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policy watch: regularisation of illegal colonies
A paying move? 
Real estate prices in most areas in the Doaba region have been stagnating over the past almost one year now, and hardly any sale-purchase has been witnessed even during the festival season so far. Apart from the overall slowdown in the realty sector all over the country, one of the main reasons for a lull in Punjab market is the presence of a large number of illegal colonies in the state.
tax tips
loan zone
Ground Realty
vaastu wisdom
realty bites
BridgeStreet ties up with JNB and Homestead
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policy watch: regularisation of illegal colonies
Real estate prices in most areas in the Doaba region have been stagnating over the past almost one year now, and hardly any sale-purchase has been witnessed even during the festival season so far. Apart from the overall slowdown in the realty sector all over the country, one of the main reasons for a lull in Punjab market is the presence of a large number of illegal colonies in the state. There has been a complete ban on registration of properties in illegal colonies since mid-April this year leading to a dip in the realty market.
Roads full of potholes, non-functional streetlights and incomplete drainage system. And to top it all, no funds in the kitty of the Municipal Corporations in Punjab to improve civic amenities. This sums up the present state of affairs in the 10 cities of Punjab. “How can the realty sector grow and bloom under such circumstances, asks Anil Chopra, President of the Punjab Property Dealers Association. Having allowed thousands of illegal colonies to mushroom haphazardly for decades across the state, Punjab Government came out with a plan to regularise these after collecting regularisation charges from residents and compounding charges from the colonisers. The cash-strapped state government has set a target to raise ~1,000 crore development funds ahead of Parliamentary poll through this regularisation policy. Market watchers and realty experts have termed this move to be a positive step as it would pave the way for deals once the properties get a legal status.
The genesis However, the million dollar question that experts have been posing is that why such serious violations and evasion of development charges and licence fee were ignored for all these years? Why the PAPRA Act was not imposed on illegal colonisers and FIRs were not lodged against all of them? Why the trend of buying properties in unauthorised colonies was encouraged and buyers were allowed to get their plots registered, given water and power connections like residents of a regular or scheme areas? Why the MLAs and MPs kept on doling out hundreds of crores of grants through their discretionary funds to such colonies ensuring that these were all well-spruced up? And above all can all such wrongdoings like the evasion of funds, violation of laws and flouting of norms for developing a colony be corrected with just one ‘undo’ command? With no check on the illegal growth of cities for years, the state government had, indirectly, encouraged several land mafias to make money in connivance with certain top politicians, MC councillors, cops and even bureaucrats. All of them joined hands to usurp prime land and dupe gullible buyers. It was because of this that the field staff be it of the MC or PUDA, could not dare to stop such illegal construction activities. “It is a known fact that their top rung officials even got a cut from the builders for not taking action. The politicians rather sided with the residents of such colonies for they comprised their votebank”, said a houseowner in one such colony in Jalandhar. The fact that many politicians across the state live in houses falling in such unapproved colonies had further hindered any action against the wrong doers. Chief Parliamentary Secretary K.D Bhandari, Jalandhar Cantonment MLA Pargat Singh and former Jalandhar Improvement Trust Chairman Baljit Singh Neelamahal, all live in colonies that don’t have the necessary approvals. Bhandari, when asked if he had got his colony regularised, said, “My colony falls in a Town Planning Scheme. We have written to the Chief Town Planner seeking his approval on the matter. If it gets done fine, or else I will pay whatever the dues are”.
Lack of govt-backed housing schemes The root cause of this malaise of illegal colonies is the huge gap between demand and supply in the residential segment in almost all the major cities of the state. The authorities have conveniently overlooked the need to develop residential projects on regular intervals to provide sufficient housing stock as only a handful of schemes have been launched over the years. The Jalandhar Development Authority which was formed about six years ago is yet to develop even a single scheme in Jalandhar, Kapurthala and Hoshiarpur areas falling under it. Sanjay Sehgal, Congress leader, said, “The government must come up with more affordable schemes to dissuade people from falling in wrong hands.” Moreover, even when such schemes are floated the prices are very high and out of the reach of a common man. Those who buy plots in these approved projects often have to grapple with harassment on various accounts such as delay in handing over of possessions, refund of the earnest money, legal wrangles, etc. All these factors have led to the mushrooming of illegal colonies where the colonisers have taken advantage of low price structure to lure and dupe the buyers.
