Area watch: Meerut
The connectivity factor
Vivek Shukla

With the recent inclusion of three more districts in the elite NCR club in order to ease the pressure on the national Capital, a very pertinent question being raised is whether the NCR cities will get fast and good connectivity with Delhi?

Connectivity, in fact, is one of the major factors that drive the real estate growth of any area by bringing in more and more people to inhabit the new developments. In this regard, however, the report card of many NCR towns is very poor. For instance, take the case of Meerut. It has been a part of the NCR for the past several years, but the connectivity between Delhi and Meerut, which is arguably the most important city of Western UP, is appalling.

“Commuting daily between Delhi and Meerut is nothing short of a nightmare”, says Delhi-based senior journalist Sanjay Srivastava who owns a spacious apartment in Meerut but is currently living in a rented accomodation in Noida. “I would definitely like to shift to Meerut sooner rather than later, but commuting there on a daily basis is a huge issue. While it is barely 70 km from Delhi, it takes not less than three hours to reach Meerut. With strict deadlines of my job, I can’t travel for six hours daily,” he adds.

“While it is true that Meerut has good schools, markets, hospitals and a thriving sports-goods industry, it is still not going to the next level due to poor connectivity it has with Delhi,” says R.K. Arora, MD of Supertech.

“If you talk about the NH-58 from Delhi to Meerut, you would realise how bad it is with congestion all around. It passes through Ghaziabad, Muradnagar and Modinagar. With Kanwariya time is on, it is really difficult to use this highway. Till it is not widened and super-fast train start operations, things look really bleak for Meerut,” says Shahid Chaudhry, a Meerut-based journalist and writer.

Demand keeps hope up

In spite of bad connectivity, it is the demand-supply equation that has been keeping the realty prices buoyant in Meerut. “In spite of bad connectivity, the prices have trebled in the past two years in Meerut. The main part of the city is highly congested and suffers from infrastructure and crime-related problems. But, there is great demand for quality housing on the outskirts. One of the most favoured locations is along the Meerut bypass”, says Devinder Gupta, MD of realty advisory Century 21 DGS.

“Meerut offers a cost-effective option to people who can’t afford to buy an apartment in Delhi but want to remain near the city. The price of residential units in the secondary market ranges from Rs 1,800 per sq ft to Rs 2000 per sq ft.,” says Sunil Jindal, CEO of SVP Developers.

The game changer

However, the recent decision of the Union Cabinet to approve an ambitious plan to run high-speed trains between Delhi and Meerut has brought some hope for people like Srivastava who wish to shift to Meerut or have property there. The Cabinet has approved the setting up of a company —National Capital Region Transport Corporation (NCRTC) — to execute the Rs 78,000 crore Rapid Rail Transit System (RRTS) that will cut the travel time between Delhi and the Meerut by half.

The trains will cover a distance of 90 km between Delhi and Meerut in 63 minutes. This will be the first phase of the RRTS that is expected to become operational by 2017.

It goes without saying that Meerut will witness a boom in the real estate market as and when fast train will be operational and large number of Dilliwalls will seriously think of shifting there. Meanwhile, developers like Supertech Group, MSX Developers, Era Group, Antriksh, Majestic Properties, Ansal Housing & Construction, Parsvnath, DLF and Omaxe either already have projects there or are planning to launch new ones.

Other factors

Power and water supply are some of the other factors that a homebuyer looks at before investing in a particular place and in most of the NCR towns the power and water situation is very bad. Meerut, too, has seen bad days but according to the authorities, Meerut is likely to have better power supply as the high transmission line of the Power Grid Corporation between Agra and Meerut was put on execution mode after a long wait recently. The 765 KV single circuit line will boost the power infrastructure in Meerut as well as in major parts of the NCR. Hopefully, it will help improve the power supply to the industrialised areas, besides providing power to the residential areas.

It is high time that the stakeholders make an all-out effort to improve the road and rail connectivity between Delhi and Meerut as well as other NCR cities without wasting any time. In the absence of efficient connectivity, the goal of NCR region will remain on papers. In nutshell, one can say that with good connectivity, real estate thrives in Meerut.

Yamuna Expressway shows promise as investment zone
Rohan Sharma

The Yamuna Expressway offers large land parcels, and with it becoming operational it is expected to act as a magnet for real estate development projects. The expressway is 165 km long, originating from Noida, touching Greater Noida, it goes till Agra.

