees, but adds that more than the light, the colour of the wall on which a painting is to be displayed is significant. Bright colours distract and take attention away from a good piece of art. Suppose a painting is predominantly blue but the wall on which it is displayed is a dark shade of yellow. The colours would clash and completely mar the beauty of the painting. “Stark white looks antiseptic. Off white is considered to be the most suitable background to display any work of art,” says Rishi, who specialises in interiors of corporate offices. Spotlights Spots are considered to be the best way of lighting up a painting. But spot lighting can be a tricky business, as a lot of imagination is required to highlight the right parts. For spotlighting, the size of the painting must also be taken into consideration. For a small canvas one spotlight is sufficient. But it should not be thrown directly from the top of the painting. It should be placed at an angle, in such a manner that the entire picture is well-lit and not just parts of it. For bigger canvases one can place spotlights on either side. The angle of the light has to be adjusted in such a way that the details are clearly visible. Track lighting, which is commonly used in galleries, is another way to light up art. Track lights are flexible lighting systems: these can be surface mounted or recessed with a range of light fittings to suit the needs. Care should be taken to avoid harsh spots that create pools of light and leave everything else in comparative darkness. Wire system lights comprise spotlights, cable grips, transformers and adjustable anchors. This is a very versatile lighting arrangement as it is easily adjustable and considered to be one of the best both at home and at art galleries. “Lighting works of art requires special skills but we don’t have any real experts in India,” says Rishi and adds, “As far as homes go, people usually don’t have much of an idea. Even artists and gallery owners resort to the hit and trial method where lights are concerned.” Thus the bottom line is imagination. If you have an artistic bent of mind, you will know how to properly light up a work of art. This will not just spare it from premature deterioration but would add more value and quality to the painting Different types of light Halogen Light: Produces intense white focused light that is excellent for displays. Track Lights: Flexible spotlights for special canvases. Wire light system also known as adjustable jhoola lights. Picture Lights: Broad, sleek lights. Commonly used in homes.
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The steel appeal
Jagvir Goyal
Certain components of the house have to be in steel only as no other material is suitable for them. These components are the Main Gate and the Window Grills. Steel has now extended its grip to the railings also. Most of the balcony railings being provided in the houses are in mild steel only. All these need to be strong and sturdy and therefore demand special attention during their fabrication and erection at site. Let’s have a look at these components:
The main gates: The main gates being provided to the houses these days are either in mild steel or are a combination of mild steel, stainless steel, wood and glass panels. While the structural framework is of mild and stainless steel, wood and glass panels are fixed on the gates to make them attractive. Sometimes gates are fabricated entirely in stainless steel. Such gates demand special attention towards the quality of material and its welding. Grills and toughened glass: Provision of grills in the windows of a house has always lent a sense of security to its inhabitants. Large sized windows are also being provided in the houses these days and the architects often advise against the provision of grills in them under the plea that the grills will spoil the splendor and beauty of large paneled windows. In such cases, one should opt for toughened glass in the fixed glazing portion of the windows while grills should necessarily be provided in the window portions with open-able shutters. Ladder: The provision of a helical ladder in homes has become very common. This is more prevalent in small houses. Such houses have common walls with the adjacent houses and it is often not possible to accommodate a flight of stairs from the first floor to the terrace. Therefore, a helical ladder is accommodated on the front or back terrace. The ladder is kept helical to occupy minimum of terrace space. The ladder is fabricated in steel. It has a central, tubular tower which is embedded in the ground or roofing. The helical steps have rings at their inner ends which are welded to the tubular column at equal vertical intervals and along a helix. Stainless steel: Stainless steel has different kinds like austenitic, super austenitic, ferritic etc. For gates and grills, austenitic steel is used. Though ferritic steel has better engineering properties than austenitic steel, it has lower corrosion resistance. Austenitic steel has its grades like 304, 316. 304 grade steel is good for use in gates, grills, railings etc. Weldable stainless steel has L suffixed to the grade of steel. Grades of weldable SS are 304 L, 316 L etc. Austenitic steel has 16 per cent or more chromium content that helps in avoiding rusting. SS screws: Glass is fixed to the gates and railings by using stainless steel screws. SS screws of ¾”or 1” diameter are welded to the mild steel components of gates and railings. Special electrodes are required to weld stainless steel. Normally, the gates and railing are erected in position at site and glass and wood are fixed to them at a later stage to avoid damage during construction. Therefore, don’t forget to collect the stainless steel bolts from the fabricator and store these safely for use at later stage. Welding electrodes: The steel work fabricators are habitual of using low quality welding electrodes for welding work. They won’t listen if you ask them to use a particular brand or quality of electrode. One should, therefore, insist on the use of good-quality electrodes at the time of assigning the job to the welder. It should be made clear that only the electrodes approved by you would be used for welding work. Look out for IS 814 marked electrodes only. Further, these should be freshly purchased, with recent date of manufacture. Electrodes that have been lying in the open in welder’s shop gain moisture from atmosphere and don’t produce strong welds. Choose a reputed brand and further check the brand carefully as many duplicate electrodes with matching names are available in the market. Welding finish: Ask the welder to do electric welding only. Gas welding doesn’t produce good welds and should not be allowed. Also ask the welder to clean the steel parts of all dirt, rust or grease before welding it. The size of weld depends on the thickness of members to be welded. When member thickness is 20 mm, weld size has to be minimum 6 mm. For 30 mm member thickness, weld size is 8 mm or more and so on. Weight: Ask the fabricator to inform you as soon as the fabrication work in his workshop is completed. Visit his workshop and get the fabricated steel parts weighed in your position. This is important because you have to pay him at the agreed rate of Rs per kg for this weight. Once he shifts the fabricated items to site, it won’t be possible to weigh them. Painting: Once the fabricated parts are brought to site and successfully put in place, ask your painter to paint them with red oxide primer immediately. Otherwise the steel work will get rusted within a week’s time. Grill design The grills chosen for the open-able portion of windows should mostly have vertical flats or square bars. The number of horizontal flats or bars should be kept as minimum as these flats invite dust which is difficult to clean on a daily basis. Floral designs should also be avoided. Simple grills having equally spaced vertical flats or bars with a horizontal member at top and another at bottom should be preferred.
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pick of the week
The price of decorative mirrors starts from Rs 70,000 and goes till Rs
150,000. Kitchen collection Price: Varies as per customer’s demand and size of the kitchen
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Harness positive energy of Navratras
With Navratras just round the corner, the excitement of the commencement of festival season is palpable everywhere. Most people in our country look forward to this time of the year and many make major purchases during this time. The period is also considered auspicious for repainting and rearranging the setting of house. According to religious beliefs, different incarnations of Goddess Durga visit the houses of followers and bless them with love, happiness and prosperity. These incarnations of the Goddess are believed to represent Shakti — the primordial cosmic energy. Navratras are also a good time to recheck the Vaastu of your home and rearrange the settings in different areas to make positive energy flow unhindered. Here are some of the things that you should do during this time:
If buying a new house Before buying a new house during Navratras, don’t forget to evaluate its good and bad effects and, more importantly, how the good effects can be amplified before moving in. For example, if the new house has a master bedroom in east or south-east portion, which is the zone of anxiety, you will not be able to relax in it and will have frequent disagreements with your spouse. However, if you place a sculpture of a pair of love birds in the zone of relationships, i.e., south-west, then you can restore love in your relationship. Similarly, your children get naturally inclined towards studies and do well academically if their study room is located in west or south-west direction, which is the zone of education. If reconstructing or repainting your house If you are planning to carry out some reconstruction or addition in the house, then you must refer to Vaastu guidelines and not extend just any direction as extension of house in certain directions is not recommended. For example, if the south-west zone of the house is extended, it will create instability in relationships and career. However, by using ideal colours (like yellow, as per the theory of five elements) the negative effect of an extended portion can be nullified easily without having to carry out demolitions. Likewise, if you are planning to repaint the house, then you should be careful in choosing colours. Even a perfectly Vaastu compliant house can become a house of negative energy if wrong colours are used in wrong direction. For example, if the living/drawing room, located in east or north-east zone, is painted pink, it will make the inhabitants lethargic. A shade of green there will attract more happiness and growth. If buying appliances and electronics Navratras is a good time to bring new appliances in your home. The objects in a house also exert a significant influence on one’s subconscious mind and life. When these are placed in an inappropriate direction, their negative influence is visible immediately. Ideally, a washing machine should be placed in west-north-west zone of your home. Similarly, an LCD and music system should be placed in east-north-east, microwave in south-east, and refrigerator in north-west zone. — The writer is Founder, MahaVaastu Group
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tax tips
A.The answer to your query is based on the premise that the agricultural land was covered within the jurisdiction of the municipal authority or was within such distance from the local limits of municipal authority as has been notified by the government. The capital gain arising on account of the compulsory acquisition would be exempt from tax subject to the fulfillment of the following conditions: In case you comply with the above requirements the capital gain arising on such compulsory acquisition would be exempt from tax.
Is capital gain computed on the basis of circle rate?
A.Section 50C of the Act provides that where the consideration received or accruing as a result of the transfer on the capital gain being land or building or both is less than the value adopted or assessed by any authority of state government for the purposes of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of Section 48, deemed to be the full value of consideration received or accruing as a result of such transfer. The information given to you is correct and the capital gains arising on the sale of your house will have to be computed on the basis of the circle rate if any, notified by the state government in case the consideration received by you is less than the value adopted or assessed for the purposes of the payment of stamp duty.
Is the insurance claim amount taxable?
A.In Vania Silk Mills Private Limited vs. CIT case the Supreme Court had held that insurance claim received on account of destruction of asset is not chargeable to tax as the destruction does not amount to a transfer. The judgement has been nullified to some extent by the introduction of a new Sub Section (1A) to Section 45 of the Act w.e.f. assessment year 2000-01. According to this Sub Section where a person receives during the previous year any money or other assets under any insurance from an insurer and the compensation has been received because of damage or destruction of a capital asset and such damage and destruction is as a result of following categories of circumstances: Then any profit or gain arising from the receipt of such money shall be chargeable to Income-Tax under the head "capital gains". The amount received from the insurance company shall be the deemed full value of consideration received or accruing as a result of the transfer of the asset. Accordingly in your case the amount received from the insurance company on account of destruction of factory building and
Should I rent my son’s two houses? What are the Income Tax liabilities in the following scenario: The above income would be included in the total income of your son and the total income would be taxable in case the same exceeds the maximum amount on which tax is not payable.
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loan zone
A.Getting a home loan is, no doubt, a lengthy procedure. However, simple it might look in the bank’s advertisement, the fact remains that there are a lot of hiccups in the entire process. Here are some of the points that you should be careful about in order to get money without any hassels: Rejection at the first stage Strange but true, many of the home loan applications do not pass even the first test. They are rejected outright due to incompatibility between the borrower’s qualifications and the lender’s requirements. It could be the age criteria, income criteria, proper documents not being submitted, the bank not being able to verify your details properly, not passing the field investigations conducted by the bank and many more. The best way to avoid being rejected in this way is to check the eligibility requirements of lending banks carefully and apply only to the bank that matches your profile. Keeping proper documents ready and providing accurate, verifiable details to the banks will ensure smooth sailing in the preliminary verification process. Processing fee not refunded With every application form for home loans, banks require about 0.25% to 1% of the loan amount to be submitted as the processing fees. This processing fee is generally NOT REFUNDABLE. In simple words this means that if the bank finds that you don’t deserve the home loan, this fee won’t be returned. This is the cost of applying for home loans. If in any case, the bank where you have applied states that it will refund the processing fees, it is better to get any such declaration in writing and make sure that the clause is enforceable. A verbal statement by bank authorities won’t be of any use. Desired loan amount not sanctioned The sanction of loan amount is based mostly on the repayment capacity of the borrower. Many consideration play a role in this. The monthly income, financial history, other unpaid loans with the borrower, past repayment record, credit card usage history, if any, bounced cheques, average balance with the banks, continuity in present employment, total years in employment, nature of employment etc. These factors are clubbed together to help the bank to decide whether it will be able to recover its money satisfactorily or not. If you get rejected due to any such criteria, then you can increase your eligibility by clubbing together your spouse’s, father’s, son’s or a relative’s income and make them a co-borrower. In addition to it, if you have sufficient funds in NSCs, provident funds, LIC policies etc. then you can keep them as collateral and ask the bank to finance your home loan. The interest rate dilemma Even after deciding on a particular loan regime, the home loan terms and condition fine prints can create havoc with your interest rates. For example even if a borrower has opted for a fixed rate home loan and the bank has promised him a rate, which it feels is good, the catch is in the fine print which authorises the bank to vary this fixed rate every two years, things can go worse for the fixed rate borrower. Similarly, if the bank doesn’t pass to you the benefit of lowered interest rates in floating interest rate regime, it will be of a little value. Avoiding such a situation essentially means that you study the terms and conditions of home loan carefully and clearly ask the bank about such things.
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vaastu wisdom
A.You can have this type of furniture in your bedroom, but don't allow outsiders in your bedroom and to use this furniture. Only family members should be allowed in your bedroom. Avoid having unknown persons in your bedroom as they may bring negative energy and spoil the married life. In earlier days, outsiders were not allowed in kitchen and bedroom or the room where ornaments or cash was stored.
Q.I have some confusion about the placement of windows in a home as some consultants have asked us to keep certain windows closed permanently. Kindly clarify the favourable directions for windows. — yana sinha A.A window is mainly a transparent or translucent opening in a wall that allows the passage of light and if not closed or sealed, air and sound. According to Vaastu windows, should be opposite to doors so that the positive cycles can be completed. This provides happiness and progress to the family. If there is any wrong placement of a door in a house, then the window should not be opposite that door as then the negative cycle will be complete and there is a possibility of negative results. Windows in northern and eastern wall towards northeast should be lengthy and wide so that air from northeast to north flows into the house. This air is good for the inhabitants. Air, light and sunlight flowing into the house from this window will develop energy and other related powers. Avoid having windows in southwest directions as it may harm the inhabitants. The number of the windows is also very important and there should always be an even number of windows (2,4,6,8) in a house.
Q.What is the importance of backyard according to Vaastu principles? — n.d bansal A.Backyard is very important from the utility point of view. According to Vaastu, if an east-facing house has a large backyard then the residents can suffer ill health, paralysis, unwanted headaches, bad name, enmity, defeats, restless feelings, insecurity, loss of confidence etc. If a south-facing house is having less space in backyard, then the residents may face health and financial troubles and tensions. If a north-facing house has a small backyard, then the residents will enjoy with money, good health, confidence. An east-facing house having less backyard space, is the sign of success, good health, money, name and fame etc.
Q.We have big family and have a five-bedroom house. Can you specify which room should be occupied by whom age wise? — swarn singh A.As you have a big family, there will obviously be members of all age groups. Considering that you have a five-bedroom house, here's how these bedrooms can be "allotted" age wise:
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The government is in the “reform mode” to bring a floundering economy back on track. A slew of reforms in different sectors were announced recently, some of these leading to strong reactions from different sections of society. The realty sector that has been suffering some rough weather for the past 12-18 months has been looking for a major thrust and reforms to be back in “business”.
Last month when the Union Finance Minister urged banks to pressurise builders to reduce prices of their projects, the developer lobby had retaliated with a demand for special incentives from the government to boost sales. They had cited the growing cost of land and construction material and high rate of interest on arranging finance for projects as the reasons for the high prices of residential units.
Besides tungsten, a number of gallery owners are lighting up art works with halogen lamps because of their longer lifespan and bright illumination. But Prabha Das is not upbeat about these and says, “The problem with halogen lamps is they emit heat. As a result colours of a painting can fade and the blues can turn into grays over a period of time.”
Railings: The railings provided to the front and back balcony, upper floor verandahs and the terrace are a combination of mild steel, toughened glass, stainless steel and wood these days. Very few house builders opt for stone-jalli railing. Though it looks highly attractive, it is very costly and accumulates dust which is difficult to remove. Mild steel and stainless steel framework railings look very attractive when optimum glass and wood coverage is added to them. Provision of glass for the full height and length of railing should be avoided. 
Blackberry has unveiled decorative mirrors of Italian collection, Riflessi. This collection of mirrors comprise Sibilla, Slalom Nero, Beatrice, My Life and most stunning Romantica mirrors with wide options for selection. It is the fine craftsmanship and edge on technology that makes these mirrors exclusive. The Sibilla range come with lighting framed in cherry, shiny white matt lacquer, gold leaf, silver or copper finish.
CUCINE LUBE, an Italian modular kitchens company, has recently come up with Asia’s largest modular kitchens showroom in Delhi (Sultanpur) and launched new range in modular kitchens. Based on a handle-less concept, Brava comes in various finishes such as veneer; high gloss lacquered, coloured glass, gold and silver foils on acrylic base. The unique hollowed profile of the door is laid out horizontally for base units and vertically for columns, making for easy handle free opening. The unique feature of this model is that it gives a very smooth, neat and straight line look.
Q.I had inherited agricultural land owned by my father in a village near Gurgaon. The same has been acquired by the Government of India for developing an industrial estate. What are the tax implications with regard to the compensation received/receivable from the government?
— b.l. khurana
Q. I had received an advance of Rs 5 lakh for selling my house in Gurgaon. I purchased a residential flat in Delhi. Now I have come to know that for the purposes of computation of capital gain, the circle rate will be taken as the rate for computing capital gain. Is the information so given to me correct?
Q.We are a partnership concern and are manufacturing nuts and bolts of various sizes. Due to a short circuit the factory building owned by the firm and machinery installed therein had been completely destroyed. We have received amount from the insurance company towards the claim filed on account of the damage. But we have been informed that the amount so received would be taxable. Is it correct? —
j.s. arora
Q.My son, who is an NRI, is likely to get possession of his flat in Gurgaon by December 2012. Another flat in Noida that is also under construction is likely to be delivered around March, 2013. The Gurgaon flat is financed by a bank loan and Noida flat is sourced from self funds.
A.Your queries are replied hereunder: Section 23 of the Income Tax Act 1961 (The Act) provides that annual value of any property for computing the ‘Income from house property’ shall be the sum for which property might reasonably be expected to let from year to year. It is further provided that in case the property or any part of the property is rented out and the actual rent received or receivable by the owner in respect thereof is higher than the sum for which the property might reasonably be expected to let, the annual value shall be taken to be the rent received on receivable. The Section further provides that in case a property or any part thereof is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner is less than the amount actually received or receivable, the amount so received or receivable would be the annual value. Andhra Pradesh High Court in the case of Vivek Jain vs. ACIT (202 Taxman 499) has held that in case where
Q.I am planning to buy a home early next year and will be taking loan for it. My acquaintances have told me to start the process with the bank early so that there is no problem in getting the money once I finalise a deal. What are the main problems that I am likely to face in getting a home loan sanctioned from a bank? — kavita wadhera
Q.Should we keep sitting furniture in the bedroom? — savita sharma.
