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Blueprint for good days
The realty sector that has been reeling under a slowdown for the past few years is one of the main sectors waiting for the “good days” to return as promised in the BJP poll campaign. The change of guard at Centre has surely raised the hopes of realty stakeholders and the expectations from Modi government are also huge.
Prized addresses
Green
house
Summer treat for children
Make real estate investment earn for you
Blueprint for good days
tax tips How is market price of acquired land determined? Can ancestral property be willed? Should I pay tax on sale proceeds? Chintels launches subsidiary contracting company
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Blueprint for good days
The realty sector that has been reeling under a slowdown for the past few years is one of the main sectors waiting for the “good days” to return as promised in the BJP poll campaign. The change of guard at Centre has surely raised the hopes of realty stakeholders and the expectations from Modi government are also huge. While a tottering economy was one of the key reasons for the stunted growth of the real estate sector as investors remained cautious and even top notch developers had to face fund crisis, lack of effective policies also contributed to the slowdown. Now the sentiment all over is positive, but in order to channelise it effectively the new government has to work out changes at the macroeconomic policy level as well as at the customer level within the next 12 to 18 months. Here are some of the key areas that industry mavens want the new government to focus on: Affordable housing With housing shortage in urban centres being 18.78 million units and almost 95 per cent of this being in the economically weaker sections, affordable and low cost housing is going to be the acid test for the new government. Affordable housing was among the main focus areas mentioned in the BJP manifesto. “India’s housing shortage is legendary, and the Indian government has always kept low-cost housing in the focus. However, most developers have shied away from focusing on this space because affordable housing is a relatively low-margin business; and in high inflationary scenario, profitability remains a key concern. Equity participation by PE funds has also been limited in the budget housing space. The new government should look at helping quicker land acquisition, faster approvals, easy and low cost funding availability and better infrastructure to make it a more interesting proposition for developers and investors.”, says Anuj Puri, Chairman & Country Head, JLL India. Fast approvals Lengthy approval process for real estate projects has long been cited as one of the major reasons for high cost by developers and the industry has been pressing for a single-window-clearance for the realty sector. “Efficient and accountable governance in building approval process by an appropriate initiative at Centre, with all state government officials following a proper and a firm route should be on top of the new government’s agenda”, says Lalit Kumar Jain, Chairman of developers’ body CREDAI. Tax reforms Tax reforms is another area that the stakeholders expect the government to focus on. A rationalised tax regime will make housing affordable, says Sharma, while adding “Currently housing pays about 36-37 per cent of sale prices in Taxation to Centre, state and local municipal bodies in direct and indirect taxes. Fiscal reforms with FDI, ECB, REIT and mutual funds need to be focused & rationalised”. Home loans, too, should be brought under 7.5 per cent to give a boost to the housing sector, says Sharma. “The consumer is expecting reduction in home loans and rationalisation in real estate pricing. It is expected that implementation of proposed GST framework; tax benefits for buyers and real estate developers will filter downe benefitting the end buyer of affordable and mid-income projects”, says P Sahel, Vice Chairman, Lotus Green Developers Pvt. Ltd Policy overhaul Grant of Industry status to real estate sector is another demand that many industry mavens want the new government to fulfill. “The real estate industry needs to be recognised as an industry. More easy funding for real estate projects need to be allowed through the banking and NBFC sectors. There can be no collateral as secure as land or a building, and therefore, lenders need not worry so much. RBI needs to change its strict norms in this regard”, says Prashant Solomon, Managing Director, Chintels India. Stressing on the need for overhauling FSI and infrastructure norms, Solomon says, “FSI needs to be increased throughout India so that less land is needed for making more housing and commercial developments. This will also free up land to be used for green spaces and wider roads. Parking can also be shifted underground”. Sharma of CREDAI presses for a complete relook of FAR system in country on the lines of Hyderabad. “If needed land titles should be managed through online registration process which would enhance faster investment in the sector”, he adds. Though industry mavens are hopeful that the new government will bring in reforms and policies that will infuse fresh life in this sector, it will be sometime before the real impact will be visible. “No government has a magic wand which can solve all problems at once. Reforming the economy is a gradual process, and we need to be patient. A stable government at the Centre has potential to boost the sentiments and in return, attract foreign money. However, we cannot expect property prices to display the kind of sharp upward movement that were achieved before the Global Financial Crisis (GFC). Any such movement — or reduction in cap rate — is, in my belief, at least 12-18 months away”, says Puri of JLL India. So, even though the wishlist is ready the real impact of the change in government will not be reflected in the prices in real estate sector very soon.
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Prized addresses
Change has been the flavour of May in Delhi this year. A new government has been voted to power and the new Prime Minister is all set to take charge. This political upturn has also lead to a lot of shifting of homes in Lutyens’ Delhi as the new team of leaders get ready to assume office as well as enter new official residences. Some of these prized addresses carry mind-boggling price tags. On top of the list is 7 Race Course Road — the official residentce of the Prime Minister. It is spread over 12 acres and comprises five bungalows. Given the fact that the market rate of a one-acre bungalow in Lutyens’ Delhi is not worth less than ~500 crore, the 12 -acre new home of Narendra Modi is worth a staggering ~6,000 crore.
According to Sanjay Khanna, director of Kailash Nath projects Pvt. Ltd,“ Even if you have enough money in your pocket, finding a property in Lutyens’ Delhi is not at all easy. Whenever any property is available for sale here the re is no dearth of high profile buyers.” Even the properties allotted to the former PMs are not any less “worthy”. All the former Prime Ministers are entitled to 8- room bungalows in Lutyens’ Delhi and almost all of these are spread over more than 2 acre area. After living in 7 Race Course for 10 years, former PM Manmohan Singh has already shifted to a bungalow at 3 Moti Lal Nehru Road. Though it is modest in comparison with 7 Race Course, still, it is worth over ~1,200 crore according to the market rates in Lutyens’ Delhi. “Spread over more than two acres, this majestic house is very close to 10 Janpath — the home of Sonia Gandhi. Rajiv Gandhi was allotted 10 Janpath after he demitted office in 1989. It is also worth almost
Rs 1,200 crore. The market rate of bungalows allotted to Atal Behari Vajpayee at 6A Krishna Menon Marg and H.D. Deva Gowda at SafderJung Road, too, would be in the range of
Rs 1,200 crore. Currently we have three former prime ministers living in Lutyens ‘ Delhi bungalows. Real estate is commanding mind-boggling prices in this area. In a rare opening up of the market in the elite area, at least five bungalows were up for grabs till recently. Here’s a sampler of the new heights that realty rates have touched in the Capital. Built over 8,000 sq yd 17, Tughlaq Road has vast greens with the Prime Minister as a close neighbour. It is priced at
Rs 600 crore. Nearby, 13, Prithviraj Road spread across 8,543 sq yd is priced at
Rs 590 crore. Bungalow No. 45 on the same road costs Rs 480 crore for an area of 4,840 sq yds. A relatively small bungalow — 11 A/C Prithviraj Road — covering 3,171 sq yd is available at a base price of
Rs 300 crore. The big ticket size, however, is no deterrent for buyers as people are ready to pay that kind of money. “In a growing economy like ours, 15 to 20 new billionaires are added every year, and many of them are ready to pay any amount to own a posh address. So a huge demand for houses such as those in Lutyens’ zone is not unusual,” says Alimuddin Rafi Ahmad, Chairman of ILD Developers. Realty market watchers say that the high demand for an elite address in the city and extremely limited availability have sent prices spiralling. There are 1,000 bungalows in Lutyens’ Delhi and only 65 of these are privately owned. “I would say that the market price is two to three times higher than the circle rate. There is a complete mismatch between the demand and supply. Usually not more than one or two properties are up for sale in Lutyens zone,” said Sanjay Khanna. While the country’s super rich are settled at Amrita Shergill Marg, Prithviraj Road and Aurangzeb Road — where a property costs something between
Rs 6 lakh per sq yd and Rs 9 lakh per sq yd — the price in other areas like Malcha Marg, Golf Links and Jor Bagh is higher. So, change may be in the air but the craze and temptation to live in Lutyens’ Delhi will never change given the kind of social status it lends to the owners of property here.
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Pride of jungle
CS Bewli For many it may be hard to believe that there are actually ‘jungle cacti' which grow naturally in a moist and lush jungle, an environment that is almost the complete opposite of a desert. There are actually two groups of cacti — jungle or rain forest cacti and desert cacti. Plants in both these groups are very different from each other but all belong to the botanical family Cactaceae.
A lot has been written about the thorny desert cacti, the main and the most cultivated group. But due importance has not been given to jungle cacti even though there are a few extremely beautiful flowering species in this group. Jungle cacti in the genera — Epiphyllum, Ripsalidopsis, Rhipsalis, Schlumbergera and few others are leaf cacti that store water in their leaves. They are known as epiphytic and are quite different in appearance and requirements from their spine-covered desert dwelling counterparts. They have evolved in the tropical rain forests of Brazil where it is warm and humid all year round and have developed thick pad like flat segmented stems with no visible spines. As it often rains in the tropics, these plants have adapted to grow on trees and above the forest floor for survival in shady conditions. They are called epiphytic because they use their roots on trees and cling tightly to grow on trees without being parasites on them. These plants absorb moisture and nutrients from the air through their leaves to keep them hydrated. Some of them also grow on rocks and in crevices for survival and are called epilithic. Schlumbergera bridgesii, a Christmas cactus that normally flowers in December and Schlumbergera truncata, a Thanksgiving cactus that blooms in autumn are very popular jungle cacti. Due to their beauty and spine-less non-cactus like form they find place in almost all houseplants books and are a favourite with many collectors. Many plant lovers also call them “orchid cacti” because of the very large and colorful flowers. Growing medium in cultivation Compost ingredients of jungle cacti in cultivation are bound to be different from desert cacti because in rain forests as their natural habitat these plants absorb nutrients from air or from dead leaves. Hence tried and suitable compost is made by mixing: *
One part of properly washed peat to clear off the salt contents. * One part leaf mould to provide humus. *
One part thick and coarse sand with some grit for better drainage. * 10 g of bone meal in a 15 cm pot. Christmas cactus Christmas cactus is the common name of a species of epiphytic genus Schlumbergera. These are good-looking plants with a magnificent display of 5-8 cm long tubular shaped, white to pink coloured blooms. The blooming period is from December to February and the blooms last for a long period of about 3-4 weeks to add colour to the garden when most of the other cacti are dormant. They have flattened leaves with rounded teeth on the margins. This is one cactus whose top foliage can be pruned from the nodes with a sharp knife to encourage the plant to become bushy and have more clumps of blooms in the ensuing season. Pruning is carried out after the flowering period is over and when the plant is in rest. Besides growing it in pot a long lasting and a beautiful hanging basket display can also be created with the species having pendulous type of growth. It is easily propagated through stem segments. Author is President of National Cactus and Succulent Society of India. Tending tips * Keep the plant in a well-lit spot, shaded from direct sunlight, preferably on an east-facing window. *
Fertilise with 5 grams of bone meal (a slow releasing nutrient) every month during growing season during summer. *
During dormancy they should be watered very sparingly. * As it comes from a humid area, don't allow the roots to dry out completely, try to keep them moist at all times as they do not tolerate drought. *
Repot these plants every alternate year. * Compost used should be gritty and freely draining. *
During dormancy they should be watered very sparingly. Desert vs jungle cacti * Epiphytic cacti evolved in the jungles in warm and humid climate where as desert cacti evolved in deserts where humidity is low and rainfall is scarce. *
Epiphytic cactiare adapted to growing on trees to tolerate shady conditions, whereas desert cactus is adapted to full sun. n Epiphytic cacti need moist compost when in active growth and rest of the time the potting soil should be allowed to dry between watering. On the other hand the potting soil of desert cacti should be allowed to dry out between watering when the plants are actively growing.
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Summer treat for children
Kids pools are a big trend this year be it individual homes or the housing societies. Kids pools are always referred to in connection with the main pool. But even a stand-alone kids pool, otherwise would average around 8x4m. The recommended pool depth for a pool for children is 0.45m to 0.6m.
If you are planning to have a kids pool in your home or in your group housing society then it is advisable to consult a professional pool manufacturer. The pool manufacturer should conform to international standards for water quality as well as safety. From lighting to fixtures, every component should be chosen thoughtfully. One should avoid getting pools designed from equipment provider or even a civil contractor, who claim to know it all. Nowadays different kinds of tiles design are available in the market for kids' pools. Tiles with cartoon and animal characters are generally preferred. While getting a pool designed do keep your little one’s favourite cartoon character in mind. Do add rubber toys, these look beautiful in the pool. Designing a kids pool is totally different from designing an adult pool. In an adult pool you can take some liberties with the design, but in case of a pool for children no risk can be taken. While designing such a pool do avoid using slippery rock on the perimeter or having unmarked depth changes. In order to add an element of adventure to kid pool one can also add slides and water fall. In a country like ours , where people many times enjoy swimming in the night, it is essential to add lighting feature in the kids pool, so that they can enjoy swimming while remaining visible. Kids pool should always have fences, designed with self-closing, self-locking gates. There are even several electronic alarms of various designs, which should be installed whenever movement in pool water is detected. The filtration mechanism is similar to that in any other pool, but the most important thing to be kept in mind is the water circulation. Proper circulation system ensures that the water is clean. Kids have low immunity level, so properly circulated clean water saves them from many diseases. Once the kids are out of the pool and steps or ladder should be immediately removed. The rescue equipment and the first aid kit should always be kept handy. This summer give your child gift of a safe, secure, beautiful kids pool, where they can swim and play with water for hours. — The writer is MD and Technical Head Premium Pools Focus on safety Safety is a pre-requisite for any pool. With a kids' pool there are certain structural considerations, most of which apply to any pool in general. The kids pool should always have adult supervision, but certain other key things should be kept in mind: *
There shouldn’t be anything more than 12 volts operating in the entire pool surrounding area *
Changes in depths should be clearly identified by the use of color contrasted materials - tiles or patterned finishes. The colors used should not reduce the ability to see down the pool floor *
Pool deck and area surrounding the pool should have non-slip materials * Steps, handrails and ladders must be of good quality and sufficient strength and be firmly fixed. These should not have any sharp edges *
Lighting should ensure that the bottom of the pool is clearly visible and that all signs can always be seen and read . *
Check the water depth, it shouldn't be too shallow, as the kid can get hurt while diving in water. *
Barricade the pool completely. Fence of at least four feet tall should be installed, with slats close enough together that kids can't squeeze between them. Make sure there are no handholds or footholds for agile climbers. *
Secure the gate with a lock. The best gates are self-closing and self-latching. Position the latches well out of reach of children. Install an audible gate alarm that will alert the life guard if the gate is opened. *
Get an in-the-water pool alarm too - one that will alert you if anyone jumps or falls in the pool. *
If it is a private pool, then do ensure that the doors and windows leading to the pool, so kids don't have access from inside the house.
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Make real estate investment earn for you Investors buy property for the exclusive purpose of earning a profit on them. The properties in question can be residential (flats, bungalows, row houses, duplexes, etc.), commercial (offices, factory sheds, etc.), retail (e.g. mall space), non-developed or partially developed land. They have a better chance of making a profit simply because their options are wider. There is also no immediacy or urgency involved, since the basic objective is to makeprofit. They do not always intend to occupy the premises themselves, they can rent out the property until the time when they intend to sell it off at appreciated rates.
Guidelines for investors: n Location is everything. Even if rates are steeper in a preferred area, go for it. It will pay rich dividends in the final analysis. n It is always more profitable to invest in properties under construction or still in the planning stage. By the date of actual completion, rates will tend to get higher. n If one chooses to invest in residential real estate, the first preference should be flats that are located on the first floor. They should offer a good view and ventilation and, ideally, the use of a swimming pool, and other trendy facilities. Certain dynamics of the property market remain constant, so a profit is still possible. However, a ready to move in property bought for the purpose of investment will have to be given sufficient time to appreciate in value. Also, certain modifications specific to a potential customer’s needs may have to be made. The cost that this involves would have to be adjusted in the final amount. Finally, if you are new at property investment and are utilising a housing/investment loan in order to invest in property, ensure that the ratio of self-finance-to-loan amount is conducive to a future profit. Right
time to take a home loan Due to the on-going economic uncertainties, many aspiring home owners are hesitant about taking a home loan. One of the main concerns is whether it makes more sense to rent now and await a price correction. For those thinking of renting a home, there are many aspects to consider. In the first place, the affordability of both rental and purchased property is highly location and project specific. Secondly, whether it makes more sense to rent rather than buy a property would also depend on one’s future plans in a particular locality. Does one wish to settle down there or is one also open to other areas? It definitely makes sense to rent a home while one is making up one’s mind about a particular locality. If an individual is certain of a locality and is committed to settling down there, the right time to buy a home is now. There are many projects available in the new residential areas that have come up in Tier 1 and 2 cities. The watch-and-wait policy is only valid if there are reasons for anticipating a correction in a certain locality. On the whole, property rates will either remain stable or appreciate, depending on the area. Given that it is the right time to avail a home loan and purchase property, one still needs to consider the financial implications. As a thumb rule, an individual’s home loan EMI should not exceed a rational percentage of his or her net monthly disposable income. Generally, EMIs can amount to 50 per cent of monthly income. People availing home loans sometimes forget that they are under legal obligation to repay. There are numerous cases where borrowers fail to gauge their financial capabilities and the suitability of the loan that they have availed. As a result, they find themselves in debt traps and sometimes default on their repayments. Borrowers should stretch themselves only to the extent that they realistically foresee their financial position improving in a given time frame. No home loan strategy should ever be based on anticipated financial windfalls as a means to pay off the loan. If one anticipates a salary hike, even if this amounts to only a certain annual increase, one can consider a ‘step-up’ option for the existing home loan. Here, the borrower pays a lower EMI initially and steps up the repayment of the home loan in proportion to the assumed percentage increase in income.
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Blueprint for good days
David Walker, Executive Director, SARE Homes Owais Usmani, MD, Presidency Infra Heights As real estate industry is under ruthless price rise at times of double digit inflation rates, the average home buyers are thrown in a quandary. To boost demand in the housing sector, the affordable housing must be in focus. The new government also needs to focus towards implementation of Regulation and Development Bill including a review of the FDI rules in housing. Gaurav Gupta, General Secretary, Raj Nagar Extension Association & Director SG Estates Streamlining the approval process will result in quicker land acquisition and faster approvals. Implementation of proposed Goods & Service Tax framework; tax benefits for buyers/real estate developers to induce activity in the industry which is suffering from liquidity crisis and inventory overhang will also bring a wave of enhancement. It is expected that the government will take immediate action on delays on approvals of height and environment as well. Pankaj Bansal, Director, M3M India We are expectant that the new government will address the issues the real estate sector faces including revised FDI policy and Real estate regulation bill. If the government comes out with a supportive policy we expect this space to see a lot more traction and various investors to enter into the country. Pradeep Jain, Chairman, Parsvnath Developers Ltd. The sector should be given industry status this time which will ease all fund inflow. Also, we hope the government will take corrective measures to boost FDI into sector.
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tax tips Q.I had applied for a house (floor) with some private builder in NCR and have made payment of 95 per cent amount in installments from time to time as required by the builder. Now the construction of the floor is going to be completed and the builder is likely to offer possession within a short time after getting the last installment of 5 per cent. Further registration will also be got done by company after the handing over of the possession immediately. My queries are: * If I gift this house to my wife without any consideration and get it transferred in her name in company records by paying transfer fee, then can the registry be done in her name directly by the company and will it become her property with respect to the rental income and wealth. * If this house is self-occupied by her, then what will be the status? * If instead of my wife, the house is gifted to a married daughter, what will be status then? — Vijay A.Your queries are replied hereunder: *
There should not be any difficulty in making a gift of the house to your wife through the records of the builder. The property can be registered in her name after such a gift and the builder should ordinarily have no objection in this regard. *
It will become the property of your wife but any income from such property shall be included in your income in view of the provisions of Section 64(1)(iv) of the Income Tax Act, 1961 (The Act). According to the provisions the said Section, in computing the total income of an individual there shall be included such income as arises directly or indirectly to the spouse by such individual otherwise than for adequate consideration. *
The property so transferred will be includible in her wealth in accordance with the provisions of the Wealth Tax Act, 1957. *
In case the house property is self occupied income thereof will be taken as Nil and in such a case it may not have any effect on your total income. How is market price of acquired land determined? Q.My agricultural land was acquired under NH ACT-1956 for road widening in 2009 for NH-15. Full and final compensation was paid accordingly. However, I have come to know recently that some more of my land may be acquired for further widening whose notification is pending in same project. My queries are:
(a) The new compensation shall be paid as per NH Act 1956 or as per LARR Act 2013. (b) If through LARR 2013, then in my village there are two different collector rates and my land is in the lower rate bracket. How market price shall be determined?
— Manu A. Your queries are replied as under: (a) Yes, the new compensation shall be decided and paid in accordance with the provisions of "The Right to Fair Compensation and Transparency in land Acquisition, Rehabilitation and Resettlement Act 2013". The Act has come into force w.e.f. 01.01.2014 and applies even to those cases where no land acquisition award had been made prior to the said date. (b) Section 26 of the aforesaid Act deals with the determination of market value of land by the collector. The criteria specified in the said section are: *
The market value, if any, specified in the Indian Stamp Act, 1899(2 of 1899) for the registration of sale deeds or agreements to sell, as the case may be, in the area, where the land is situated; or *
The average sale price for similar type of land situated in the nearest village or in its vicinity; or *
Consented amount of compensation as agreed upon under sub-Section (2) of Section 2 in case of acquisition of lands for private companies or for public private partnership projects, whichever of the above is higher. Provided that the date for determination of market value shall be the date on which preliminary notification has been issued whenever it appears to the appropriate government that land in any area is required or likely to be required for any public purpose. The market value shall thus, in your case be ascertained in the aforementioned manner. Can ancestral property be willed? Q.We are six brothers and have inherited ancestral agricultural land from our father and paternal uncle. We three are married and have children while other three brothers are unmarried. Some portion of the land was also purchased by our father and uncle in our names. Now the three unmarried brothers have willed their portion to the children of my two brothers and not to my children. The whole of land is still common. Now my questions are:
*
Can ancestral property be willed? If it is willed then can this Will be challenged and land be divided amongst the heir as per the Hindu Succession Act. *
Will the portion of land purchased in the name of sons by father and uncle be treated as ancestral property or self-acquired when the sons had no individual source of income but the land was purchased by agriculture income? —
Raj Gupta A.The answer to your queries is as under: *
The Hindu Succession Act 1956, refers to a joint Hindu family property and provides for the rules of succession in connection therewith. Presuming that the ancestral property referred to in your query is a joint Hindu family property, the same cannot be a subject matter of Will by any co-parcener of the family. He can, however, make a Will in respect of his share in such a property. According to explanation to Section 6 of the aforesaid Act, the interest of a co-parcener shall be deemed to be share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death. Accordingly, in my view it should be possible for your brothers to make a Will of their own share in the joint family property. *
In case the land has been purchased in the name of sons with the funds of the joint Hindu family, the same should have the character of a joint Hindu family property only and the provision as explained hereinabove would be applicable. Q.We are three brothers. Two sisters have since been about ten years ago. We have a pucca house constructed on a 20 marla plot. Another 7 marla plot was allotted to our father free of cost in 1958 in the weaker section category. The house was divided equally in three parts — one for each brother. Our father and mother expired in 1988. The inherited property was covered by a boundry wall along with house. However, my share in the property was sold by my elder brother after forging my signatures. No share was given to me from the second plot also by my brother. Kindly let me know what I should do to get my one third share? I don’t want to get into a legal battle on this. — Nasib Chand A.There is no other remedy available in such a case except approaching the court to institute a case against your elder brother. The act committed by your brother is a criminal offence and must be taken up to its logical conclusion. It may not be possible to avoid the interference of the police in this case if you want to proceed legally. You can, of course, seek the mediation of a senior member of the family who may be able to get the matter settled without approaching the court. Should I pay tax on sale proceeds? Q.I am a 76-year-old retired pensioner. I have been filing my IT returns regularly. I have sold 50 per cent portion of my 6 ¼ marla built house in Chandigarh for ~51 lakh as per registry (07.01.2014). The same house was purchased by me in 1971 for ~40,000 per Registry. In lieu of the sale of the said house, I have purchased an 8 marla plot at Jalandhar for ~46.60 lakh. But I have not yet started construction on it, though I have paid about ~80,000 for the transfer of plot, site plan, non-construction fee in advance etc. The balance amount is lying in a separate saving bank account exclusively. I am not aware of the price Index. Kindly advise whether I am to pay any tax on the sale proceeds as I have not yet filed my IT return for the assessment year 2014-15. — Neeraj A.You have stated that the house was purchased in the year 1971 for ~40,000. For the purposes of computing the capital gain on the sale of said house fair market value as on 01.04.1981 will have to be determined. The fair market value as on 01.01.1981 can be estimated by an approved valuer. After the same is ascertained, the said value shall have to be indexed by adopting index for the financial year 2013-14. The notified index for the said year is 939. Presuming that the fair market value as on 01.04.1981 is
Rs 2 lakh, the indexed cost would work out as under: 2,00,000/- X 939 = 18,78,000 100 The sale price being
Rs 51 lakh, capital gain would be ~32,22,000. The capital gain tax thereon would be chargeable @ 20 per cent plus education cess of 3 per cent thereon. email your queries to
realestate@tribunemail.com
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Commercial rents likely go up Rentals for office and retail spaces are expected to increase in the coming quarters on the back of rising demand, according to a survey by RICS. Royal Institution of Chartered Surveyors, a global body for setting standards in the property sector, said in its latest report that the demand for office and retail spaces rose during the January-March quarter. “There are positive indicators in the market. The occupier demand for the first time since 2011 has outpaced the rise in availability (though marginally). This means that there is healthy demand for quality space in the market,” RICS South Asia Managing Director Sachin Sandhir said in a statement. Rents have bottomed out over the past few quarters, he said, adding that they are expected to rise from these levels. “Driven by demand across office and retail segments, rents across commercial real estate are expected to witness a hike over the coming quarters across all segments on account improving economic environment,” RICS said in India Commercial Survey for first quarter of 2014. The report said capital values are expected to remain broadly stable in the coming quarter. “The Indian economy is gradually recovering and showing signs of stability. The recent monetary policy measures undertaken by the Reserve Bank of India (RBI) have improved the course of recovery. As widely perceived, it is likely that the stable government at the Centre will help the industry to bring back reforms for the real estate sector,” RICS said. According to the survey results, the Occupier Sentiment Index (OSI) edged into fairly neutral territory at +7 following the previous value of -13, ending a run of seven consecutive negative readings. However, demand for industrial space fell during the period. “It is expected that the newly elected government will bring reforms for the sector, which is grappling with problems such as regulatory bottlenecks, rise in interest rates, limited availability of quality space and inflation,” Sandhir said. While rents are expected to rise, there are expectations in the market that transaction levels will increase. In the investment market, the Investment Sentiment Index dropped a touch to (-)8, from last quarters reading of (-)1. “Investor interest diverged between sectors, with the office segment registering material growth, while enquiries fell in both the retail and industrial areas of the market,” the report said. Despite drop in investor sentiment, RICS survey said the transaction levels are projected to increase over the next three months with the office sector looking set to outperform in the near term. — PTI Assocham suggests steps to give boost to affordable housing Aiming to facilitate affordable housing in the country, Assocham has suggested measures like grant of infrastructure status to housing sector, digitisation of land records, easing of norms for FDI in real estate and allowing insurance and pension funds to invest in the sector. “Given the slowdown in the real estate sector, additional High Net Worth Individual (HNI) investments in the sector at high interest costs and the increase in ready reckoner rates by some state governments, will only push up property prices further”. “Taking adequate and appropriate measures to increase affordable housing alternatives will not only create a GDP multiplier, but also improve the living standards of Indian citizens,” Assocham President Rana Kapoor said according to a PTI report. The industry chamber said grant of infrastructure status to the housing sector will help attract higher capital. It advocated relaxation in the conditions for foreign direct investment (FDI) in real estate and reduction in minimum capital requirement from $10 million to $5 million and minimum tenure before repatriation from 3 years to 1 year. Assocham also suggested a review of Section 43C in the Income Tax Act on taxation at circle rate and tax exemption on income derived by an undertaking, engaged in development and construction of smaller dwelling units.aBesides, it called for a review of RBI norms for project finance and uniformity in the end-user income ceiling norms for affordable housing units for EWS and LIG segments. — PTI
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Chintels launches subsidiary contracting company The Chintels Group which is in the process of developing over 600 acres of self-owned prime land in and around Dwarka Expressway bordering and including Delhi has launched a subsidiary contracting company Chintels Infracon to enable efficient backward integration for superior quality as well as efficient on-time delivery of real estate projects. Chintels Infracon is initially manufacturing CLC blocks for Chintels’ ongoing projects but may gradually diversify into electrical, interiors, metal and glazing products.
According to Mr. Prashant Solomon, Managing Director, Chintels India Limited, “Chintels Infracon was formed out of our aim to develop in-house capabilities required to deliver a project from concept to completion without relying on third party contractors. This will help us emerge as an end-to-end real estate provider.”
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As consumers continued to face inflation and high interest rates in April, average household spending seemed unlikely to recover in the near term. Subdued market sentiments looked likely to continue unless consumer confidence began to rise. With consumption accounting for a large portion of the GDP, any positive change in spending patterns could affect India's economy for the better. The major impediment to such desirable outcomes was a consumer price inflation (CPI) of over 8%, which kept interest rates high. Consequently, sentiments in big-ticket purchases-such as housing-remained subdued. Meanwhile, the Department of Industrial Policy and Promotion (DIPP) declared its intention to relax FDI regulations for construction and housing, which will potentially allow foreign investors to purchase farm land in India. According to the proposal, a company-owned and controlled by an Indian citizen-with access to foreign investment could directly buy agricultural land from farmers; while non-residents would have to purchase the same after converting the land-use to that of non-agricultural development. Office Space Update Commercial leasing picked up slightly in the month of April, with leased space appreciating by about 30% over March. The quantum was driven by a few large transaction closures in Bangalore, which contributed to more than 60% of the entire space transacted during the month. Furthermore, numerous large-sized transactions that were in advance stages of negotiation are likely to be concluded in the coming months. Among India's leading cities, Bangalore experienced the highest demand for office space in April, followed by Mumbai and Chennai. Occupier interest remained strong in micro-markets such as the ORR and Whitefield in Bangalore, the IT Corridor in Hyderabad, and Mumbai's peripheral markets of Powai, Vikhroli, Thane and Navi Mumbai. With more than 60% of demand being concentrated in back-office space, sectors such as IT/ITeS, BFSI, the manufacturing, telecommunication and pharmaceuticals continued to drive demand. SEZ developments in Bangalore and Chennai also witnessed healthy take-up during April; while rental values remained largely stable across all major micro-markets of leading cities in India.
Housing Market Update As the General Elections approachedits dénouement during the month of April, home buyers and investors expected positive policy changes likely to boost India's housing sector. In line with the preceding months, the largest quantum of new launches were observed in the mid-end housing segment-mainly in locations such as Chennai, the National Capital Region (NCR), Bangalore and Pune. Locations such as Whitefield, Yelahanka, Jakkur, and Sarjapur Road in Bangalore; Gurgaon and Greater Noida in the NCR; Wagholi, Pimple Saudagar, and Wakad in Pune; and Perungudi, Sholinganallur, Perumbakkam, and Sriperambudur of Chennai witnessed significant residential development. Capital values in the residentialmarket remained largely stable during April. — With inputs from Anshuman Magazine, CMD, CBRE South Asia Pvt. Ltd.
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For many it may be hard to believe that there are actually ‘jungle cacti' which grow naturally in a moist and lush jungle, an environment that is almost the complete opposite of a desert. There are actually two groups of cacti — jungle or rain forest cacti and desert
cacsti.m each other but all belong to the botanical family Cactaceae.