Its proximity to both Noida and Greater Noida — which are established towns — is expected to spur additional developments as well. The current development is ‘ribbon type’ and is expected to pick up momentum. With land availability in Noida becoming limited, this stretch will act as the next node for large-scale developments such as integrated townships and logistics and warehousing hubs.

The NCR is constantly expanding beyond its peripheries, and the Yamuna Expressway has opened up a new area of development along its length. With connectivity to Agra, which is a major tourist spot that is being further enhanced, and travel time reduced considerably, the expressway has already attracted major developers who have announced township and residential projects. With the operational Formula 1 race track and upcoming facilities like Jaypee Sports City project, Night Safari, it will be the source of next wave of development that will expand the city boundaries.

Currently, enhanced connectivity is the only infrastructure-related advantage for this location. However, Noida is a major attraction for real estate investments in the state, and this will encourage the government and its various authorities to provide better amenities in this region. The advantages of proximity to Noida and Greater Noida will also add to the attraction. The proposed Delhi-Mumbai Industrial Corridor expected to pass through Dadri will also boost development of warehousing and Special Development Zones along the expressway. Last year, the region suffered a lull with land acquisition issues that plagued projects in Noida and Greater Noida. However, residential prices in this corridor are still among the lowest compared to other parts of NCR. Hence, for investors there is larger scope for appreciation.

Residential apartment prices have remained largely stagnant since the expressway completion, with projects further down this stretch launched at lower prices as well. Residential plot prices have also remained relatively stable over the past year, after showing a 35-40 per cent appreciation initially. With the expressway operational, appreciation is likely to show an upward trend here, though the other established residential corridors in NCR may cause such appreciation to be slower.

For end-users, low price points with projects by major developers present a viable opportunity. Also, this region has a few township projects announced, and with ancillary developments like Jaypee Sports City and Gautam Buddha University coming up along with other social infrastructure projects, this region is expected to turn into a large-scale residential hub with good amenities. It also has a few developers launching plots and villas as part of their township projects, and these are relatively affordable. End users can look at these as suitable opportunities for second/holiday homes.

The writer is Manager, Research & REIS, Jones Lang LaSalle India

Decor trends
Dress up your walls
Let your walls be an intrinsic part of your home décor
Belu Jain Maheswari

Most people visualise interior décor once the construction work is over, but the fact is that the planning of interiors has to start at the time when the architectural designs are being formulated. If it is an old building, then you have to factor in the existing features and then design the room. The walls and the windows are as much a part of the interiors as are the rugs and furniture. In fact, the walls tell their own story; they are no longer mute spectators in the room, only providing, privacy. The walls from the time man started making an abode, were the first thing to be constructed. The rocks of the cave became the first walls, and then wood planks were used to separate the outside from the inside. This was followed by the use of mud; thatch was used to make walls. Bricks made of clay have been around for thousands of years, Sumerians made the earliest bricks. With technological development, construction material became more sophisticated; rocks were cut and joined together with cement.

In contemporary times, new products are being used along with the traditional and time tested products to make walls. Brick making has reached a very sophisticated level, you have baked bricks in brick kiln, along with engineered bricks, made of polythurene material, some of the engineered bricks are very light. Another change is houses being constructed on pillars. In this sort of construction walls are added latter on. This provides the flexibility to use material suited to the needs of the user and the weather conditions. The walls can be of particle board, saw dust board, plain wooden board or of bricks. These can be easily shifted and contours of rooms can be changed easily.

In India, apartment construction is on plinths and pillars, walls are added later but for houses most people still go for the old-fashioned way of construction, with brick walls put together with cement. The cladding of the wall can be done in many different ways, the most popular is plastering with cement. We can experiment with walls, use old techniques like mud, straw, mixed with cement and a little colour can be added to make the wall look like a hut.

This should be normally done in a special room or veranda, inside it could be done on one wall to make a statement but this sort of a wall should be used if the concept is ethnic, this can not be mixed with a contemporary design. Another way of giving a wall character is with the use of natural dyes, make designs on the walls and also paint the walls, this is more eco friendly as no chemicals are used but this again has to be done on a specific wall. I have seen haldi (turmeric) used with paint and fevicol, which is plastered with a knife on the wall but this can only be, where an individual looks after the home as any seepage will destroy the walls permanently.

If a wall is made of wooden planks, then the acoustics have to be kept in mind, because every sound is magnified from inside and outside, that is why in countries like UK and Japan, we find it irritating because all sound reverberates. Wood for walls or for cladding should be used in the cooler climes.

We can have real fun making our walls speak. One material commonly used, especially in the western countries is wall paper. It comes in varied designs, for a nursery you can have nursery rhymes written on the paper or have animal designs or flowers. It is easy to handle, it has instructions for ‘Do It Yourself’, it is easily cleaned with a wet cloth. Areas which are used a lot can be wall papered; market has many brands, textures and design of wallpaper from reasonable to expensive. Then mechanised bricks can be used as cladding, these come in many colours, deep red, maroon, mud colour, yellow, brown, the bricks can be painted to any colour. If you keep the natural colour of the brick then you don't have to take the hassle of painting it. Other materials used nowadays are fibre glass, polystyrene, gypcrete, and insulated concrete.

There is a great demand for old bricks which are being taken out from old buildings. These are being used as wall cladding to give a different look and feel. Stone is another cladding being used on walls especially if you are making niches and arches or covering the pillars. It is also used as skirting to keep the wall clean while sweeping and mopping. The Mediterranean or even the Rajasthani look comes from the use of stone on the wall. We have a huge variety of Indian stone, which looks and feels good.

The old-fashioned paint on wall is used the most, the market is again flooded with different types of paint, the commonest and cheapest is lime, then a little better which does not come off that easily is distemper in every shade, then plastic paint, better than that is deco paint or enamel. Walls are being beautifully decorated, designs are made with POP, stencils are being drawn on walls. There is use of metal sheets like brass, copper for cladding the walls. Mirrors are also used to clad walls to give more depth and a feeling of space. The walls need not be square or rectangular, these can be given a curve. In many countries, walls are made of rammed earth or adobe which look great.

Walls are not only for providing privacy, these are part of beautifying a room, different colours can be used on different walls, toning of colours can also be done, lighter on top , darker on the lower side. Most of the old art, figurines were made on walls, like Madhubani, or even Ajanta and Ellora paintings. Let your walls be an intrinsic part of your home decor. Prepare the designs of the wall when designing the house. Remember, these walls will be your companions for life, these will be part of your life and family, think about them in detail and love.

Launch pad
Sikka makes foray into luxury real estate

Real estate group Sikka made foray into luxury real estate recently by launching Sikka — The Downtown, Noida, in Sector 98, Noida Expressway. With this launch, the organisation has strengthened its footprint in North India having successfully launched projects in Delhi/NCR .

The project will offer high-end retail spaces, state-of-the-art corporate suites, branded residences and luxurious five-star hotel, to be managed by an international chain. Spread over an area of 12,000 square metres, the project will be overlooking Golf Course, with only 30 per cent ground coverage, ensuring abundance of greens. Targeted at the urban young who aspire to own luxurious hotel-like rooms, the branded residences will be available in one, two and three bedroom residencies.

Trade Centre project in Noida

Urbtech India Developers recently launched Urbtech Trade Centre in Noida, near expressway in Sector 132. With state-of-the-art office spaces, business suites, the new trade centre promises to combine work with leisure by offering a club, gaming zone and swimming pool. The trade tower will be equipped with fully operational workplaces, state-of-the-art security systems, high-speed Wi-Fi and Internet facility to make it a future-ready workplace.

Urbtech has been designed in such a way that it not only provides an amazing business environment but also enhances output as well. The Plug In and Virtual Offices are based on this concept. The first of its kind, it takes working atmosphere to a whole new level, adding flexibility to job efficiency.

Godrej Interio partners with Sushma Group

Godrej Interio has partnered with the new-age builder Sushma Group to introduce premium designer homes at Sushma Chandigarh Grande. The alliance between both the groups is intended to upgrade the lifestyle of their clients.

Sushma Group offers credibility and quality to discerning customers. The company has grown to become one of the leading developers in Punjab. Godrej Interio is a well-recognised brand across globe for its unique ideologies delivering well-designed, state-of-the art, quality-living solutions.

The strategic partnership between Sushma Group and Godrej Interio shall bring in new era of living wherein a client would experience the luxury and class. “The vision of the group has always been to deliver the best. Through this thoughtful association, we intend to offer the true-value to our esteemed clients,” says Bharat Mittal, Director of Sushma Group.

The plush 3BHK, 4BHK, garden apartments and penthouses at Sushma Chandigarh Grande are designed for the best living experience, bringing together the skills of finest architects, engineers and landscape designers. Resonating the Godrej Interio mantra of functionality and minute intricacies, the partnership sets a new benchmark in world-class living, as a lot of thought and planning has gone into creating the apartments that are smart and functional.

Realty bites
Real estate sector to contribute 6.3 pc to GDP

A joint report by CBRE and CREDAI titled “Assessing the Economic Impact of India's Real Estate Sector” was released by Girija Vyas, Minister of Housing and Urban Poverty Alleviation, at the inaugural session of Natcon 2013, CREDAI’s flagship real estate event, held in Moscow recently. This special research report provides a broad view of the extent of economic opportunities generated by the real estate and construction sector in the country. According to research, India’s real estate sector is estimated to have a total supply pipeline of close to 3.6 billion sqft lined up for completion in the year 2013, with about 98 per cent of this being concentrated in the residential segment.

The Indian real estate and construction industry is an integral part of the economy and plays an important role in the development of the country’s infrastructure base and is one of the largest generators of economic activity. The construction sector has strong linkages with various industries such as cement, steel, chemicals, paints, tiles, fixtures and fittings, etc.

Anshuman Magazine, chairman and MD, CBRE South Asia Pvt. Ltd, says, “The potential for development and growth in the real estate sector is tremendous. It is expected to generate over 17 million employment opportunities across the country by 2025, thereby making a significant contribution to the GDP. However the industry does require the support and encouragement of policy makers in order to achieve its goals.”

Lalit Jain, Chairman, CREDAI and CMD, Kumar Urban Development Ltd., adds, “ The report portrays the conservative status of the sector’s contribution. For the first time a detailed attempt has been made to give facts on its importance in terms of GDP, industrial production employment opportunities. Prospects of the sector has potential to accelerate growth. The projection given can be accelerated if reforms are implemented.”

India has witnessed strong economic growth in the last decade primarily on account of economic reforms that ushered in an era of liberalisation and provided for increased participation from the private sector. As per the report, the total economic footprint generated by the construction of this real estate pipeline will require a total investment of about Rs 2,54,000 crore, and it will help generate revenues worth Rs 3,70,000 crore and provide employment to about 7.6 million people across the country in 2013. The total contribution of the real estate sector to the national GDP has been estimated to be about 6.3 per cent in 2013 alone.

Assotech Realty to construct 125 luxurious suites in Shirdi

Real estate firm Assotech Realty has announced a premier service residential project with an investment of Rs 100 crore in pilgrimage town of Shirdi in Maharashtra.

“The project named as 'Sandal Suites' will provide the comfort and luxury at an affordable cost and also the investment opportunity,” Assotech Realty managing director Neeraj Gulati said.

The New Delhi-based company has completed acquisition of 2.5 acres of land for the project, which envisages building 125 elegantly designed suites in the vicinity of the famous Shirdi shrine.

Among amenities to be provided at the project are a small temple of Saibaba, a meditation hall, a yoga centre, swimming pools and other facilities.

Gulati said a small shopping area, a concierge and a travel desk will be constructed for residents of ‘Sandal Suites’, besides vegetarian restaurants for visitors.

The project is likely to be completed by 2016. — Agencies

Need for low-cost houses a big opportunity

Low-income urban families need 15 million homes in a price range of Rs 4-10 lakh, presenting an untapped opportunity of a whopping Rs 9 lakh crore for real estate developers, according to a report by Deloitte India.

At least 30,500 housing units were launched below Rs 10 lakh by private developers across 22 cities between June 2011 and January 2013.

There is an increased interest in supplying housing and housing finance to low-income customers but the gap between supply and need is huge, according to the report ‘State of the Low-Income Housing Market’ launched by Housing and Urban Poverty Alleviation Secretary Arun Kumar Misra.

“There is a large proportion of low-income urban families, with a monthly household income of Rs 10,000-25,000, who can afford privately build formal housing costing Rs 4-10 lakh without any aid from the government.

“There is an estimated demand of 15 million homes from these low-income customers, which translates into an opportunity of Rs 9 lakh crore for developers and Rs 7 lakh crore for housing finance companies,” Deloitte said.

The housing finance, which was almost non-existent for these low-income customers 5 years ago, is now accessible with over 10 housing finance firms lending to low income customers.

The report highlighted that three cities — Ahmedabad, Mumbai and Indore — are leading in providing housing below Rs 10 lakh with over 20 projects in each city.

“The western and central states of Gujarat, Maharashtra and Madhya Pradesh are doing better than the rest of the country. In the northern region, there is a limited LIH supply,” the report said.

Out of 30,668 homes launched during June 2011 to January 2013 period, Gujarat witnessed maximum supply of 11,823 units followed by Maharashtra and Madhya Pradesh with 8,513 and 4,759 units, respectively.

Asked about the reason for Gujarat being ahead, co-author of the report Ashish Karamchandani said: “Developers in Gujarat had entered in the low-income housing earlier. Also, the approval time for projects is faster.”

Sustainable structures
Bhawna Jaimini

Sustainability is a term that made waves after the 1973 oil crisis. The oil crisis exposed the fact that oil is non-renewable resource and it will deplete in the years to come thus leaving a need to look for more renewable energy options. The idea of sustainability is to ensure that our actions and decisions today do not inhibit the opportunities of future generations.

Architectural sustainability works on the same principle by taking account of energy conservation, resource depletion by optimising the use of building materials, reducing water consumption by rainwater harvesting and promoting the usage of recycled wastes. To make sustainability a mainstream phenomenon in the construction sector, various agencies are working on low energy models and guidelines to build “green” and “sustainable” buildings.

However, since these agencies are based in the West, these tend to do more harm than good. For example, building an all-steel and glass building in the West is justified as the weather is cold and there are few sunny day, but the same kind of building is not suitable in the Indian climate as huge glass facades will accumulate more heat inside the building thus putting more pressure on the air conditioning system and increased consumption. In India, where 70 per cent of the construction is residential, it is important that the idea of sustainable development should resonate with every Indian household instead of being confined to only big commercial buildings.

Steps towards sustainability

Various architects and NGOs are working towards the goal of making sustainable development a conventional phenomenon with the masses of the country. Stress is being laid on incorporating building practices, appropriate technologies and building material rooted in our system rather than going for technology based solutions.

Efficient Design and Planning

The climate and the physical conditions of the site should determine the orientation of the building and further internal planning. With proper orientation of the building, the need of heating or cooling in the building is minimised thus reducing the dependence on energy such mechanical cooling or heating systems.

The design should optimise the use of day lighting by providing large enough windows so that no artificial lighting is required during daytime. Windows also lead to accumulation of heat during peak summer months inside the building that can be tackled by provision of shading devices such as chajjas and blinds designed to cut solar radiation during summers but allow it during winters.

Glazing on the southwest facades of the buildings should be avoided as that receives maximum radiations. The colour of the external surface of the building should be painted in light colours as dark colours absorb more heat. These days heat reflective paints are available to minimize the impact of solar radiation falling on the surface.

Low-embodied energy materials

There is a need to shift focus from the conventional building material like fired clay brick that consumes high energy in its processing and manufacturing, and further depleting the top soil layer. Fly ash is a toxic material produced in several tonnes as a by-product mainly in thermal power plants of India and poses great threat to the environment in its crude form. However, when it is mixed with lime to produce bricks, it becomes non-toxic. Fly-ash bricks are emerging as popular alternative to conventional bricks and their usage is gaining momentum with the builders and engineers because of its strength, durability and the fact that it uses less mortar for bonding.

Water conservation

India is still a monsoon driven economy and faces acute shortage of water. Thus, it is of utmost importance that water wastes should be next to zero. The buildings consume water at both construction and operational phase. At the construction phase, efficient management can avoid water wastes by selecting materials and practices using less water. At the operational phase, both the user and the designer of the building should make efforts to reduce water wastes. For example, rainwater-harvesting techniques should be employed to reduce run-off of rainwater and saving it for future use. Sanitary fixtures that use less water should be given preference. Wastewater from the residences can be recycled and used for flushing and for horticulture.

In homes with garden and landscaped areas, pervious materials should be used as ground cover as they facilitate ground water recharge. Also, waterscapes and fountains should be suspended in summer months when there is an acute shortage of water.

Tapping sun’s energy

With more than 300 sunny days in the country, it is essential we shift our focus to solar energy for our day-to-day needs. Many cities in India like Bangalore and Pune have made it mandatory for buildings to instal solar water heaters. Some also give rebate to residents in their electricity bills using solar water heaters. Recently, few houses opted for solar installation for their electricity needs. Though installation cost is high in the longer run, it is sure to emerge as an answer to India’s energy issues.

Green house
Prepare for early winter treat
Amarjeet Singh Baath

Chrysanthemum owes its popularity to its wide range of forms and varied colours. Even though it is a winter flower, the maintenance of the stock plants is a year-round exercise in order to get terminal cuttings or suckers for growing in pots for flowering in the winter.

The months of July and August are right for the propagation of chrysanthemum cuttings to get a colour splash starting from mid- November to December-end. Though chrysanthemum can be made to flower year round under controlled conditions of light and temperature, traditionally it has been grown in the plains of North India to get flowering in winters when most other seasonal flowers are yet to establish their identity. The growers can take terminal cutting in July-August for planting rooted cutting during August to mid-September

Chrysanthemum is a short-day plant. Induction of flowering on the plant takes place when the length of the day is below 13 hours and night temperature range of 14-16 degree Celsius. The favourable day length for the induction of flowering in the terminal shoot starts in the mid August. Before the onset of short days the terminal shoots grow only vegetatively. Therefore, the cuttings taken on the stock plants are required to be rooted during late July and early August.

A 2 ½ "-3½" terminal cuttings having 2-3 pairs of leaves are taken from the stock plants. Shoots are turgid and can be easily taken in the morning hours. Cutting of most of the chrysanthemum varieties grown in north India are easily rooting in moist sand which are kept moist throughout till rooting take place.

After two-three weeks, the cutting should be checked for the root formation. Any resistance while taking the cutting out is indicate the formation of roots and they are ready for planting in pots under the shade.

The pots should have potting mixture consisting of two parts of soil and one part of well rotten cow dung manure. Chrysanthemum is a heavy feeder and requires soluble fertiliser NPK 20-20-20 at the rate of 2 gram per liter of water every 7 to 10 day. It should be continued till flower buds just start showing color.

Year-round care of the plant has to be taken against insect, pest or diseases by using prophylactic sprays, insecticides and fungicide periodically.

Tax tips
Transferring property in wife’s name
S. C. Vasudeva

Email your queries to realestate@tribunemail.com

Q. I purchased a house at Faridabad measuring 200 sq yd in 1997 and got the house property legally transferred in my name as per sale deed. The consideration amount on the basis of sale deed was Rs 3 lakh.

My queries in this regard is as follows:

• Can I transfer my property in the name of my wife on the basis of this sale deed or otherwise dispose off this property or there is a need for some other deed for such transfer.
• Whether registration/ stamp duty will be done/paid respectively on the current market price if, so, at what rate/percentage.
• Since there is no exchange/transaction of money involved as I want to transfer/register property in the name of my wife; will the property be required to be registered again?
• Can a registered Will allow me the transfer of my property in the name of my wife and then she would be the sole owner of the property after my death. — Ashok Pandit

A. Your queries are replied hereunder:

• The sale deed having been effected in your name there is no need for another sale deed for the transfer of property in the name of your wife. As transaction of money is not involved, you can transfer the property to your wife by executing a gift deed in her favour. Such deed will have to be registered with the Sub-registrar Faridabad.
• The gift deed would be executed on the basis of the present market value and the stamp duty will have to be paid accordingly. The stamp duty is presently payable @ 4 per cent in Haryana in respect of a property transaction in the name of women.
• You can execute a Will in favour of your wife and after your death such a property will be transferred in the name of your wife on the basis of the registered Will. She will become the sole owner of such property after the same is mutated in her name on the basis of such a Will. In case you adopt this course of action there would be no need to execute a gift deed and pay stamp duty and registration charges on the basis of market value of the property.

The NRI angle in agricultural land

Q. I am an NRI. Recently on account of the death of my parents I have inherited a very large acreage of agricultural land in India. Can I continue to hold the said land? Further I may like to dispose off the same in the near future. Will such land be exigible to capital gains tax in India? — Surjit Singh

A. The restriction imposed by the regulations issued under the Foreign Exchange Management Act (FEMA) 1999 are applicable for buying an agricultural land in India by an NRI. There are no restrictions of holding a land which has been inherited by an NRI. You can, therefore, hold such land without any problem. The taxability of capital gain earned on the sale of an agricultural land would depend upon the location of the agricultural land. If the same is situated within the municipal area or within such kilometers of the municipal limits as specified by the provisions of the Income-tax Act 1961 (The Act), tax on any gain arising on sale of such land would become leviable. The capital gain would be a long-term capital gain and taxable @ 20 per cent of the capital gains plus education cess @ 3 per cent thereon.

Can I claim deduction on the rent paid?

Q. I am a salaried person employed in a private firm. My gross salary amounts to about Rs 5, 00,000 per annum. I am paying a house rent of Rs 10,000 per month. I am not in receipt of any house rent allowance from my employer. Can I get a deduction of the above amount of Rs 10, 000 towards the house rent paid?

A. An assessee is allowed deduction for the amount paid towards the house rent provided the following conditions are satisfied:

• The rent paid is in excess of 10 per cent of his total income before allowing any deduction under this Section.
• The rent paid is in respect of accommodation occupied for the purpose of his own residence. An assessee is required to file a declaration in form 10BA in this respect.
• The deduction would be allowable only in case where any residential accommodation is not owned by the assessee or by his spouse or his minor child.
• The assessee is not entitled to any house rent allowance.

The deduction is restricted to 25 per cent of the total income or Rs 2,000 whichever is less. Presuming that you comply with the above requirements and as your total income is Rs 5,00,000, the deduction allowable to you will work out as under:

Rent paid in excess of 10% of total income

(10,000 X 12) - (10% of Rs 5,00,000) = 1,20,000-50,000 = 70,000

25% of total income (25% of Rs 5,00,000)= 1,25,000

Maximum Deduction @ Rs 2000/- per month = 24,000

You would thus be entitled to a deduction of Rs 24,000 only.

The long and the short of it

Q. My father-in-law booked a flat in a building being developed by a reputed builder in February, 2010 by paying a booking amount worth Rs1,40,000. An allotment letter which contained the flat number, building number and area was issued on the same date. The flat buyer agreement was also signed in February, 2010. This flat was booked under the installment plan and the possession was to be handed over in three years. The possession of the flat was offered and taken by my father-in-law in January, 2013. The total cost of this flat was Rs 35,00,000. My father-in-law sold this flat immediately after obtaining the possession in May, 2013 for Rs 70,00,000. The proceeds from the sale of this flat i.e. Rs 70,00,000 and another Rs 5,00,000 were re-invested in June 2013 in another residential flat. Please advise if the profit from this sale will be a long-term capital gain or a short-term capital gain. If this is long-term capital gain, will my father-in-law be able to save tax by investing Rs 75,00,000. — Ravi Shankar

A. There is a difference of judicial opinion with regard to the determination of period of holding where the flat is booked on instalment basis. In quite a few cases it has been held that the period of holding the capital asset should be counted from the date of allotment of the flat. In CIT vs. Jindas Panchand Gandhi (279 ITR 552) it had been held by the Tribunal that the period of holding of a flat should be counted from the date of allotment of shares to a member in a co-operative house building society, being also the date of allotment of flat. The Gujarat High Court accepted the view of the Tribunal and dismissed revenue's appeal. If this contention is accepted, the capital gain arising on the sale of flat owned by your father-in-law should be a long-term capital gain. In case this plea is not accepted, the capital gain earned on the sale of the flat should be treated as short-term capital gain and tax levied accordingly. The short-term capital gain cannot be saved by making an investment in capital gains tax saving bonds or investing the same in purchase or construction of a residential house. However, in case the plea of your father- in-law is accepted on the basis of above decision, due exemption under Section 54 of the Act would be allowable as capital gain on sale of flat would be treated as a long-term capital gain. As he has utilised the amount of such gain by purchasing a built up residential flat within two years after the date of sale of flat, such long-term capital gain would not be taxable.