Step in the right direction It was only after the state government ran out of funds to even pay the salaries of its staff that it dawned on it to offer this regularisation
formula to the residents and colonisers. It was just recently that the Punjab Urban Development and Planning Authority (PUDA) had started dealing strictly with the illegal colonisers. It had got lodged as many as 230 FIRs against such persons over the past few months in Jalandhar alone.
Price of setting things right Though the policy is in place, it has not been an easy going for the officials of the Local Bodies, Housing and Urban Development departments and district administrations who are stretching beyond office hours to make the collection for over a month and a half now. Till October 7 the initial deadline, they ended up recovering only ~125 crore, far below the target. The last date of getting the regularisation done without late fee was extended from October 7 to October 25. The state government has even come up with more reliefs to motivate more individuals and colonisers to come forward. It issued a clarification for its August 21 policy mentioning that the plots sold before August 9, 1995 — the date of enactment of the Punjab Apartment and Property Regulation Act (PAPRA Act 1995) — in unauthorised colonies developed before the date are not required to be regularised under the policy, but the area sold after the date is covered under the policy. The regularisation policy that initially evoked sharp reactions was revised and even the charges were lowered to suit the applicants. The desperation of the state government can be gauged from the fact that the Deputy Commissioners of each district have been made accountable for the job, and they have to constantly monitor the collections made in their respective areas.
The government has, in fact, been giving all sorts of provisions to the applicants giving them an option to apply online, holding camps, giving helpline numbers, posting Frequently Asked Questions (FAQs) on PUDA’s official website as well as punjabregularisation.com. It has even adopted some harsh measures such as making announcements asking people to comply or face power and water supply disconnection. Notices seeking payment have also been put up outside the houses of owners who have not paid the charges. After the recent extension of the deadline for paying the charges, officials are now re-strategising their plan, analysing the data of the recovery made, targeting areas from where the response has been minimal. The administrations have also been asked to depute its staff with the MCs so as to expedite recovery. Deputy Commissioner Jalandhar said, “I have asked the officials concerned to do profiling for their recovery so that the problem areas could be identified”. Collection so far Till October 16, the Housing and Urban Development Department had collected ~210 crore. Principal Secretary of the department A.Venu Prasad said his office had received nearly 1.05 lakh applications which included those from 5,000 colonisers. He said that there were about 10,000 illegal colonies in areas under development authorities in different districts in the state. PAPRA Act violations continue
The government has taken a strict stand on illegal constructions by stipulating that any construction after April 1, 2013 would be considered a violation of the PAPRA Act. But this doesn’t seem to have deterred the violators. Chief Administrator of Jalandhar Development Authority Jaskiran Singh raised the issue of recent mushrooming of an illegal colony near the newly started DAV University on Jalandhar-Pathankot road during a recent meeting with the Deputy Commissioner. He said that he had issued notices to four persons under the PAPRA Act recently.
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Can I mend the error in depositing TDS?
S. C. Vasudeva
I have checked my Form 26AS and found that while the transaction has been correctly recorded as sale of Residential Property, the amount of TDS deposited by the purchaser is not recorded under the respective column. Please let me know whether I will get my refund without any hassle or I will need to seek some remedial measure. — AK Sood A. It seems the purchaser has deposited tax in ITNS 280 and not in 180 as mentioned by you in the query. This will be treated as an amount of advance tax paid for on behalf of the purchaser and would not, therefore, be reflected in form 26AS. The challan and the TDS certificate as given to you by the purchaser would not enable you to claim a reduction from the amount of tax payable on the capital gain arising on the sale of the property. Such documents may also not enable you to claim refund in case the capital gain or the net consideration as the case may be, has been utilised in accordance with the provisions of Section 54 or 54F of the Income-Tax Act, 1961(The Act). The amount of tax deducted at source in respect of sale of property is to be deposited in Form No. 26QB in terms of Rule 30 and Rule 31 of Income-tax Rules, 1962. You may, therefore, approach the purchaser to deposit the amount of tax deducted at source in the aforesaid form and thereafter issue a new tax deduction certificate. This should be possible because the earlier tax deposited by the purchaser will be treated as advance tax in his assessment for which he will be able to avail due credit against the amount of tax payable by him on his total income. Is it necessary to invest capital gains in another property?
My questions are:
— Raj Rani A. The answers to your queries are as under:
What is the tax liability in case of family agreement?
— Vinod Kumar A. A family arrangement is an agreement between the members of the same family intended generally and reasonably for the benefit of the family by compromising doubtful or disputed rights so as to preserve the family property and the peace and security of the family by avoiding litigation. The family arrangements are covered by the principles which are not applicable to dealings with strangers and the family arrangement amongst the members of the family is for the interest of the family. The realignment of interest by way of family arrangement among the family members is not construed a transfer. No liability of capital gains tax should arise in such cases. It is a settled law that the validity of family arrangement is not to be judged with reference to whether the parties who raise disputes or claim right of certain property had in law any right or not (CIT vs. A.L. Ramanathan 245 ITR 494, Madras).
email your queries to realestate@tribunemail.com
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Can I stop paying EMIs for 11 months?
SC Dhall A.The lender will not agree to suspending the payment of EMIs even if the borrower quits the job. It is in your interest to make payment arrangements with themin order to avoid becoming a defaulter. Defaulting loan repayment will jeopardise your ability to get loans or credit cards in future. One possible way out is to seek a top-up loan from them (if eligible) before you quit your job (otherwise you will not get it) and use the top-up loan to pay the 11 installments. Another option is to seek an education loan from Axis Bank and see whether they will accommodate this request. Will job change affect my credit history? Q. Will it affect my credit if I change a job in five months and take up self-employment? A.
Credit history is affected by defaults on payments, frequent late payment and cheque bounces and not by changing jobs or starting your own business. So if you masnage to keep your record of repayments of loans of any sort clean then it won’t matter if you are working in organisation A, B or C.
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Give a new look to your floors
Jagvir Goyal Every time a house owner visits a newly built house or an exhibition and comes across new, attractive and trendy building materials, his desire to have those in his house becomes strong. But any such change requires not only huge sums of money but also a lot of inconvenience as one may have to shift to another place to allow renovation work. Giving a new look to floors is considered to be the easiest way to give a new look to one’s home and nowadays a huge variety of tiles and other flooring options are available in the market. This week we take up some of ways in which you can “modernise” your home by giving it a “floor overhaul”.
As dismantling of old floors may be very tedious, the next obvious option is to lay new flooring over the old one. This looks possible but there are certain bottlenecks that need to be dealt with. The major bottlenecks are the resizing of doors and checking the suitability of old floor to bear new flooring. Resizing of doors: Whenever we plan to lay a new flooring over an existing one, the new level of the floor is likely to rise by 10 to 12 mm or even more. This may require resizing of door shutters in the house. Generally, a margin of 5 to 8 mm is available between the floor and the bottom edge of doors and this gap has to be kept between the new flooring and the door shutters for their smooth opening. This means that doors need to be resized by shortening their depth by 10 to 12 mm. Precautions during resizing: Resizing of doors may be a tricky matter. The joints between the stiles and bottom rail of the door shutters may get disturbed. The edge margin below the tenons in the stiles will be reduced, weakening the door structure. A carpenter should, therefore, be called to examine whether the door shutters can be reduced in size safely or not. Saving the cost of dismantling old floor by making the door shutters weak is not a wise proposition. Condition of the existing floor: Condition of existing floor needs to be carefully checked. It should be able to provide a strong base to the new flooring material. Any cracks in it should be filled carefully. Most important is that it shouldn't have settled anywhere, causing a level difference among various slabs or panels of the floor. In such cases, uniform level of the existing floor needs to be achieved before laying new flooring. The floor should be tapped all around and if any hollow sound is noted in any portion, that portion should be strengthened. Available options: There are many options available to lay new flooring material over existing floors without dismantling them. One may choose PVC floor tiles. Otherwise vitrified tiles are the most preferred choice. Porcelain tiles, another variety of ceramic tiles are next preferred material. Ceramic tiles are also used. Laminated wooden flooring tiles can also be laid over the existing flooring. Laminated wooden tiles: These demand a minimum depth of 10 mm over the existing floor. Laminated wooden tiles are 8 to 10 mm in thickness. For residential purpose, 8 mm thick wooden laminates can be chosen. One should look for high pressure laminates for reduced sound while walking over the floors. Before laying them, polystyrene or foam sheets are spread over the existing floor and anti termite treatment should be given to existing floor. Most important requirement for their successful laying and durability is that the existing floor should be perfectly in level. One should choose AC4 grade flooring. AC 3 grade should be avoided. AC 5 grade is too heavy duty for the residential areas. Vitrified tiles: These are the most preferred choice. Two feet by two feet size of tiles is the most preferred size as too large sizes may face problems if there are level differences in the existing floor. Adhesion: It is vital to create proper bond between the existing floor and the new flooring material whenever decision is taken to lay new flooring over the existing one. For this purpose, the quality of adhesive used plays a crucial role. Adhesives: Adhesives used in laying new flooring over existing floor are of two types. In one type of adhesives, cement needs to be mixed with them along with water to prepare the required mixture. The other type does not require cement to be mixed. This pure adhesive when mixed with water in right proportion and used, gives excellent results. Further, choose an adhesive that causes no expansion or contraction problem. Adhesives, ready to use after mixing with water should be used. One should ask for a tile-on-tile application adhesive from the supplier. Advantages: Laying of new flooring over the existing floor has many advantages. Significant expenditure involved in dismantling old flooring, its removal and re-preparation of sub base is saved. The time involved in the activity also gets reduced substantially. Movement of household items and furniture is also
manageable. PVC tiles (This column is published fortnightly)
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Is locker in basement a bad idea?
Madan Gupta Spatu Q. As Bankers we are facing lot of problems in our Locker Room which is in the basement. Could you suggest us some remedies to avoid mishaps, thefts etc and other complications.
— HS Arora
A. Nowadays it has almost become a practice to have locker rooms in the basement area of a bank. This is basically because of space constraints and security concerns. You will not be able to do much about the location of the locker room in your bank, but applying some Vaastu principles to correct the direction doshas may be of help. North and east are excellent directions for a locker room. The cabinets in this room should be placed in such a way that these should open towards the north. These cabinets should not be placed under a beam. A mirror can be hung in the locker room to reflect lockers. A Mangal Yantra should be installed in a secret place of the Locker Room.
Right directions for manufacturing plant Q.
We are setting up a manufacturing plant near Dera Bassi. Could you suggest some simple layout points.
— Waryam Singh A. Plot should be the highest in south-west and lowest in north-east directions. It should be rectangular or square in shape. Boundary walls in south and west directions should be heavier and taller than those in north and east direction. The south-west portion of construction should be its highest point. If you need to have an underground water tank or storing tank, then it should be in north-east but never in the south-west direction. Toilets, bathrooms should be in south-east or north-west directions. Labour quarters should be in south-east or north-west but never in the south-west area. The security guard should sit facing east or north only. If a temple is built on the premises, then it should be in north-east. Ideally you should avoid having a temple on the premises. Canteen should be in south-east. Big heavy machinery should be installed in south and west side of the plant area. All operators should face preferably north or east but never south. Production should be from south to north or west to east. Main end product should come out in the northern or eastern side of the factory. Finished goods godown should be in north-west. Dispatches should be made from north-west gate facing east. Transformer, Furnace, oven should be put in south-east. Boss or owner should always sit in south-west facing east or north. — Mail your queries at –
vaastu@tribunemail.com
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realty bites
Global property consultant Knight Frank launched a real estate sentiment index in partnership with the Federation of Indian Chambers of Commerce & Industry
(FICCI) to measure the trends in a volatile property market.
Unlike in developed countries and matured markets, the Indian realty sector is not regulated yet and has not been given the industry status though it provides second largest employment across the country after the farm sector due to fragmentation and majority of its players such as developers, builders and contractors being in the unorganised sector. “The sentiment index will bridge the gap between developers and end-consumers and bring them on a platform to assess supply-demand side and pricing of commercial and residential properties in metros, cities and towns across the country,” Baijal said. The index will also measure the current and future market sentiments and report on the short-term future trend of launches, sales volume, price and credit availability for office and residential space market.
— IANS
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BridgeStreet ties up with JNB and Homestead Leading international provider of residences, serviced apartments and suites – BridgeStreet has entered into a 20-year tri-party agreement with JNB Group,
LLC(JNB), a privately owned real estate investment and development consortium and Homestead, a real estate development company specialising in boutique branded residences. Through this agreement BridgeStreet would be handling the property and facilities management for two new luxury residences by Homestead — Michael Schumacher World Tower and Ballet by
Sharapova. The agreement also entails a comprehensive long-term commitment to collaborate on future Homestead serviced apartment developments throughout the world.
Speaking on the occasion Sean Worker, Chief Executive Officer of BridgeStreet said, “We look forward to meeting the growing demands of residential buyers and incoming business and leisure travelers with JNB and Homestead. Our newest brand extension ‘Exclusive by
BridgeStreet’ is the perfect fit for these two stellar properties.” Exclusive by BridgeStreet is the brand’s recently introduced line of ultra-luxury, signature residences. Located in key international locations, these developments will feature celebrity designed and endorsed lifestyle experiences with exquisite six-star quality furnishings, fittings and finishes.
BridgeStreet JNB Management, a to-be-formed India Private Limited entity, will oversee all management aspects and maintenance services for the Michael Schumacher World Tower in Gurgaon and Ballet by
Sharapova, located in Sector 73, Gurgaon. — TNS
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Tata Realty launches mall in Amritsar
Strategically located in Amritsar, the mall is spread over 5.54 acres having 7 lakh sq ft of shopping area, he added.
O2 Valley in Greater Noida Amrapali Group has announced the launch of 'o2 Valley,' an eco-centric residential development as part of Amrapali Centurian Park in Greater Noida West. Centurian Park is an integrated township spread across 75 acres and the new project will offer 2, and 3 BHK apartments in area ranging from 885 sq. ft. to 1185 sq ft. These will be priced at Rs 28.8 lakh onwards. O2 Valley homes are completely sustainable and energy efficient and are installed with smarter electrical fittings for energy conservation and will save money over the electricity bills. The total number of units is 800 and the possession of the project will be given in 36 months from the commencement of construction work. The group is going to invest Rs 600 crore on this project.
KUL Radiance in Mumbai Mumbai-Pune developer Kumar Urban Development Limited (KUL) recently announced the launch of their lifestyle residential project ‘KUL Radiance.’ Located in the heart of Mumbai city at Bandra (East), KUL Radiance, a 15-storey tower, offers 1, 2 & 3 BHK apartments with 1 BHK flats measuring 361sq.ft, while 2 BHK apartments measure 525sq.ft. A home buyer also has the option to convert two adjoining flats into one spacious 3 BHK apartment if he so desires. The sale price of a 1bhk flat starts from `1.16 crore. The project is expected to be completed by March 2016.
Raffles Park in Bangalore Raffles Residency Pvt. Ltd. unveiled Raffles Park — its first residential project development in the country earlier this week. The group is promoted by the Singapore-based Jumabhoy family. The announcement was made at the 'Raffles Park Pavilion' located on site at Soukya Road at Whitefield, Bangalore. This 61 five-bedroom villa project that will be spread across 15 acres will target the premium living space.Each villa will be prices at ~4.75 crore onwards ad the project is likely to be completed bu December 2015. —
Based on information provided by the builders
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Every time a house owner visits a newly built house or an exhibition and comes across new, attractive and trendy building materials, his desire to have those in his house becomes strong. But any such change requires not only huge sums of money but also a lot of inconvenience as one may have to shift to another place to allow renovation work.
Thinkstockphotos/Getty images
Leading international provider of residences, serviced apartments and suites – BridgeStreet has entered into a 20-year tri-party agreement with JNB Group,
LLC(JNB), a privately owned real estate investment and development consortium and Homestead, a real estate development company specialising in boutique branded residences.
Q. I sold my residential apartment recently (June 2013). The purchaser of my property has deducted 1 per cent TDS as per the new provisions. He has given me TDS certificate as well as copy of Challan after depositing TDS amount to the Income Tax department online. On showing these documents to my CA I was told that the TDS amount has been deposited under a different section of item. Instead of using Section 181 he has used Section 180 which appears on top left of the challan. This error will not allow TDS amount to appear in Form-26 AS hence I may encounter problem in claiming TDS when I file my return next year (April 2014)
Q. My husband bought a plot on which we constructed a house in 1994-95 by taking loan from his department. He died in 2000 and my daughter (major) and I are the legal heirs of the property but now I have remarried. We have sold the house for
Rs 64 lakh.
Q. In case of a joint family assistance/ property is going to be transferred to the brothers by way of family arrangement. Please let me know whether such arrangement amounts to transfer as per the Act and would attract any capital gains tax liability.
Q. I have taken a home loan of
Rs15 lakh from Axis Bank. My present EMI is Rs 16,500, per month. Most of the amount of this EMI is covers the interest component of the loan. The present market value of my flat is
Rs 50 lakh. I want to pursue an 11-month management programme in Bangalore. During this period I willnot be having any regular job or income. Is it possible for me to stop the payment of EMI for 11 months? Do banks have any procedure in which the payment of EMIS can be suspended temporarily if the borrower quits his job and goes for higher studies? —
Krishan Lal Nanda
These are the easiest to lay and provide a beautiful look. These also demand minimum reduction in size of door shutters as thickness of PVC tiles is hardly 1.5 mm to 4 mm. For houses, just 1.5 mm thick tiles prove sufficient. Many reputed companies produce PVC tiles that give a very smooth and beautiful look and resist stains and scratches also. Laying them is easier than other types of tiles. However, people don't prefer using PVC tiles in houses as these give a sort of commercial look. Moreover, due to their less thickness, even a slight level difference in the old floor is clearly visible. Rubber adhesives are used to fix PVC tiles over existing floor.
Touted to be the country’s first in the realty sector, the index will the track the supply-side every six months or twice in a year to release the data quarterly to developers, builders, banks, financial institutions, private equity investors and allied stakeholders. “There is a need to capture perceptions and expectations of the industry leaders and gauge the overall sentiment of the Indian real estate sector in a volatile environment,” Knight Frank India head and managing director Shishir Baijal said in Mumbai. 
Tata Realty & Infrastructure recently announced the launch of its mall -Trilium here, involving capital outlay of Rs 510 crore. Company’s Managing Director & CEO, Sanjay Ubale said, “Trilium will house a 5-star hotel, food court with over 800 seating capacity, a 6-screen multiplex, hypermarket, departmental stores and family entertainment centre”.