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Rising up to the flat culture
While the realty sector elsewhere in the country is in the grip of a slowdown, in Jammu the property prices have gone up considerably over the past couple of years. The city is emerging as a preferred destination of private developers as there is sufficient demand for housing units here. The city has good rail, road and air connectivity and is also attracting a large number of families migrating from the militancy-affected areas in the state.
Land a good deal
Agro farm project near Bangalore
tax tips
REALTY GUIDE
Realty bites
Ground
Realty
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Rising up to the flat culture
While the realty sector elsewhere in the country is in the grip of a slowdown, in Jammu the property prices have gone up considerably over the past couple of years. The city is emerging as a preferred destination of private developers as there is sufficient demand for housing units here. The city has good rail, road and air connectivity and is also attracting a large number of families migrating from the militancy-affected areas in the state.
Factors that are driving demand While years of strife and fear of terrorism had severely stunted the demand for housing in the winter capital of the state for a long time, the city also did not have much influx of well-paid professionals as there was virtually no major industry or commercial activity going on here. Most of the buyers were either locals or those from the nearby areas. “The current surge in property prices and demand for housing here is largely because of the migration of population from different parts of the state”, said a local resident. Over the past two decades lakhs of people have made Jammu their home, and this has lead to an increase in the demand for residential units here. People from Rajouri, Poonch, Kashmir valley, Doda, Bhaderwah and Ladakh are buying property in the city. After this large scale migration the land prices shot up and this boom attracted many big developers like Parsvnath, Ansal Housing and Royal Nest, who have all launched housing projects here. Big developers show interest Though Article-370 gives Jammu and Kashmir a special category status and offers non-state subjects little opportunity to invest directly in the state, major real estate developers have been investing crores of rupees in tie up with the local colonisers. Emerging trend Amid all this activity in the realty sector, the trend which is gathering steam here is the one for apartments in multi-storey buildings. Investors as well as end users are preferring flats due to the secure and well-planned ambience offered by these. A decade back housing colonies and apartments were alien concepts here and only J&K Housing Board was involved in the construction of residential flats, but now Jammu skyline is dotted with high-rise buildings. Although buyers are still conservative in their approach towards flats, the change is all evident as the cost of building independent homes has risen considerably and lack of civic facilities in the old city areas has made many families look for more planned options on the outskirts of the city. Banking institutions are also giving a major push by offering attractive loan facilities to those interested in purchasing apartments. The price rise A drive through Jammu, especially the outskirts, confirms that the city is fast turning into a vibrant metropolis. This has given a further boost to land prices. The price of one marla at Sidhra, Bhatindi, Sainik Colony, Bantalab, Top Serkhania that used to be around Rs 10,000 to 20,000 sometime back has now shot up to Rs 2 to 3 lakh per marla. The price range for apartments starts from Rs 30 lakh and goes up to Rs 50 lakh. Groups like Ansals, Grace Apartments at Sainik Colony, Royal Palms by Riddhi Siddhi Group, and Parsvnath Developers Ltd were among the first companies to have invested in the area. “Land prices in our village have shot up and there is a lot of change since the apartments have come up here. Some local developers are also now interested in retaining their land for developing planned colonies, rather than selling plots”, said Raouf Choudhary, a villager from the Bantalab area. The price escalation of property here is bound to be steep. With infrastructural developments taking place at a good pace, the city is going to be a perfect choice for traders and corporates in days to come. “City municipal limits have now grown from 32 sq km to 132 sq km and the population is expected to reach two million by the end of this decade. Apartment concept is the best as these societies are independent mini-towns”, said Rakesh Kumar of Koushal Infrastructure. The government is also giving a push to this trend. The Master Plan 2021 formulated by the Jammu Development Authority (JDA) also proposes setting up of plotted colonies with focus on private developers to construct multi-storey apartments. “J&K is an unexplored state and investment avenues in real estate here are vast. People here are more attracted to brand names and are buying flats in spite of having their own homes, which is driving the developers”, said Urja Singh, a housing consultant, who had earlier worked with Ansal Housing in Jammu. Though the completion of several projects has been delayed, the market sentiment is upbeat.
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Land a good deal
Where flats are traditionally the most sought-after type of investment property, the attraction of buying land for long-term and potentially higher gains has never lost its sheen. Flats are an inflexible format of property and this fences in the maximum value they can attain. Flats are snapped up in most cases, but at fixed residential prices dictated by prevailing market rates. Land is a very different ballgame.
No cakewalk However, investing in land is not as simple as it may appear. To begin with, there might be (and usually are) any number of legal requirements to meet and procedures to follow before a piece of land becomes a marketable item. Most buyers are aware of the difference between the Agricultural and Non-Agricultural (NA) categories - one can't put in a development of any magnitude on agricultural land. However, even if the land is clearly NA, one still needs clearance from the local authorities to build on it. Furthermore, one should not purchase land without any idea of whether it is included in some other developmental plan. For instance, the town planning board may have scheduled a highway to run through it, or allocated it to the building of some government structure. If this is the case, one may own a piece of land and still have no right to do anything with it - including sell it. In the case of highway construction or electrification, the owner may eventually wind up with a high-tension cable array perched in the middle of the plot, or a super expressway running through it. There is no getting around the government's prerogative of 'Eminent Domain'. This is a very real risk when we consider land purchase in one of the cheaper rural areas which are constantly being hawked on the real estate market. Anyone hoping to develop land will, in any case, require a building permit. Check ground realities A plot must have a clear title and be demarcated properly. Assuming that it has already been sufficiently developed to make it marketable, it still needs to be properly protected from encroachment. Plots gain value only over a period of time - if left unattended, other developments usually encroach on it and this raises legal problems that make the plot unmarketable for the duration of the legal tussle over it. Furthermore, no kind of property development involving even a minimal degree of inhabitation is feasible without a basic septic tank and drainage system. In other words, what lies underground is as important as what stands above it. If the plot is unsuitable for digging deep enough - unstable or extremely rocky soil could be possible reasons - one could be in deep trouble while trying to sell it. In fact, geologically unstable ground would mean that it can support no structure at all. The absence of sufficient ground water would also be a major drawback, especially in a resale scenario. It is a serious mistake to rely on municipal water supply alone, since this can be pretty sporadic in rural locations. The availability of electricity is another important consideration. Get expert advice Many buyers are under the mistaken assumption that it is not necessary to engage the services of a real estate consultant in the case of land/plot purchase. The fact is, only an expert can foresee all the complications that can arise with any kind of property, be it 'raw' or developed. Many sellers of developed plots have taken steps to avoid such problems for their customers, but one may still wind up with a 'dead duck' property if one buys it without knowledgeable guidance, or from an unknown property dealer. —
The writer is CEO - Operations, Jones Lang LaSalle India
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Agro farm project near Bangalore Realty firm WWICS Estates launched its 800-acre agro farm project, Imperial Farms & Orchards in Bangalore, earlier this week. The project having 32-35 farms of 25 acre each is located about 125 km from Bangalore near the Bangalore-Hyderabad stretch of NH-7. The developer will be providing fully developed farms with drip irrigation facility. The buyers can plant fruit trees and seasonal crops in the farms on hos own or outsource farming operations to the farm management team of the developer. The cost of land in this project will be Rs 4 lakh per acre for a minimum of 25-acre farm. The booking amount will be Rs 5 lakh, and 25 per cent amount will have to be paid in 15 days of booking. Next 25 per cent will have to be paid in 45 days of booking, while the balance 50 per cent will have to be paid within 120 days at the time of registration.
