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watch: ludhiana
Slow march
Property market in Ludhiana, the industrial capital of Punjab, has, over the years, remained immune to the frequent ups and downs that are a part of the game in the real estate sector basically because of a steady demand and investor interest in properties within and around the city. But the past two years have been an exception to this rule with sale and purchase dropping considerably and practically no investors, who have always been the prime market drivers, operating here.
Affordable choices
tax
tips
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area
watch: ludhiana
Property market in Ludhiana, the industrial capital of Punjab, has, over the years, remained immune to the frequent ups and downs that are a part of the game in the real estate sector basically because of a steady demand and investor interest in properties within and around the city. But the past two years have been an exception to this rule with sale and purchase dropping considerably and practically no investors, who have always been the prime market drivers, operating here.
While price correction has not been significant in Ludhiana as a majority of investors have a holding capacity to wait for better times, it is the new projects launched by several national as well as local builders in and around the city, have been the worst hit. Low investor and end user interest dampened the market sentiment sufficiently to slow down the progress of work in a number of projects that were launched four-five years back. “There has been a wave of uncertainity in the market as several buyers who had booked homes or shops in projects in the city are apprehensive about the fate of their investments in these projects due to very little or slow progress on the sites”, says Rajinder Soi, a local property consultant. Project watch National level real estate players like Ireo, Vipul, Omaxe, Eldeco, Imperial Group, Aeren R, apart from some local realty players, had launched projects with much fanfare between 2008 and 2010, but with the property market hitting a low, these soon ran out of steam. An assessment of the different projects in and around the city confirms that the apprehension of buyers regarding certain projects is not unwarranted as the pace of work is indeed slow there. Some of the projects that were launched five to six years ago are still far from being complete and the work is continuing on a slow pitch. The Ireo group has one of the largest and most ambitious projects in the area. It began developing 500-acre ‘Ireo Waterfront’ in 2010 along the Sidhwan Canal. The project has plots, luxury villas, expandable homes, expandable villas, commercial units, independent floors on offer. As many as 5,000 residences were planned in this integrated township, including 2,000 built-up properties. As of now, the group has sold 1,200 units. As many as 200 units would be ready by the middle of the year, of which 20 have already been handed over. A 13-acre lake that is part of the Ireo Waterfront would be opened in April, according to Hemant Gupta, Head of Sales of the compay. The cost of built up property in this project is around ~4,000 per sq ft whereas the plotted area is ~24,000 per sq yd. “Right now Ludhiana is a market for end-users and not investors. Although there is a perception of slump in the market, we are on track, and in less than four years, all the township would be sold,” added Gupta. The AerenR group had launched its flagship project Fortune County over two years back. The 161-acre landscaped township on Jalandhar bypass with focus on open green areas that was claimed to cater to the requirements of business and commerce by having shopping facilities and corporate towers along with villas, plots and mid-rise condos as part of the residential inventory, has seen slow progress of work so far. The 280-acre Imperial Golf Estate project was launched in 2011, and is being built around an international-standard golf course. According to Group Head, Himanshu Pant, the first phase of the residential estate and the golf course are almost complete. As many as 450 units, including villas, plots and independent floors are being built in the first phase, and the rest 160 would being built in the second phase. “We would be handing over the possessions within a year,” said Pant. He claimed that 85 per cent of the Phase 1 had already been sold out. The Eldeco group which began construction in 2008, of ‘Mayfair Villas’on Jalandhar bypass is offering 330 units, including 150 built up properties in its project. As many as 100 of these properties are villas, and 50 are independent floors. About 80 per cent of the construction is complete, according to company executives and 18-20 families have taken possession of the units. Meanwhile, some of the developers are planning to launch their projects once the market sentiment improves after buyers and investors return. The Earth group has a 75-acre township project on Pakhowal Road on the anvil. The pre-launch activities are already on. According Vikas Gupta, Joint Managing Director, the group has more than six projects in Delhi/NCR, both residential and commercial and more than 26 sales and marketing offices all over the country now. Ray of hope Commenting on the current scenario Soi of RPD consultants says, “While the overall sentiment is subdued, some builders like the Omaxe group seem to be doing well, with some of the floors being handed over and occupied by buyers in Omaxe’s project. Others like Imperial Golf and AerenR have also made sales, but overall the picture is gloomy. The progress of work in this projects will pick up pace only when the sales pick up and the situation improves towards the end of 2014”, he adds. Market watchers, thus, do not foresee a long spell of the current stagnant phase. Although investors are still staying away, there is an upward mobility with end-users showing interest in residential projects over the past couple of months. With little interest for large investments, there has been some movement in the past few months, and developers have managed to sell smaller residential properties in the price band of
Rs 12 lakh to Rs 30 lakh to end-users with low budget. However, end-users for bigger properties are limited. “With some purchases being made, end-users are willing to enter the market now and once the elections are over more investment will be forthcoming, but the developers have to show progress on the ground level in these projects to build a positive sentiment and cash in on it”, says Parminder Singh, a local property consultant.
