REAL ESTATE

 

 

 


Manifesto of hope?
Sanjeev Sharma
Thinkstockphotos/Getty imagesHousing is a major agenda in the manifestoes of Congress and the BJP. This indicates positive political will. But how far it will go in changing the game for the realty sector remains to be seen
With the results of the ongoing general elections less than a month away, both the main political parties — the Congress and the BJP — have laid emphasis on the issue of housing in their election manifestos which has enthused the real estate sector that has been in a state of decline for the past two years. Thinkstockphotos/Getty images

Demolition of apex and ceyane towers in supertech project
Supertech ready to refund money to 600 apartment buyers
Realty firm Supertech said it was ready to refund money to over 600 apartment buyers affected by the Allahabad High Court order to demolish the company's two 40-storeyed towers in Noida. “We will refund money to those buyers who will approach us for the refund of their investments,” Supertech Chairman and Managing Director R K Arora told PTI in Delhi earlier this week. Asked if the court's decision had affected sales, he said: “There is not much impact.”

Supertech Chairman and Managing Director R.K Arora

Ground Realty
Ready-to-use materials
Jagvir Goyal
The fast paced life that most of us are used to now has brought in the trend of ready-to-use things. And the housing construction sector does not lag in this as here too readymade materials are getting preference over the ‘to be prepared’ ones. Flooring tiles, for example, may be ceramic, vitrified or wooden, have seized a vast segment of flooring sector only due to the fact that there is no fuss after their provision. No cutting, no grinding, no polishing — just fit and use. Similarly, readymade polish for doors has almost eliminated the traditional polish.

Shift focus to tackle housing shortage woes
National Housing Symposium 2014 organised by the PHDCCI
The PHD Chamber of Commerce and Industry organised a symposium to discuss the issues related to housing in the country earlier this week. Speaking on the occasion Dr. Sunil K. Gulati, CVO, Delhi Development Authority (DDA) called for a paradigm shift to address housing shortage in economically weaker sections (EWS) and lower income group (LIG) categories.

Decor trends
Wood wise
Aditya Gupta
While the most obvious way to choose the right furniture for your home is to pick styles, colours and textures that blend well with the existing decor style, there are a few other factors that come in to play. Moreover, wood is one of the most popular materials used in making furniture items because of its rich appearance, durability, and ease of construction. Wood furniture can be divided into solid and veneer. But, selecting the right wooden furniture for your home can be tricky. Here are some tips to help you choose right pieces:

Real trends
Senior living segment — A market with huge potential
Anshuman Magazine
India’s 60-plus population is currently estimated to be around 100 million, with expectations of touching 326 million which will constitute 20% of the total population by 2050 (source: UN data projections). Our much touted “demographic dividend”, our urban youth population, will reach a median age of about 29 years in less than a decade making us one of the youngest nations globally.

Tax tips
Right way to invest sale proceeds from agri land deal
S. C. Vasudeva
S. C. Vasudeva
Q. I have a piece of agricultural land which is in use for cultivating crops. I intend selling the same and want to shift to Uttarakhand where I would like to invest the amount realised on the sale of the agricultural land to buy some agricultural land. How can I utilise capital gain arising on sale of such agricultural land if the same is invested in buying another piece of agricultural land?

Guest column
Keep an eye on the quality of construction

The quality of construction and that of the construction material is one of the major concerns of all home buyers. It is vey common to diah out substandard and low quality construction to the buyers in the name of affordable housing. As a result a home becomes more of a liability rather than an asset for a buyer. Leaking fittings, brittle walls, seepage in rooms are just some of the things that can turn one’s dream of owning a house sour.

Realty bites
IndiaHomes raises Rs 150 crore, to expand to 50 major towns
Property broking portal IndiaHomes has raised Rs 150 crore from US-based venture capital firm New Enterprise Associates (NEA) and two existing investors. IndiaHomes, which started operations in 2009, is present in Delhi, Gurgaon, Noida, Mumbai, Bangalore and Kolkata, is planning to expand its presence to other major cities This is the second round of private equity fund raising by the company. It had earlier raised Rs 120 crore from Helion Venture Capital and Foundation Capital.

Loan zone
Will I get the exact amount as loan?
S. C. Dhall
Q. How do banks decide on the amount of home loan for a particular house? Do they give the exact amount that we apply for? — C. Mohan
A. The home loan eligibility for a particular house is determined by the bank based on the valuation arranged by them through values appointed by the bank. Your loan eligibility is also based on your income, your regular outgoings and repayment track record. Your overall loan eligibility will be restricted to 80-85 per cent of the cost of the property.

Launch pad
The Cadence in Bhiwadi

Paradise Infrasolutions Pvt. Ltd., has launched its nature-led residential project — The Cadence — in Sector 106 A, Bhiwadi recently. The project will have modern 1, 2 and 3 BHK apartments and luxury penthouses.


Price index Faridabad

 





 

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Manifesto of hope?
Sanjeev Sharma

Housing is a major agenda in the manifestoes of Congress and the BJP. This indicates positive political will. But how far it will go in changing the game for the realty sector remains to be seen

With the results of the ongoing general elections less than a month away, both the main political parties — the Congress and the BJP — have laid emphasis on the issue of housing in their election manifestos which has enthused the real estate sector that has been in a state of decline for the past two years.

A study of the manifestos of these two parties reveals that there is a great deal of focus on housing and irrespective of which formation forms the government, the sector is in for a big policy push. While the exact contours of the government and its policy initiatives will become clear after May 16 when the results are out, the real estate industry is expecting that the formation of a new government will act as a trigger to lift sentiment in the short term and the focus on housing will provide impetus in the long term.

All for affordability

The Congress manifesto has a separate section on housing. “We will work towards providing affordable and quality housing for all sections”, it says. “We want to give all poor households the ‘Right to Homestead’,” the Congress has promised. A homestead is a dwelling especially in a farm setting.

It says that Indira Awaas Yojana will be expanded to cover all poor rural households and the Rajiv Awaas Yojana will be expanded to cover all poor urban households. “We will make efforts to ensure that title deeds are given to those who have been living on lands for more than two decades”, it adds.

Continuing on its rights -based theme, the Congress has assured that to ensure every person has a roof over his head, it will bring the Right to Homestead. The Rajiv Awaas Yojana will be expanded to cover all poor urban households in 250 cities by 2017. For building new homes, financial assistance will be provided not only to construct a pucca house but also set up drinking water connections and sanitary facilities.

The BJP in its manifesto has a section on “Housing — No Longer a Mirage”. The party promise in the manifesto goes like this: “We will roll out a massive low-cost housing programme to ensure that by the time the nation completes 75 years of its Independence (2022), every family will have a pucca house of its own”.

The BJP pitch is for encouraging the housing segment through policy, credit and subvention schemes. “It will be an innovatively designed scheme that dovetails various existing programmes and also encourages the housing sector by appropriate policy interventions and credit availability , including interest subventions, where necessary”, it says.

The BJP has also assured that the proposed programme will further ensure that these houses are equipped with the basic facilities of toilet, piped water supply, electricity and proper access. It will prioritise all resources towards this goal and leverage on land as a resource in urban areas and demand for unskilled labour in the rural areas.

Pinning hopes

Industry believes that a massive push for affordable housing by the government across the country will involve a public private partnership (PPP) model. Manish Agarwal, Managing Director, Satya Developers says that as per a study, for urban areas, the housing shortage is estimated to be around 18.78 million households. To bridge this gap, not only a fundamental policy change is essential but also a voracious and viable PPP model needs to be established.

In addition, the other tools to boost housing will be tax breaks, credit availability and subvention schemes.

Also, experts say that as the economy and sentiment improves after the new government is formed, it will also provide a push for real estate demand. And as more infrastructure gets created through roads, power, the potential for more real estate development in areas further away from the cities will also be tapped.

According to R Nagaraju, Executive Vice President, Unitech, “India will need to spend more than a trillion dollars over the next two decades in urban housing and infrastructure to meet the demands of a rapidly urbanising nation. It is ,therefore, imperative for the new government to kick-start the investment cycle in housing, roads and other urban infrastructure projects by providing an investor friendly environment”.

Miles to go

Industry says the new government will have to improve sentiment and the next few years will be crucial for achieving the ambitious target of housing for all.

It is heartening to note that this subject has found prominent mention in the manifestoes of the leading political parties,” adds Nagaraju.

Rohit Raj Modi, Officiating President, CREDAI NCR and Director, Ashiana Homes says, “We welcome the thought process of political parties over the need for housing for each household. While rural population has done better, urban areas has witnessed increase in number of homeless population”.

Modi says not only will the government have immediate task of restoring the confidence of various stake holders of economy in general and the real estate sector in particular , but they will also have to roll out a well conceived and inclusive policy for housing.

The real estate sector has been going through a tough phase over the past couple of years with declining sales. The industry is hoping that post elections, sentiment will improve. Sumit Berry, Managing Director, BDI Group, said that the need of the hour was to provide impetus to the sector in order to drain away negative sentiments associated with it.

As promises on paper the points mentioned by both the parties indicate a positive attitude, how far these promises are actually kept will only be seen once the battle of the ballot is over and a new government is in place. Till then the industry, the buyers and all the other stakeholders are keeping their fingers crossed.

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Demolition of apex and ceyane towers in supertech project
Supertech ready to refund money to 600 apartment buyers

Realty firm Supertech said it was ready to refund money to over 600 apartment buyers affected by the Allahabad High Court order to demolish the company's two 40-storeyed towers in Noida.

“We will refund money to those buyers who will approach us for the refund of their investments,” Supertech Chairman and Managing Director R K Arora told PTI in Delhi earlier this week. Asked if the court's decision had affected sales, he said: “There is not much impact.” The Noida Authority has sealed the two towers — Apex and Ceyane —comprising a combined 857 apartments, of which 600 were sold. The towers are part of Supertech’s Emerald Court project. On April 11, the court had ordered the demolition of the two buildings in Noida and the refund of money to apartment buyers in response to a petition that alleged their construction had violated the law.

Supertech will move the Supreme Court next week, challenging the high court order, Arora said.

He maintained that construction of the towers was according to the approved plan and was authorised.

A division bench comprising Justice V K Shukla and Justice Suneet Kumar ordered the demolition of the two towers erected in Sector 93-A of Noida as part of the Supertech Emerald Court Complex “within a period of four months”. The complex has residential premises and shopping establishments.

The court also ordered that money be refunded to all those who had invested in the two towers “with 14 per cent interest compounded annually.”

The judgement was passed while allowing a writ petition of the Emerald Court Owners Resident Welfare Association, which alleged that the approval and construction of the towers was “in complete violation of the UP Apartment Acts”. The petitioner claimed the Noida Authority had given permission to raise the height of the towers, which were supposed to have only 24 floors, without maintaining the mandatory distance of 16 metres from an adjoining building block, making it “unsafe, apart from blocking air and light.”

Meanwhile, expressing concern over the gravity of the situation for buyers Rohit Raj Modi, Officiating President, CREDAI-NCR said all the parties concerned should wait for the final judgment before drawing conclusions in this incident. In a statement he said, “The Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act was notified in 2010, while the rules were framed in 2011. The judgment seems to have ignored the fact that there were a number of projects launched before that dateline and phase-wise construction of those projects was in progress. On the one end, the rules were not properly communicated, on the other, there were overlapping of rules. All of this created confusion among the developers. While we welcome the Act, we, at CREDAI NCR, call upon the government to provide clarification on the overlapping rules in the Act to avoid such incidents in future”.

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Ground Realty
Ready-to-use materials
Jagvir Goyal

The fast paced life that most of us are used to now has brought in the trend of ready-to-use things. And the housing construction sector does not lag in this as here too readymade materials are getting preference over the ‘to be prepared’ ones. Flooring tiles, for example, may be ceramic, vitrified or wooden, have seized a vast segment of flooring sector only due to the fact that there is no fuss after their provision. No cutting, no grinding, no polishing — just fit and use. Similarly, readymade polish for doors has almost eliminated the traditional polish.

Taking a cue from the present trends in the housing sector, manufacturers are coming out with new products that not only ensure a hassle free use but also enhance the life of the building. A few such materials, available in the market, are explained here:

Ready mix mortar

Plastering of walls is a major activity in the construction of the house. Once the brick and RCC structure has been erected, plastering of walls begins with cement- sand mortar. Mortar is a mix of cement, sand and water which has to be prepared at site everyday. Sometimes, there are problems due to the non-availability of sand also. Keeping this major requirement in mind, manufacturers have come out with ready mixed dry mortar in the market. Ready mix dry mortar for plaster contains polymer additives and is supplied in bags. One needs to just add water to it and use it. Ready to use mortar mix can be used both on inner and outer surfaces of walls.

Readymade walls

Manufacturers have also come out with readymade walls that can be erected at a very fast speed. These walls are made of fiber reinforced aerated cement concrete and fiber reinforced cement boards. Aerated concrete is sandwiched between the boards. Thus these walls are much lighter in weight than brick walls, their weight being almost 25 per cent of the weight of brick walls. Ready made walls are joined together through tongue-and-groove joint, leading to efficient construction. Before being cleared for use, these walls are tested for fire resistance and sound insulation. Readymade walls can be used as internal walls in residences as well as in commercial and office buildings. These walls are produced in 2 inch and 3 inch thickness. The panel sizes are of 8, 9 and 10 ft height and two ft width. The walls can be finished with normal paints or emulsions or wall papers.

Crack repair mix

Cracks often appear in the wall plaster after some time and extend to longer lengths in irregular shape if not repaired immediately. Though plaster cracks cause no structural harm to the building, these can lead to ingress of water and adversely affect the appearance of walls. In normal course, the general trend to repair such cracks is to fill them with a paste prepared by mixing white cement with water. Building material manufacturers have now come out with ready-to-use paste for sealing the cracks. The paste consists of acrylic polymers mixed with fiber glass and can be used to fill cracks on inner as well as outer surfaces. To repair the cracks properly, these need to be cut in V shape before filling. Cracks of up to 3 mm width can be filled with this material and 3 mm is a significant width. The crack filling can be done by using a spatula or trowel. No dilution of the paste should be done.

Waterproofing protection

Like the interior surfaces, exterior surfaces of walls can also be protected from moisture by creating a waterproofing protection membrane on them. This material consists of acrylic polymers to which fibers are added to make it stronger. The material is produced in liquid form for ready-to-use application on exterior walls. For the primer coat, it can be diluted with water but for further coats, no dilution should be done. Primer coat as well as main coat can be applied with brush. Regular painting work proceeds thereafter. Care has to be taken to ensure that the material is not applied during rains and all dust or loose material is removed from the walls by wire brushing before its application.

Joint sealant

Joint sealants are another acrylic emulsion material used to seal the joints in brick masonry, concrete, wood and anodised aluminum. These effectively make the joints waterproof. Just like silicones, these are available in small tubes. These are white in colour and can be used to fill joints of 4 mm width to even 25 mm width. On drying, these get converted into flexible rubber like seals that have high durability. For good performance, these should be filled in joints with a sealant gun.

Concrete improver

Many companies have now come out with liquid waterproofing compounds that are added to concrete before pouring it into beams, columns and slabs. Liquid waterproofing compounds are commonly known as LWP compounds. These are added to cement-sand mortar also before its use in plaster work. These compounds not only enhance the waterproofing property of concrete but also lend strength to it. Concrete turns into an impermeable material which ensures protection of steel reinforcement in it from getting corroded. Just 75 to 100 ml of this material has to be added for each bag of cement used. That’s why these are supplied in 1 or 5 liter capacities only.

Thin plaster

A new material to do thin plastering of concrete walls has been launched by some cement manufacturers. Benefit of using this material for plastering of concrete walls is that no hacking of concrete walls is required when this material is used. Generally, before plastering concrete walls, we hack them all over with a chisel so that proper bond with plaster could be created as concrete surfaces are normally smooth in comparison to brick walls. If thin plaster readymade material is chosen for plaster, no hacking of walls needs to be done. Another benefit of this material is that its thickness is just 3 mm to 6 mm instead of normal plaster thickness of 12 mm plus. Thus it proves economical too. Third benefit of thin plaster material is that it doesn’t require any curing. Painting work can be started on it just 24 hours after its application. Thin plaster material is ready mixed material and one needs to add just water to make a cohesive paste for applying on the walls or ceilings.

Load reducing blocks

Construction material manufacturers have launched autoclaved aerated concrete (AAC) blocks in the market which can be used in multistoreyed buildings having RCC framed structures. AAC blocks can replace the bricks used in walls in such structures. These are very light in weight and thus are produced in 2 ft x 8 inch size. The thickness of these blocks can be chosen as 3 inch to 12 inch. Their main benefit is fast construction and light weight which leads to economical design of structures due to reduced dead load. As these blocks are solid in nature, chasing can be cut in these blocks to accommodate fixtures.

Dampness-proofing barrier

Repairing of walls damaged by the dampness is a demoralising and wearisome job. Once dampness invades a house, costly plastic emulsion paint on the walls also get damaged. To nip the evil in the bud, a damp-proofing barrier like material has been launched by some companies. A few coats of this material on the wall plaster, before the start of painting work, creates a waterproofing barrier that prevents the entry of moisture up to a certain pressure. Breath-ability has to be an important property of such barriers to allow the moisture to evaporate instead of its accumulation behind the barrier. Luckily, the water-proofing barriers are breathable too. This ready-to-use material is just to be mixed with water to achieve the required consistency for brushing or trowel application, as guided by the engineer. The primer coat has to be applied with brush. For the further damp proofing coats, trowel is used as consistency of the mix is kept higher now.

— This column is published fortnightly

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Shift focus to tackle housing shortage woes
National Housing Symposium 2014 organised by the PHDCCI

The PHD Chamber of Commerce and Industry organised a symposium to discuss the issues related to housing in the country earlier this week. Speaking on the occasion Dr. Sunil K. Gulati, CVO, Delhi Development Authority (DDA) called for a paradigm shift to address housing shortage in economically weaker sections (EWS) and lower income group (LIG) categories.

At the National Housing Symposium 2014 in New Delhi, Gulati emphasised that a huge percentage of cost of housing construction goes into stray activities amounting to a huge housing shortage in EWS and LIG categories that needed immediate attention.

“The industry has to be made responsible to provide housing for the labour force. There is a need to propagate rental housing that would cater to the large migrant population in cities. Rental housing should be freed from the Rent Control Act and the industry should have a share in rental housing. There is a need to go for vertical expansion of Cities in order to address the issue of land” Dr. Gulati further added.

Gulati stressed that in order to address the shortage of housing “20 to 25 per cent FAR should be earmarked for EWS/LIG categories. DDA should be allowed to demarcate & measure land; Peri Urban areas should be developed and rural housing shortages should be addressed. Proper documentation should be introduced in rural areas through the introduction of ‘Titling Act’; the Lal Dora areas should be revised every 20 years.”

Alok B. Shriram, Senior Vice-President, PHD Chamber in his welcome address stated that “housing plays a very important role in the economy. The provision of good quality ‘Housing for all’ is an urgent need that requires immediate attention. Political process needs to be initiated to arrive at meaningful solutions to urban issues such as housing. ”

Rajeev Talwar, Chairman, Housing & Urban Development Committee, PHD Chamber delivered the ‘Industry Perspective’ and emphasised on “immediate need for policymakers to focus on mitigating housing shortage by amending FAR. There is a need to amend rules and regulations that hinder housing projects.” — TNS

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Decor trends
Wood wise
Aditya Gupta

While the most obvious way to choose the right furniture for your home is to pick styles, colours and textures that blend well with the existing decor style, there are a few other factors that come in to play. Moreover, wood is one of the most popular materials used in making furniture items because of its rich appearance, durability, and ease of construction. Wood furniture can be divided into solid and veneer. But, selecting the right wooden furniture for your home can be tricky. Here are some tips to help you choose right pieces:

Quality: When browsing through the available choices at a furniture store, make sure that your chosen furniture items are made of high-quality wood in accordance with your budget. Ask questions about where the material has been sourced from and take a look at the certification that comes with your furniture.

Design: One of the things that make the biggest impact when you choose wood furniture for a modern living room is the design. The right design for your home will be one that is in perfect sync with your existing decor.

Placement: When a piece is going to be placed in a family room and used every day, it needs to be durable. Choose wisely, since you’ll be opening and closing the drawers or doors often. But if it is going to be an accent piece in a little-used guest room, durability is not as important as shape and size.

Usability: You should look to pick items that will have significant functionality for you, as you will be spending a sizeable amount of money for your new furniture. When buying chests, display units, center tables or dining tables, make sure that you pick a design with lots of intelligent storage options incorporated to enhance the functionality and usability of your furniture, giving you more value for your money.

Construction quality: This is mainly determined by two characteristics — method of joining parts of the wooden item and sturdiness of the item. The joints should be tight without any glue showing.

Finish quality: A quality finish involves three main steps — sanding, staining, and finishing. If any one of these steps is not done properly, the finish does not look as good as it should.

Selecting quality seating: There are three components that distinguish a sofa. These are the frame, the seating support and the filling. Not only do these structural details determine the comfort of your sofa, they also determine how long your sofa will last in your home.

— The writer is Founder of The Furniture Republic

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Real trends
Senior living segment — A market with huge potential
Anshuman Magazine

India’s 60-plus population is currently estimated to be around 100 million, with expectations of touching 326 million which will constitute 20% of the total population by 2050 (source: UN data projections). Our much touted “demographic dividend”, our urban youth population, will reach a median age of about 29 years in less than a decade making us one of the youngest nations globally. Such benefits, however, come with their own realities — and in a couple of more decades we would have an equally large aging population. In addition, there has also been an aspirational change in the mind-set of senior citizens in general, with an increasing desire to lead a secure, independent life after retirement spent in the company of like-minded peers. Enough ingredients for retirement/senior citizen homes to be recognized as a sunrise segment by India's realty market.

Over the years, this transformation has been gradually translating into an opportunity for real estate developers to provide residential products customized to the specific needs of the elderly in India. What this demographic group needs over and above financial and emotional security is healthcare facilities, geriatric care and security services. Such assisted living/retirement home projects are especially sought by elderly couples seeking a better lifestyle with accessibility to healthcare; elderly non-resident Indians (NRIs) desiring to return to India on either a long-term or a short-term basis; and the elderly without any family support. Other unique requirements of a senior living project include an apt social environment anda peaceful location that is preferably on the peripheries of a leading city-close enough to major healthcare facilities yet far enough from the hustle of city life.

Senior housing in India is usually available in large-scale formats of 10-60 acres, mid-scale formats of 4-10 acres, and 1- 4 acre small-scale projects; while financial models are available in sale, lease as well as rental models. Typically suchhousing units vary from 50-100 units in a project to a maximum of 400 units within a single project; and most of these are in the 1-2 BHKformats, with unit sizes ranging between 500 sq.ft.and 1,000 sq.ft.at an affordable pricing range of Rs 10-30 lakh. The key challenges for developers launching senior citizen housing projects in the country are mainly the affordability factor and the lack of trained manpower sensitive to and capable of handling such projects.

Developers already working in the Senior Citizen housing sphere in the country include Covai Properties, Ashiana Group of Builders, Brindavan Senior Citizen, Senior Citizen Foundation and Classic Promoters, among others. Realising the potential that the segment has to offer, leading developers such as Tata Housing have also ventured into this space, with two of its senior living projects already under construction in Bangalore and five more in the pipeline in the same city. Tata Housing also has three upcoming projects in Chennai. Going forward, more developers are likely to realize the potential of this segment and a subsequent increase in the number of launches of such projects is expected as the segment matures across the country.

There exists a vast untapped potential in India for alternative asset classes, such as senior housing projects. Significant investment from private developers is expected in such segments, as they look towards expanding their footprint beyond conventional real estate asset classes.

While such new formats might see a comparatively slower pace of expansion vis-à-vis other formats such as Tech Parks and Logistics Parks, the growth of this sunrise segment is imminent in the long-term, given a sustained demand for the same from a large aging population in decades to come.

— The writer is CMD, CBRE South Asia Pvt. Ltd.

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Tax tips
Right way to invest sale proceeds from agri land deal
S. C. Vasudeva

Q. I have a piece of agricultural land which is in use for cultivating crops. I intend selling the same and want to shift to Uttarakhand where I would like to invest the amount realised on the sale of the agricultural land to buy some agricultural land. How can I utilise capital gain arising on sale of such agricultural land if the same is invested in buying another piece of agricultural land? — Ujagar Singh

A. Under Section 54B of the Act exemption from capital gain tax is available on transfer of agricultural land if:

  • Such agricultural land is owned by an individual, and
  • Such agricultural land was being used by an individual himself or his parents or a HUF for agricultural purposes in the immediately preceding two years, and
  • The capital gain arising on the transfer of the land is utilised in the purchase of agricultural land within two years after the date of the transfer.

The amount of exemption under the aforesaid Section is equivalent to the amount of capital gain arising on the transfer of the agricultural land or amount invested in purchasing new agricultural land, whichever is lower.

Capital gain tax calculation

Q. Kindly clarify the following points: Case 1

I A sells his house falling in notified Municipal Area and with the sale proceeds buys a farm house near his agricultural land from B.

(i) Is A not supposed to pay capital gain tax?

(ii) Is B also exempt as he sold his farm house situated in the area not falling within the ambit of Capital Gain Tax Act?

Case 2

I In a notified Municipal Area A had in his own name purchased a house in 1990 for Rs 5 lakh and on HUF partition in 2013 that house was allotted to B under a Civil Court decree.

(i) On sale of such house by B in 2014 for Rs 2 crore; what will be the capital gain tax liability, and whether A or B will be required to pay tax? — M. S. Nagra

A. Your queries are replied hereunder: a) I presume that the term ‘notified area’ used by you in the query means that the agricultural land (which was sold) is not situated within the area (measured aerially) specified in sub-clause (iii)(b) of clause (14) of Section 2 of the Income Tax Act 1961 (The Act). Clause (b) of the said section was amended by Finance Act 2013 and is applicable for assessment year 2014-15 relevant to financial year 2013-14. Replies to your queries are therefore based on such presumption.

(i) A is not liable to pay tax on capital gain arising on the sale of his house provided the amount of capital gain is utilised in its entirety for purchasing the farm house within two years after the date of the sale of the house.

(ii) In case the agricultural land on which farm house has been constructed is situated beyond a distance 8 km from the local limits of municipality or cantonment board or such other limits as are specified in the aforesaid sub-clause, B will not be liable to pay tax on the capital gain arising on the sale of the agricultural land beneath the superstructure. However, he would be liable to pay tax on capital gain arising on the sale of the superstructure.

(iii) B has become the owner of the house by virtue of the partition of HUF. Therefore, B would be liable to pay tax on capital gain arising on the sale of the house. Indexed cost of house on the basis of figures given in the query would work out at Rs 25,79,670. Long-term capital gain on the said basis would be Rs 1,74,20,330. Tax of Rs 35,88,588. @20.6 per cent would be payable thereon.

Help me in assessing the right value of property

Q. One of my friends had inherited a residential property in 2007 and plans to sell it in 2014 for a consideration of Rs 90 lakh. The property was acquired by his father in 1960 as a plot and the construction of house was carried out in 1980-81. The value of the property as on April 1, 1981 has been got assessed by a valuer as Rs 5 lakh. Kindly intimate the amount of capital gain tax required to be paid by him. — Raj Kumar

A. It is evident from the facts given in the query that the residential property was held for more than three years, and therefore, the capital gain arising on the sale of such residential property would be treated as a long-term capital gain.

However, there is difference of judicial opinion on the subject whether the cost inflation index should be applicable from the date of acquisition of the property by the original owner or from the date of inheritance by the present owner of the property. The Hon'ble Income-tax Appellate Tribunal in a few cases has held that the benefit of cost of inflation index should be allowed to an assessee from the date of acquisition of the property by the original owner. Therefore, in case such liberal interpretation of the Explanation to Section 48 of the Act is taken, the cost inflation index should be applicable from the date of acquisition by your friend’s father. Therefore, in such a case the cost inflation index would be applied taking 1981-82 as the base year. The indexed cost of the property on the said basis would work out at Rs 46,95,000 and the long term capital gain would work out at Rs 43,05,000. The total capital gain tax would be Rs 8,86,830.

Do I need to pay tax

Q. I have sold one plot in 2013 for Rs 14.75 lakh. This plot had been transferred in my name after my mother’s death. She had been allotted the plot by HUDA in 2006 for Rs 5,39,479 payable in installments. The last installment was due in 2013 and was paid on due date. Kindly advise whether any capital gain tax is payable on this transaction. I am an unemployed engineer and have no other source income. What will be the total amount of capital gain tax to be paid by me how I can get an exemption? Total amount paid to HUDA, including interest, is about Rs 6 lakh. I have invested the whole amount jointly with my father for the construction of a showroom.

— A reader

A. The facts given in the query do not indicate the date of possession of the plot allotted to your mother by HUDA. In case the possession was given in the financial year 2013-14 when the last installment was paid, the capital gain arising on the transfer of the plot would be a short-term capital gain liable to be taxed at the slab rate applicable to you. On the basis of the facts given in the query, the short term capital gain would work out at Rs 9,35,521. The amount of total tax payable thereon, including surcharge for education cess, will be Rs 1,20,617. The computation is based on the presumption that you did not have any other income and you are not a senior citizen. The tax can be saved only in case of long-term capital gain. In the given case it is not possible to save tax as the capital gain is short-term.

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Guest column
Keep an eye on the quality of construction

The quality of construction and that of the construction material is one of the major concerns of all home buyers. It is vey common to diah out substandard and low quality construction to the buyers in the name of affordable housing. As a result a home becomes more of a liability rather than an asset for a buyer. Leaking fittings, brittle walls, seepage in rooms are just some of the things that can turn one’s dream of owning a house sour. Thus it is all the more important for a new home buyer to ensure that his dream house has a sound foundation. Following are the few pointers that a home buyer can use to judge the construction quality:

Focus on Quality

Any developer focused on quality will not spare costs when it comes to providing detailed finishing and intricate detailing, both in the building’s common areas and within the residential units. Developers who pride themselves for quality construction would ensure highest quality CP fittings, window frames, door handles, electrical outlets etc. Here, quality does not mean only in raw material, it means quality in everything —from the people recruited, to contractors and architects hired and supervision.

Keep an eye out for the brands used for common facilities such as elevators. Well established manufacturing brands will be under a maintenance contract by a reputed facilities management agency.

Focus on Strength

  • Strength of a building structure is very important. A quality construction project is designed in such a way that the weight of the overall structure is distributed evenly and scientifically. The quality of the concrete used in a building depends on what grade of concrete has been used, what the concrete/sand ratio is and whether the concrete was allowed to cure for a sufficient amount of time.
  • The plaster strength should be of the highest standards with the use of high percentage of coarse sand, giving it the strength to hold AC units, LCDs. A simple test for this is the failure to drive a nail in a a wall with a simple hammer and there should be no cracks in the plaster on drilling.
  • According to international codes, the partition walls, along with the brick work, should also have steel bars to ensure the optimum strength.
  • Pressure tests of the piping joints are a must to ensure minimised or no seepage concerns

Focus on design

  • The presence of sufficient open areas and landscaping has a direct bearing on the quality standards followed by a developer. The availability of open areas implies that the builder has not filled up every available square foot with sellable construction, and that he intends to provide a wholesome and pleasing experience to clients.
  • The rooms, and the unit plan should have a rectangular shape rather than square, to maximise space utilisation
  • The leveling and sloping of the whole project, along with the balconies and washroom floors, needs to be maintained in such a manner that there is no water logging. This increases the life of roads, tiles and walls immensely.

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Realty bites
IndiaHomes raises Rs 150 crore, to expand to 50 major towns

Property broking portal IndiaHomes has raised Rs 150 crore from US-based venture capital firm New Enterprise Associates (NEA) and two existing investors.

IndiaHomes, which started operations in 2009, is present in Delhi, Gurgaon, Noida, Mumbai, Bangalore and Kolkata, is planning to expand its presence to other major cities This is the second round of private equity fund raising by the company. It had earlier raised Rs 120 crore from Helion Venture Capital and Foundation Capital.

“We have decided to expand our operations to 50 major towns in India. We have raised Rs 150 crore private equity led by NEA. Our existing partners Helion Venture and Foundation Capital have also invested,” IndiaHomes Founder and Managing Director Samarjit Singh told PTI.

NEA contributed more than half of the total amount raised by IndiaHomes, Singh said, adding NEA India Senior Managing Director Bala Deshpande would join the company’s board.

On fund utilisation, he said the company would use the proceeds on expansion to 50 cities, technology improvement and brand promotion.

Helion Advisors Sr Managing Director Sanjeev Aggarwal said this is the third investment in IndiaHomes as it was satisfied with the company’s growth.

IndiaHomes offers a complete turnkey of services to its customers in both the primary as well as secondary real estate market. It also help customer in getting bank loans apart from core buying/seeling/rental of residential properties.

The entire range of service is offered free of cost to the customer.

Aranya gets 5 start rating by CARE

Unnati Fortune Group’s The Aranya has been granted 5 star rating from CARE (Credit Analysis and Research Ltd.)

CARE Ratings provide the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations.

Located in Sector - 119, Noida, right beside FNG Expressway, the project comes with a luxury modern city lifestyle amidst verdant greens that offers excellent connectivity to Delhi and surrounding areas. Uniqueness of the project is that it makes extensive use of green housing technologies that utilises ambient natural resources such as light and air to power devices. The project also has in place internal mechanisms for recycling and reusing water in a systematic planned manner, all of which leads to reduced energy consumption and saving on the operating and maintenance costs.

Possessions begin at Gulmohur Garden Phase-I in Raj Nagar Extension
The SVP Group has received the completion certificate for its premium residential project Gulmohur Garden Phase-I in Raj Nagar Extension, Ghaziabad. Following this the developer has started offering possession for 720 flats in the project. Gulmohur Garden Phase - I has all the necessary facilities and amenities of a premium home. Spread over 15 acres, the project is just half a kilometer from the 6 lane expressway and offers one and two BHK apartments. — TNS and Agencies

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Loan zone
Will I get the exact amount as loan?
S. C. Dhall

Q. How do banks decide on the amount of home loan for a particular house? Do they give the exact amount that we apply for? 
— C. Mohan

A. The home loan eligibility for a particular house is determined by the bank based on the valuation arranged by them through values appointed by the bank. Your loan eligibility is also based on your income, your regular outgoings and repayment track record. Your overall loan eligibility will be restricted to 80-85 per cent of the cost of the property.

Q. I would like to re-model my flat interiors. In addition to getting a home loan, is there any provision to get another loan towards repairs? — Anupam Sharma

A. It would be difficult to get a loan in the manner in which you suggest. Another way to achieve a similar objective is to ask the seller to do the refurbishment and you pay for them as a part of the sale price. Of course, the bank will value the flat independently at the time of purchase and the valuation that they get may not necessarily take these alternatives into account.

Q. I want a home loan for a flat of 325 sq. ft. My annual income is Rs 2.75 lakh. One of the banks told me that a home loan is not given for an area less than 450 sq. ft. Is that true? — Shiv Raj

A. Banks can have their own criteria for loan eligibility. There are no regulatory criteria prescribed for this purpose.

Q. I purchased a house opting a joint loan with my wife from a bank. My wife is also the co-owner of the property. Later, if my wife wishes to transfer her share of the house in my name, will she have to inform the bank?

— Pawan Kumar

A. Absolutely. Any change in ownership can only be done with the consent of the bank. It will also involve stamp duty and registration expenses.

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Launch pad
The Cadence in Bhiwadi

Paradise Infrasolutions Pvt. Ltd., has launched its nature-led residential project — The Cadence — in Sector 106 A, Bhiwadi recently. The project will have modern 1, 2 and 3 BHK apartments and luxury penthouses.

Sunil Sharma, Director, Paradise Infrasolutions says, “Shelter creation for the common man is our inspiration. Innovative technology, ethical principles, transparent terms and conditions, all are put together to conceive our maiden project. Spread across 15 acres of land providing 72 per cent greenery and the perfect serene environment everyone is looking for in their fast paced lives.”

The project is likely to be completed by 2018. The booking prices of 1, 2 and 3 BHK is from Rs 2111 per sq ft onwards. The company is also offering early bird pre booking discount of Rs 100 per sq ft. for a limited period only.

Arihant South Winds at Planet Surajkund

A luxury residential project with extraordinary location on price range Rs 8045/- sq. ft (BSP)

NCR-based developer Arihant Group has announced the launch of its Rs 175-crore Arihant South Winds at Planet Surajkund, Sector-41, Faridabad. Spread over 1.65 acres, this twin tower luxury residential project will have 72 units with per unit size ranging from 2275 sq.ft, 2685 sq.ft and 3295 sq.ft and will consist of 3 BHK, 3 BHK + servant quarters and 4 BHK. Possession of the flats will be offered by 2017. There will be three flats on each floor along with two lifts.

The project is located at Planet Surajkund which is an upcoming locality in Faridabad and is only 1 km (approx) from the proposed metro station at Sarai Khwaja. Surajkund is just 10 minutes from Delhi and is well connected with the rest of NCR. The proposed metro line will further enhance the connectivity of the area.

Speaking on the occasion, Kaushal Jain, MD, Arihant Group, said, “We have incorporated all aspects of luxury living in this project.

“The City Club” at Indore project

DLF group unveiled “The City Club” at Gardencity, Indore on April 13. Spread over 2.5 acres, the club offers facilities like swimming pool, restaurant, bar, spa and massage, lawn tennis, gymnasium etc.

On the launch of the club, Rajeev Singh, Business Head- UP & MP, DLF Universal Limited said, “It is a place where the Gardencity residents can indulge, unwind and network. We are excited about the launch of the club as our approx 1300 customers for the first time in this region will witness the lifestyle DLF offers in all its residential developments.” Gardencity, New Indore is located on the Agra Bombay By-pass and spread over 192 acres.

— Based on information provided by the developers

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