Terming the project as an opportunity for Punjabi farmers to own farms at much cheaper prices, Lt Col B.S. Sandhu, Chairman and Managing Director of the group said at the launch event in Chandigarh, “The project will provide an opportunity to farmers to consolidate their land assets and augment their income as under the assured return offer of the company they will be able to earn up to Rs 30,000 per year on each acre”. Terming the agro-farm project as the first step of the group in the Bangalore area, the MD said the group would also be coming up with a mixed-use project spread over approximately 700 acres near the Bangalore airport. This project will have studio apartments, cottages, villas, golf course besides a mall and multiplex. — TNS
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Tax on not accounted for money
S. C. Vasudeva ... Q.I plan to sell a plot. As happens in India, on selling it about 25 per cent of the sale amount will become unaccounted money. To deter the generation and use of unaccounted money, a provision in Union Budget 2012-13 reads as “Taxation of unexplained money, credits, investments, expenditure etc. at the highest rate of 30 per cent irrespective of slab of income”. In the light of this provision, kindly let me know, how and when will I be able to pay 30 per cent income tax on this unexplained amount. A.The Finance Bill 2012 has introduced a new Section 115BBE by virtue of which the unexplained money, credits, investments, expenditure etc., deemed to be an income under Section 68, 69, 69A, 69B, 69C or 69D of the Act, would be taxed at the rate of 30 per cent plus surcharge and cess as applicable. It has further been provided that no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provisions of the Act in computing the deemed income under the aforesaid sections. The unaccounted money if found to have been earned on sale of a property will therefore, be taxable @ 30 per cent plus the applicable surcharge and cess in the year in which the sale of the property takes place.
Under which Section can I claim rebate? Q.We (my husband and I) had purchased a plot about 10-12 years back. We both are government employees. In July, 2011, we jointly raised a loan from the bank to construct a house on this plot. The EMI for this loan is being paid by me from my salary account. My husband has retired in November, 2010. The construction work of our house has been completed and we are currently living in it. Kindly tell me under which Section of the Income Tax Act, can I can 100 per cent IT rebate on this loan repayment. — A. You would be entitled to claim the following deductions from your total income:
Q.A specified HUF was created about 25 years ago with me as Karta and my wife, my daughter and my son as other members of the HUF. My son and daughter were minors at that time. The assets owned by the HUF at that time were — a house, a residential plot measuring about 200 sq. yd and 10 acre agricultural land in my name and a 10 marla land in my wife’s name. My daughter and son were married about 20 and 10 years back, respectively. In the meanwhile, the residential plot in my name and 12 marla land in my wife’s name were sold and the 10-acre agricultural land in my name was gifted to my son and transferred in his name. The house is, however, still in my name. I would request you to please let me know about the present status of the above said HUF in the light of above circumstances / developments and clarify if the HUF has become defunct or is still valid. — Gurnam singh
Q.My mother sold some agricultural land. What are the tax formalities in this regard? Will she have to pay any tax on the sale proceeds? She doesn’t want to buy another land with the money and intends to give this entire amount to her sons. Will the sons have to pay tax on the amount received thus? — Santosh kumar yadav A.The capital gain arising on the sale of agricultural land is exempt from the leviability of capital gains tax if such agricultural land is not covered within the definition of the term ‘capital asset’. In accordance with the provisions of Section 2(24) of the Act agricultural land situated in the following areas is covered within the definition of the term ‘capital asset’:
The Government of India has issued a Notification No. 9447 (F. No. 164/3/87-ITA-1) dated 6.1.1994, specifying the distance for the purposes of the coverage of the agricultural land within (b) above. In case the agricultural land sold by your mother does not fall within the jurisdiction of a municipality etc. as per (a) above or is outside the limits specified in the aforesaid notification, the same would be exempt from the leviability of the capital gains tax. In case it falls within the specified distance or within the jurisdiction of municipality etc., the capital gain arising on such sale would be taxable. Any sum received on such sale can always be distributed by your mother to her sons to any extent and in the manner in which she likes as there is no gift tax leviable in the country on such distribution. I may add that such distribution should be made after the payment of capital gains tax if any, leviable on account of such sale. Q.Kindly advise on the following issue:How much and under which Section is rebate in respect of assessed income is admissible on the payment of interest on home-loan taken from a nationalised agency as “loss of income”. Whether such deduction is allowed by the employer itself, if so, how assessee may reflect in his ITR. You can file the particulars of your income from house property with the employer and request the employer to take such income/loss into account for the purposes of deduction of tax at source. However, such income/loss will have to be reflected under head “income from house property” in the income tax return.
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Do I need to make a conveyance deed?
B K Sanghi Q.I had purchased a 10 marla plot on GPA two years ago in Sector-26, Panchkula and got the possession of the plot from HUDA. Now, I want to sell this plot and a property dealer had told me that for selling the plot, I would need to make a conveyance deed in favour of the original allottee first and then sell the plot by making a sale deed in favour of the purchaser. Is this the right procedure? Do clarify as I am not clear about the difference between sale and conveyance deeds. —R.k.sharma Conveyance deed records the transfer of interest in immovable property. The conveyance deed in the immovable property may take place by way of sale deed, gift deed, exchange deed etc. Generally, government’s property is transferred through conveyance deed in favour of an allottee. After making a conveyance deed you can sell the plot and be able to make a sale deed in favour of the purchaser. A sale deed acts as the main legal document for evidencing sale and transfer of ownership of property in favour of the buyer, from the seller. Further, it also acts as the main document for further sale by the buyer as it establishes the ownership of the property. The sale deed is executed subsequent to the execution of the sale agreement, and after compliance with various terms and conditions detailed in the sale agreement as agreed upon between the buyer and the seller. The sale deed is the main document by which a seller transfers his right on the property to the purchaser, who then acquires absolute ownership of the property. Conveyance and sale deeds essentially have no difference as in both the documents the right, interest and title of the previous owner is transferred to the purchaser. Q.I want to purchase a constructed house within the municipal limits of Rohtak. However, I have found out that the colony is yet to get the required clearances. According to the current owner the colony is likely to be regularised by the Haryana Government soon. I want to know whether there is any legal provision through which such colonies be regularised? Should I go ahead with this deal? Surinder ahlawat A.It would be a risky proposition to put in your hard-earned money in this “illegal colony” as the matter of the regularisation of such colonies is under the scanner of the Punjab and Haryana High Court. The price being offered by the seller may be less than that in the regularised colonies but the fate of such colonies still hangs in balance all over the state. On August 29, 2009, the Haryana Council of Ministers had taken a decision to regularise the “illegal colonies” situated within the municipal limits according to a government policy. The regularisation of such colonies was to be done keeping in view public interest, welfare of the people and other aspects such as financial and legal implications. Subsequently, all the Commissioners/ Deputy Commissioners of Haryana were requested to identify the unauthorised colonies and send their recommendations to the government. They were also required to get the resolutions passed by the municipality concerned for the regularisation of unauthorised colonies. On the basis of this various municipal corporations in Haryana submitted proposals to regularise a total of 548 unauthorised colonies. However, in August this year, the High Court came down heavily on the Haryana Government for giving benefits to “law breakers” and questioned its policy under which unauthorised colonies were to be regularised. “The question arises whether a law breaker can be allowed to take benefit by getting his illegal construction regularised under the garb of a (government) policy and whether such a policy can be sustained, the High Court had said in its order. The orders came in an ongoing case filed by residents of the Friends Colony, Rohtak. Subsequently, the Friends Colony was also declared illegal by the High Court. In view of all these facts it will be wise on your part to rethink your decision.
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Realty bites
The State Bank of India has done away with the 25 basis points mark it used to charge retail customers taking a loan to buy a third or a fourth house. India’s largest bank has taken this step in keeping with its thrust on retail loans, especially home loans, as corporate loan growth has turned sluggish.
SBI’s current card rates on home loans are: 10 per cent (that is 25 basis points above the base rate: 9.75 per cent) for loans up to Rs 30 lakh and 10.15 per cent (40 basis points above the base rate) for loans above Rs 30 lakh. A basis point is equal to one-hundredth of a per cent. Banks normally charge customers a premium (higher interest rate) if they take a loan to buy a house for the third time. However, under the current regulatory dispensation, the customer is considered as owner of two properties and loan given by banks for the third property is reckoned as commercial real estate exposure. The decision to give a loan to buy a house, be it the third or the fourth, is solely based on the borrower’s income and ability to repay. If the customer has repaid two earlier home loans diligently, then the probability of default goes down significantly and the customer could be considered a safe bet for the bank. Customer initiative at SARE project SARE Homes is offering a possession-linked scheme for Petioles in Sec 92, Gurgaon. The possession linked concept has been announced by the SARE Homes to facilitate home buyers to own their dream home in a hassle free manner by making 60 per cent payment on possession, with a commitment of on-time delivery. Developed on a sprawling 48-acre integrated township, Petioles consists of 4 BHK and 4 BHK + servant room apartments with the area of each apartment in the range of 2,040 - 2,226 sq ft.
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Flawless fit
Jagvir Goyal ...
Care for the hinged side: The carpenter has to keep in mind the hinged side of each door and window shutter while fabricating them. Some shutters have different designs on the inside and outside faces. When one-side-teak plywood is used in the panels, design is added on the non-teak face of panels. In such cases, decide the hinged side of shutter at the fabrication stage itself. Hang on correct side: When the house is in use, paneled doors remain open and the wire mesh doors are in closed position. Care should, therefore, be taken that all paneled doors open against the wall. Doors not opening against the wall hamper movement of the residents. In such cases where the door frame is not adjacent to wall, the hinged side of doors should be carefully decided. Same side hanging: In double rebate frames housing paneled and wire mesh doors, unless otherwise required, both the paneled as well as wire mesh shutters should be hung on the same side of the frame. In exceptional cases, this condition can be altered to allow easy movement of residents. Kitchens having a door opening in the back verandah may sometimes require hanging of the two shutters on different sides. Also, when the doors to two different rooms are adjacent to each other but at right angles, opening of one door may block the entry to other room. In such cases, too, the hanging of doors has to be decided carefully at site. Centrally placed doors: Preference should always be given to position a door frame next to the wall so that the doors could open against the wall. However, in certain cases, this arrangement may not be available. In such cases, the door should be made to open at 180 degree instead of the normal 90 degrees. By doing this, the door, after opening, can be rested against the wall in which it has been fixed and shall not stand protruding at 90 degrees. Duct doors: The toilets in a house should essentially have the external wall as one of their four walls so that proper light and ventilation could be provided in them. Sometimes, the toilet has to be positioned inside the house where no external wall is available. In such cases, a duct is planned adjacent to the toilet to provide light and ventilation to the toilet. Such ducts often have a door opening to the living room. The door shutters of this duct opening should be carefully hung. Preferred position will be to keep the paneled door on the outer side and wire mesh door on the inside. Otherwise, the frame should be kept as single rebated and a glass door should be provided in it. WIC doors: The present trend is to provide a walk-in cupboard attached to each bedroom. The doors to these walk-in-cupboards should preferably be kept as sliding to make best use of the space inside the WIC. The position of sliding doors should be carefully marked to allow wall space for the slider. Providing an open-able door to WIC will eat up space equivalent to a quarter of a circle of door width radius and WIC will barely serve its purpose. Select the hinges carefully: The hinges used for hanging door and window shutters should be of right material, size, thickness and brand. Stainless steel hinges should be preferred over mild steel hinges. Size of hinges should be 4 inch or 5 inch for doors and 3 inch for windows. Thickness wise, hinges should be of heavy quality and of not less than 12 gauge. Many reputed brands of stainless steel hinges are now available and one should be finalised after making enquiries about their reputation and cost. Placement of hinges: The doors should be hung on 3 hinges of 5 inch size or 4 hinges of 4 inch size. Window shutters can be hung on 2 or 3 hinges of 3 inch size, depending upon the depth of window shutter. In case a door shutter is heavy in weight due to use of high quality teak wood, an additional hinge may be provided in the top portion. While providing 3 hinges, one should be kept at the centre while the other two may be fixed at 8 to 9 inch distance from top and bottom. Make recess: Take care that door and window hinges fixed on the frames are sunk into the frames and not fixed on the surface of the frames. If the hinges are fixed without making recesses, shutters will not open fully. Ask the carpenters to make recesses in frames of depth equal to thickness of hinge plate so that hinge surface is flush with the frame surface. Similarly the second plate of a hinge should be sunk into the shutter to make it flush with shutter edge. Choose screws carefully: The screws used to hang door and window shutters also need attention. Poor quality screws don’t have good threading and lose grip very soon. Screws used should be of stainless steel and of a reputed brand. The size of screws shall be given by the carpenter and he should even define their exact numbers as each screw costs Rs 1.25 to 2. Extra screws purchased are mostly accepted back by the hardware shops without fuss. Slotted counter sunk head screws should be preferred as these will not protrude beyond the hinge surface. Screw sizes are defined as 30 x 8 or so. A 30 x 8 screw means a screw of 30 mm length drawn out of 8 gauge wire. For door shutters, 1.5 inch length screws are preferred while for window shutters, 1.25 inch screws can be used. Choose right length of screws as too long screws may tear apart lesser thick wooden members. Make first trial: After first two grindings of marble flooring or fixing of tile flooring, the door shutters should be given a trial by hanging them in position in all door frames. Ask the carpenter to devise a marking code so that he knows which shutter is to be hung in which opening. After the trial hanging of shutters, the carpenter will come to know if the shutters fully sit in the rebate or bulge out somewhere. The gap between the frame and shutter on all three sides should also be checked. A 3 mm gap between the shutter and floor should be sufficient unless carpets are to be fixed on the floors. The shutters should rest flush with the frames. A bulging shutter may be due to non-fixing of frame in plumb or its warping or a defect in the shutter. Ask the carpenter to set them right. Use few screws for trial: Ask the carpenter not to drive in all the screws in hinges during trial hanging. Just two screws per hinge should be sufficient. Driving the screws in, their removal and re-fixing at a later stage may widen the screw holes, thus making the shutters hang loose. — This column is published fortnightly
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In a growth sector with new market drivers coming in, investing in a plot of sufficient dimensions and the right kind of authorised usage criteria for the area can become attractive to developers from the residential, retail, office and hospitality sectors. As an area attains more or more market drivers and begins to saturate, plots increase in value manifold and can be sold on a seller's, not a buyer's market. Also, land is cheap in most cases and represents a very good capital investment. 
A. An HUF once created can’t be considered as defunct until and unless the same has been partitioned. The partition
can be oral as well as in writing. The properties which are listed in the query having been thrown into a common stock would continue to remain the properties of HUF till such time a partition of HUF takes place. The sale proceeds of any property sold would also be treated as part of HUF assets. The agricultural land owned
by the HUF could not, therefore, have been gifted by you to your son as a father under Mikashara law has no power to alienate joint family property. He cannot dispose off any HUF property. He cannot dispose off even his own interest therein by a gift. The present status of HUF is that same is still in
existence and would continue to be owner of the properties thrown into common stock as well as the amount realised on the sale of HUF assets.
A.Interest on home loan taken for the construction or purchase of a residential house is deductible under head “income from house property”. The deduction is allowable under Section 24 of the Income-Tax Act 1961 (The Act) under the above head to the extent of Rs 1,50,000 in case the house constructed or purchased is occupied for self use. The aforesaid limit is not applicable for the allowability of interest in case the property is let out. In case there is a loss under head income from house property on account of claim of such interest, such loss can be adjusted against the income from any other head or if it is not wholly set off against income from any other head, the same can be carried forward for a period of eight assessment years immediately succeeding the assessment year for which the loss was first computed.
A.Yes it is the correct procedure. You should get a conveyance deed made in favour of the original allottee from HUDA to clear the title of property.
Fabrication of wooden door and window shutters is a highly skilled job. The doors may look similar from a distance but a closer examination tells you the degree of skill, the carpenter possessed. Equally skilful has to be the job of erecting them in position. Little carelessness shown in it could lead to ill-fitting, loose doors and windows that will become a source of permanent inconvenience for the user. Here are certain aspects to that you should be aware of in order o get the right fitting: