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Hi 5 for home buyers
The real estate sector has been highly-unregulated in India for years giving a raw deal to the home buyers. However, the Real Estate (Regulation and Development) Bill, 2013, that was recently introduced in Parliament and was subsequently referred to a Standing Committee of Parliament, promises to be the “game changer” for the lucrative yet highly-opaque sector.
Is it the right time to buy?
Tax
tips
REALTY GUIDE
Smart parking solution
launch
pad
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Hi 5 for home buyers
The real estate sector has been highly-unregulated in India for years giving a raw deal to the home buyers. However, the Real Estate (Regulation and Development) Bill, 2013, that was recently introduced in Parliament and was subsequently referred to a Standing Committee of Parliament, promises to be the “game changer” for the lucrative yet highly-opaque sector.
In fact, the Bill when it becomes law, after being cleared by Parliament most likely in the winter session, would go a long way in promoting transparency and fair and ethical business practices regarding transactions in the realty sector. The various provisions of the Bill have sparked a lot of debate with a number of developers’ bodies calling the Bill biased. There is no doubt that the proposed regulations will make buying property a lot less cumbersome for a common man. All those planning to purchase a home or a property in the near future should be aware of the different provisions of this Bill that will help them in getting “fair” deals and increase transparency. Some salient provisions and their implications are explained below. 1
Information about the project details The disclosure of project details and contractual obligations regarding the housing projects will help the buyers in making an informed choice besides putting pressure on the builders to meet the completion deadlines and deliver the promised amenities. In the absence of an effective regulatory system the consumers are usually unable to procure complete information and enforce accountability against builders and developers. The Bill is expected to ensure greater accountability and reduce incidents of frauds and delays by the builders significantly. The Bill provides for mandatory public disclosure of all project details by promoters. The builders will now have to provide all the information regarding a project on a website and update the information at regular intervals. So for the customers the detailed information about a project will be just a click away. 2
The 70% clause The Bill also seeks to redress the common complaints of delay in possession in a unique way. It mandates the builders that 70 per cent, or such lesser per cent as notified by the government, of the amounts realised for a real estate project from the allottees would be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction. It would be used exclusively for construction purposes for the timely delivery of apartments. 3
The 1000 sq mt rule The registration of a project measuring 1,000 square metres or 12 apartments would be mandatory under the Bill. This will bring even small builders under the ambit of the provisions of the proposed Act. The initial draft of the Bill reportedly provided for 4,000 square metre which was subsequently reduced to 1,000 square metres to keep a watch on even small builders and promoters. 4
Carpet area clause In a blow to the highly-unethical practice of selling super area and built up area that was being followed by several builders, this provision mandates only the term carpet area would now be used by the builders. The carpet area is the net usable area of an apartment (excluding the area covered by the walls. The builders would, thus, now be able to sell only the carpet area and the home buyers would pay only the carpet area offered by the builders and promoters. 5
Dispute redressal and penalties As a dispute redressal system, the Bill provides for the establishment of the Real Estate Regulatory Authority and appellate tribunal. To take care of the intermediaries or agents, there is a provision of mandatory registration of real estate agents that so far has been unregulated, with clear responsibilities and functions. Penal measures, including imprisonment of promoters to curb non-compliance and flouting of norms.
A booster dose for realty sector The proposed Bill would uplift the depressed market sentiment triggered by a slowdown in the realty sector. Currently, a majority of the foreign investors, specially NRIs are wary of investing in housing in India due to outdated rules and regulations governing the realty sector. With a comprehensive legilsation addressing their needs regarding the transactions in the housing sector, more foreign investment would flow into the recession-hit real estate sector. On the domestic front, a large number of investors and end users would enter the market when they are confident that their interests would be taken care of after the Bill becomes a law, say experts. The Bill, when it becomes law, will be watershed in the real estate sector in India. With real estate sector bursting at seams, the new regime to regulate the housing sector was the need of the hour. The earlier it becomes a law, the better it would be for the real estate sector for infusing ethics in the realty business and retaining investor confidence in the housing
sector. With fly-by-night operators entering the real estate sector in order to make a quick buck, the sector has earned a bad name. While a law is needed to regulate the unregulated sector, it alone will not be sufficient. Its strict implementation would restore the confidence of investors and end users and attract foreign
investors. The government should come down heavily on the unscrupulous builders as most of the people invest their whole life’s savings to purchase a house. The immediate clearance of the Bill and its implementation in letter and spirit is the need of the
hour.
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Is it the right time to buy?
The general view is that the market is conducive for investment from both end users and investors. So, who is driving the real estate market today? End user or investor? It is a right mix of both. There is a shortage of 25 million houses in India and affordable housing is in need of attention. The end of this financial year could be the start of an upturn as end users will be driving the market from then. To buy or not to buy End user is still looking although the conversions to actual sales from enquiries have reduced. Investors, however, continue to buy as any time is good for them because they don’t know where the market will bottom out. The real estate sector in India attracts all the three kinds of buyers — end users, individual investors and corporate investors. Ours is perhaps the only market in the world where demand is sustained by end user with low-paying capacity to corporate investor sitting in a tower. Affordable housing always in demand The demand for affordable homes is still on an upswing as the end user who is vying to buy his only home is always on a lookout for a decent property. The low to mid-income group customers are dominating the market, with 1BHK configuration being the most popular category. The customer today is well informed and will buy only where he/she sees development taking place. Affordable homes will always be in demand for first time buyers, either upgrading from builder floor or rented home. Many home buyers are upgrading themselves by shifting from small to big apartments and ultra luxury residences. Opportunities for end users as well as investors Indian real estate today is governed by the confidence of end user and investor. For the end user, real estate is a safe asset class for investment and for the investor; slowdown presents an even better opportunity to invest as he can capitalise on the returns later. The first-time home buyer is driven by factors like growing urbanisation, job opportunities and development of satellite towns while investors have been the backbone of the real estate industry. Factors driving Indian realty market are both end-users and investors because of the opportunities that the market presents to them. There are various options for end users while the investor is looking to invest now to extract a steady source of income in future. — The writer is Business Head, 99acres.com
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Tax
tips Q. I have been informed that there is a change in the Income Tax Act and now the capital gain on the sale of agricultural land has been brought to tax. Please let us know whether this information is correct. Any area which is outside the jurisdiction of a municipality or cantonment board having a population of 10,000 or more and also which does not fall within distance (to be measured aerially) given below: 2 km from the local limits of municipality/ cantonment board. If the population of the municipality/ cantonment board is more than 10,000 but not more than 1 lakh. 6 km from the local limits of municipality/ cantonment board. If the population of the municipality/ cantonment board is more than 1 lakh but not more than 10 lakh. 8 km from the local limits of municipality/ cantonment board. If the population of the municipality/ cantonment board is more than 10 lakh. For the above purpose, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year. If agricultural land is situated in a village that comes within a municipality, then population of the municipality shall be considered (and not of village). In such a case if population of the municipality exceeds 10,000, then agricultural land would be considered a capital asset, even if population of the village is less than 10,000 - G.M. Omer Khan v. CIT (1992) 63 Taxman 533 (SC) and capital gain arising on sale of such capital asset would be taxable.
How can I calculate the exact capital gain amount? Q. I had inherited a property in Chandigarh from my father in 2002-03 which had been constructed in 1978. I have no intention to settle in the city and, therefore, intend to sell it. I will use the consideration received on such sale for the purpose of acquiring a suitable property in and around Delhi. I understand that the fair market value of the property as on April 1, 1981, will have to be ascertained and capital gain, if any, arising on the sale of the property will have to be computed after giving benefit of cost inflation index for the year 1981-82 onwards up to the year of sale. Is my presumption is correct?
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REALTY GUIDE Q. I own a flat jointly with my son. I want to know legal implications of this as I want to gift my share to my wife. Will it suffice to gift the house to her or should I make a Will in this regard so that she gets her share after my death? — balbir singh A. There are two ways through which you can transfer your share in the property in your wife’s name: If you make gift deed If you make a gift deed then absolute and clear title would pass to your wife and she would become an undisputed owner of the property during your lifetime. Once a gift deed is executed then you will not have any share/interest/ownership in the property. You must understand the basic points involved in trasfer of property through a gift deed. According to law a gift is a voluntary transfer of property from one person (the donor or grantor) to another (the donee or grantee) without full valuable consideration. However, a gift deed is legally valid when it is actually delivered to and is accepted by the donee. In India, previously there was Gift Tax Act under which the donor had to pay gift tax on the amount of gift. However, the said Act has been abolished and, a new provision was inserted in the Income Tax Act (1961) under Section 56 (2) which provides that if the gift is received by an individual or Hindu undivided family (HUF) from any relatives or blood relatives or at the time of marriage or as inheritance or in contemplation of death, then it will not be taxable. If you make a Will If you make a Will then you can have the ownership of your share in the property till you are alive. As mentioned earlier once the gift deed is executed you will lose your share in property and would not be able to take further decisions regarding it. But if you make a Will then you can modify/change your decision any number of times according to your wish or circumstances. You can update your Will in case there is a change in the circumstances. This normally includes important family changes such as the birth or death of a family member. Can I sell my flat without a conveyance deed? Q. I had purchased a flat at Zirakpur in my and my wife’s names in January 2007, for which possession was taken from the builder in July 2009, by paying the required fee to builder. I had taken loan from bank which was paid off in Feb ruary 2013, but unfortunately I didn’t get the flat registered as I had gone abroad. Last month, I came to know that municipal body still hasn’t passed the flats and the builder is still waiting for approval though all the documents had been submitted to the municipal body by the builder. Kindly clarify whether this will create problems if I want to sell this flat or I can still get it registered? — m. kaur In absence of an occupation certificate, the builder is not competent or authorised to transfer the clear title to the beneficiaries. Under PUDA Act, a builder on completion of the building works according to the building plan shall give notice of completion and furnish the completion certificate through his architect to the Competent Authority for using the occupation certificate. An occupation certificate certifies that a builder is competent to execute the conveyance deed to the owner of flats. Once a conveyance deed is done the person has a clear and transparent title which is missing in your case. So you cannot pass the title to anyone else until the conveyance deed is executed.
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Green
house With the monsoon receding, humidity level going down and night temperature falling the time is just ripe to plan your garden for winter and to sow seeds of winter annuals.
The flower bed should be well drained, weed-free and leveled so that water flows gradually and nutrients are not carried to low-lying areas. Apply six to seven baskets (or 5-6 kg) of well-decomposed farmyard manure and add DAP 500 grams in a hundred sq ft area (10'X10'). Mix the ingredients thoroughly. The soil bed is now prepared and is ready to receive new plants.
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The already available car parking systems like the fully automated parking system have several drawbacks. As the system is computer-operated it needs skilled operating staff and consumes more power. In this system a car is placed on a computerised tray and this tray is moved to shift a car to a parking space. This requires skilled operating staff and consumes more power besides high maintenance and installation costs. These are the factors which make it very expensive, costing upto Rs 5 lakh per car. A parking solution developed by the Cheema Boilers Limited (CBL) that was launched in the tricity earlier this week promises to provide a cost-effective and convenient solution to the parking problem in the city areas as well as in the housing societies and other areas. The system has been designed on the multiple-rack storage principle, and can house up to four times more cars than a conventional parking place, thereby saving huge amounts of land cost and the cost of constructing basement for parking purposes. Being a portable system, it can be shifted from one place to another place without any loss of material and without much effort. Talking about the “Smart Parking” system H.S. Cheema, MD, CBL, who has invented this system said, “This system has very economical initial cost, almost negligible maintenance and operation cost. In order to save the power consumption and cost, it has been designed to use the inbuilt propulsion arrangement of the car to shift it from one place to another within the parking system. The entire operation can be carried out by a normal car driver thereby eliminating the requirement of a highly paid computer operator being used in other such parking systems”. “It costs about Rs 1 lakh per car and is suitable for installation in a basement, terrace or other confined or small parking spaces within any building. It could be housed in green area of the apartments also," added Cheema This system is supplied in a ready-to-install condition and is operational within 2-3 days time at any site. It can also be operated by using diesel engine without using electric power at site locations, mela or trade fairs etc. where electricity is not available or is in short supply. It has a valet parking option as operator is already available to park and deliver the car. The owner can leave the car at a single point for loading and delivery. — TNS
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launch
pad
Shri Infratech recently launched an integrated township project 'Vedic City' in Greater Noida region. The township is connected to Delhi though NH-91 and has entry-point from the proposed Eastern Peripheral Expressway, besides two entry-points from a 45-meters wide master plan road. The Taj Expressway connects it to historic city of Agra. The metro connectivity has been proposed and nearest metro station will be Bodaki. The design and aesthetics of this project are inspired from Vedic era but will also exhibit the most modern aspects of urban planning. Spread across 580 acres, the township will have group housing, independent villas and plots. Located in the economically vibrant zone, Vedic City will house an IT Hub within its boundary and will have provisions for a helipad, world class museum, art gallery among other facilities.
KDPL’s bouquet of options for Pune Kolte-Patil Developers Ltd. (KPDL) announced the launch of four new luxury projects in Pune earlier this week. With the new launches — Tuscan Estate Signature Meadows, Downtown, 24K Glamore and 3rd Avenue at Life Republic –– the company will develop a total of 1.8 million sq.ft. Located in Kharadi, Tuscan Estate Signature Meadows has a developable area of 0.4 million sq.ft. The project has 70m tall towers comprising 3 & 4 BHK homes with servant room. The 45-acre Downtown will house commercial and residential properties along with schools and retail spaces. Located in NIBM Annex – Undri, 24K Glamore will offer fully serviced homes. The fourth project 3rd Avenue, which is a part of 400-acre Life Republic, will offer 1 & 2 BHK apartments consisting 2 high rise towers, each of 20 floors. — Based on information
provided by the builders
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Despite the economic slowdown that the country is undergoing, there will always be demand for affordable homes from end users. However, in view of the falling sales graph the question that is foremost in the minds of most of those wanting to buy property is whether it is the right time to finalise the deal or one should wait a bit more for getting a better deal.
A.The information given to you is not correct. Capital gain arising on the sale of agricultural land is not taxable provided the land is situated in a rural area. Law has, however, been changed to determine as to which category of agricultural land would be covered in a rural area. New criteria is applicable from assessment year 2014-15 (financial year 2013-14). Capital gain arising on agricultural land is not taxable provided such land is situated in a rural area. Rural area for the above purpose is as follows:
A. The issue raised by you is debatable in view of the language of Explanation (iii) to Section 48 of the Act, which provides that the benefit of indexation should be from the first year in which the asset was held by the assessee. If literal interpretation of this Explanation is taken, the benefit of indexation would be available to you from the year 2002-03 only. However, the Income Tax Appellate Tribunal, Kolkata Bench has held in the similar circumstance cited by you that in case various Sections dealing with the transfer of a capital asset are read co-jointly, it will be clear that the liability for capital gain arises only when the capital asset is actually transferred by the successor and for the purpose of determining the period of holding by the successor inter mediate transfers on account of succession are required to be ignored. The Hon'ble Tribunal has, therefore, held that in such a case in respect of
an asset acquired before April 1, 1981, the fair market value of the capital asset as on April 1, 1981 will have to be taken for indexation. The decision is reported in 117 TTJ 121. You should keep the above position in view before taking any decision.
A. It is not mentioned in your query whether the builder had taken the occupation certificate — whether partially or fully, while giving the possession to you from any competent authority such as PUDA/GMADA/ Town and Country Planning/ Municipal Corporation. 
Procurement of seeds requires a thorough knowledge, self-study and survey because if sub-standard seeds are sown, all efforts made later on will be a waste. Prefer buying hybrid seeds of long duration flowering annuals. Petunia, Pansy, Marigold, Phlox, Allysum, Dahlia, Dianthus, Salvia, Calendula, Larkspur, Antirrinum, Lupin, Candytuft, wallflower, Verbena and Stocks etc are the common winter blooms whose seeds can be sown at this time.
Choc a bloc parking lots with vehicles virtually overflowing onto the roads and lanes is a common sight in most cities and the provision of proper and adequate parking space is one of the major issues for the civic authorities. Multi-level parking systems in basements and computerised parking systems are being used to solve this problem, but these are yet to become popular because of the enormous cost involved.
Satya Group and Maple Group launched fully furnished serviced apartments, “Element One” at Sector 47 and 49, Gurgaon recently. These contemporary designed high-end serviced apartments can serve as private suites or can also be utilised for office purposes. The project comprises 1 BHK furnished apartments (second floor onwards) in 670 sq ft area with ample parking space for residents and visitors and round-the-clock security.