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Affordable choices
If you are looking for a property in Delhi NCR within a budget range of
Rs 30 lakh-Rs 35 lakh, then areas in Ghaziabad such as Vaishali, Indirapuram and Kaushambi are worth a dekko. However, within this budget one would have to settle for a 1 BHK apartment with an average size of 600 sq ft in Vaishali and Kaushambi, while in Indirapuram one can also get a 2BHK apartment with an average size of 1,000 sq ft. Indirapuram also has ready-to-move-in options in many group housing projects. A 2BHK in Shipra Sun City Nova is available within the price bracket of
Rs 50 lakh. Raj Nagar Extension, located along NH-58 in Ghaziabad, has 2BHK units of 1,000 sq ft for
Rs 30 lakh, and a 3BHK unit of 1,400 sq ft starting at Rs 42 lakh, depending on the location. Crossings Republik, on NH-24 is another such location. One can book a 2BHK or 3BHK in the
Rs 50 lakh budget. Almost 80 per cent of the 25,000 flats planned here are ready to move in. Around 10,000 families have already taken possession and will be moving in once all the facilities are up and running. NH-24 also has several other projects of various big-ticket realty players that will be ready for possession in the next two to three years. “Those with limited budget and offices in Noida should try flats available at NH 24 and NH 58,” says Mahipal Singh Raghav, MD of MMR group. Another area in the affordable segment is Khekhra on the Delh-Baghpat highway. It is less than 18 km from Delhi’s ISBT, and a one bedroom flat in some of the projects here is available for
Rs 8.45 lakh. A 2 BHK can be booked for Rs 11.85 lakh to Rs 12.30 lakh and 3 BHK flat for
Rs 19.9 lakh to Rs 20.65 lakh. A 4BHK can be booked at Rs 34 lakh. In Haryana Sohna is a possible choice. Several realty players are offering 2BHK flats at close to
Rs 50 lakh here. “Sohna is going to be a flourishing area in the near future due to its location and the upcoming infrastructure facilities,” says Rajeev Chopra, Director of ILD Developers. Those willing to wait for two years or more should check out projects along the Yamuna Expressway. “Yamuna Expressway is a good long-term investment option for those wanting to invest in a small-ticket studio, 2BHK or 3BHK units. It offers price points that suit all pockets. The area has great infrastructure and has already hosted two F1 events. Plots here are available from
Rs 25,000 per sq yd, and units in GH projects are priced at Rs 3,000 per sq ft onwards,” says Naveen Jindal, Director of Le Solotairian, which is building flats in Greater
Noida.
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tax
tips Q. I am working as Associated Professor in a government-aided university affiliated college and owns house at the place of my posting. This house is registered in my name and currently I am living there with my wife (also working in the same college). I also have a plot in another city in the name of my wife.
Can my wife claim tax benefits u/s 80 C on this home loan separately? Will the house so constructed be shown as deemed to be let out and rental income will be shown in my wife’s ITR under the head income from house property? — prof. v.k. dutt
A. Your queries are replied hereunder: Your wife can claim benefits under Section 80C of the Income-tax Act, 1961 (The Act) in respect of the repayment of the principal amount, provided the loan has been raised from bank or other specified sources. The benefit can be claimed from the year the construction of the residential house is complete. This is because Section 80C of the Act provides that a deduction for repayment of principal amount would be allowable in respect of a residential house property, the income from which is chargeable under the head ‘Income from house property’ or which would have been so chargeable if it had not been used for assessee’s own residence. According to the provisions of Section 23(2) of the Act, where the property consists of a house or part of a house which is: (i) in the occupation of the owner for the purposes of his own residence; or (ii) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside there in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil. In the case cited in the query if it can be proved that the house is under your wife’s occupation for her own residence; it has not been let out during the whole or any part of the previous year; and any other benefit is not being derived by her from such a house, the annual value thereof shall be taken as nil. In case it is not possible to fulfill the above conditions, the annual value of the house shall be taxable in the hands of your wife. Such annual value shall have to be computed in accordance with the provisions of Section 23 which provide that Annual value of any property shall be deemed to the sum for which property might reasonably be expected to let from year to year, or nwhole of the property or any part of the property is let and the annual rent received or receivable in respect thereof is in excess of the sum referred to in clause mentioned above, the amount so received or receivable. Deduction norms in joint loan scenario Q. I have recently bought a house. I paid
Rs 3 lakh as advance money to seller in the first week of March 2013. I executed agreement in May 2013, and finally the sale deed was executed August 2013.
In March 2013, Circle Rates were
Rs 3,000 p sq ft and from April 2013 circle rates were revised to Rs 4,000 p sq ft. I have executed sale deed @
Rs 3,000 p sq ft while stamp duty in tehsil was paid at Rs 4,000 p sq ft. What would be tax implication on me? Who is eligible for taking benefit of HBA principal and interest for tax purpose and in what ratio? I am a government. employee, what will be effect on the HRA that I am receiving with my salary. Can my wife and I claim exemption/deduction of HRA while both have house property and are in government jobs. What can we do to save tax legally? — ajmer singh A. Your queries are replied hereunder: You would be liable to pay tax on the amount of capital gain which will be computed by taking into account the circle rate of
Rs 4000 per sq. ft. in accordance with the provisions of Section 50C of the income-tax Act 1961 (The Act). You will be entitled to claim the deduction in respect of the repayment of principal amount as well as interest paid on such loan as the house would be owned by you. House Rent Allowance is exempt from tax to the extent provided in Rule 2A of Income-tax Rules 1962 read with section 10(13A) of the Act. One of the requirements in the said provisions is that a person claiming exemption must have paid house rent for occupying an accommodation for his residence. It may not be possible for you to claim an exemption of HRA since you will be living in your own house and would not be paying any house rent. On the basis of facts in the query it would not be possible to save tax in respect of HRA. Q. I had purchased a plot on October 21, 2005 for
Rs 3,50,000 and sold it on November 12, 2013 for ~23,32,000. I am not a senior citizen and am a government employee. Please advise me on the following:
The amount of long-term capital gain. Can I purchase a plot or I have to purchase a constructed residential house or flat to avoid tax on long -capital gain? How much amount will
I have to spend for purchasing a house/ flat to avoid paying tax on capital
gain? Do I have any other option of saving tax? Please specify the period after which I have to invest the amount of capital gain for purchase of residential house/ flat? — asha garg A.
Your queries are replied hereunder: The amount of capital gain would be Rs
16,70,732 after deducting the indexed cost of Rs 6,61,268 from the sale consideration of
Rs 23,32,000. You will have to either purchase a residential house/flat within one year before or two years after the sale of plot or construct a residential house/flat within three years after the sale of plot so as to save tax payable on the amount of capital gain. You will have to utilise the entire amount of sale consideration i.e. 23,32,000 so as to save tax on the amount of capital gain. You have another option of investing the amount of capital gain in tax-saving bonds. These can be purchased within six months of the date of sale. These bonds have a lock in period of three years and carry interest @6%
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It can be extremely frustrating when you can’t buy a flat of your choice due to the staggering price tag. And it is all the more frustrating when you know that prices are not likely to fall. The most common refrain of house hunters these days is that even though one hears about a slowdown and a downturn, there is hardly anything affordable available when one actually starts looking for properties, especially in the NCR region. It is very true as the developers have not exactly reduced prices due to low sales. But this doesn’t mean that there is no choice in NCR region for those with a limited budget. If you can arrange
Rs 25 lakh to Rs 50 lakh or so, then you have some options on NH-58 and NH-24. According to experts those with a limited budget must look at locations such as Noida Extension, Yamuna Expressway, Raj Nagar Extension and Bhiwadi. These areas offer numerous affordable options within this price range. “If you are seeking a property for investment purpose then Bhiwadi may fit your bill. Within Bhiwadi, the areas along the Bhiwadi-Alwar highway are having good real estate development and several apartments and plotted developments are available within this price range,” says Ajay Singhal, Director Avalon group.
Now I want to avail a home loan in my wife’s name and want to construct a house there. My queries are: 
I have taken a house building loan jointly with my spouse but the property was purchased in my own name. We are paying installment from the joint account. My queries are: