 |
|
| REAL ESTATE |
|
|
Airport plans sway realty
The trend, which started about two years back with the setting up of the airport, has increased lately with ongoing expansion of the airport, promising to make it an even more sought-after place in the times to come.
Work on half-a-dozen hotels has already begun and many more are in the offing. Businessmen are also eyeing this stretch for setting up showrooms and commercial complexes, jacking up realty rates. Says Gurbhej Singh a property dealer: “Ever since work started on the airport, prices have shot up. As of now, land rates vary between Rs 15,000 and Rs 30,000 per square yard on Ajnala Road leading to the airport. Even on the link roads, the price is Rs 1 crore per acre.” “The only apprehension of prospective buyers is that their land may be acquired if it is located too close to the airport. Land prices have not changed on the Ajnala Road beyond the airport,” he adds. “Even though land prices have gone down manifolds because of the overall slump in the market, there are just a few takers. A host of residential colonies are coming up in the area and the trend in likely to continue with businessmen from outside buying land for commercial use,” says Ranjit Singh, a realtor. With both government and district administration showing interest in developing the area as part of expansion of the airport, prospective land buyers feel this is the best bet for investing money, he says. Work has already begun on Phase II of the master plan to give the airport a new look, with more passenger facilities and increased security features. Apart from providing better amenities to the passengers, cargo-handling facility being developed at the airport will prove beneficial for exporters from the region. This would also mean development along the entire stretch of Ajnala Road Arun Talwar, Airport Director, says there has been an increase of 40 per cent in the number of international and domestic passengers at the Amritsar airport last year. “The airport is developing at a fast pace and travellers from the region can look forward for better facilities once the expansion plan is implemented over a period of seven to eight months. There are already 10 per day, which include eight international and two domestic flights,” he says. As part of the expansion plan, the total area of the terminal building is being increased to 31,000 square metres, which will be more than double the existing area. This will provide adequate space for multiple arrivals and security holds. A large number of tourists are already taking the road and in the times to come this entire area will be dotted restaurants, hotels and marriage palaces. Besides, with the trend of moneyed people moving out of the walled city, the area is witnessing a combination of commercial and residential development, says Rajinder Bhandari, another local land developer. People have already had a bitter taste of investing at the 'now announced and later cancelled' airport projects. Learning from the past experience, no one is taking much interest in buying or selling property around Sahnewal, where the SAD-BJP government proposes to construct an international airport in place of Laddowal and Halwara. Tales of massive losses, suffered by the investors in scrapped projects, are in circulation. A Ludhiana-based businessman is in severe depression after buying an acre of land near Halwara for Rs 2.5 crore. This day, the same piece of land is pegged at Rs 80 lakh. No boom is being witnessed in the property sale-purchase business at Sahnewal. Those having land are clinging to it, hoping to reap rich dividends in case the project is approved and land prices skyrocket. Buyers, too, are waiting for the opportune time to buy land. It would be too risky to invest now as the proposal has to pass through many processes and spanner can be thrown in at any stage. Mohd Iqbal Channa of Sahnewal sums up the mood of the investors. "No new deal has been struck. There are no buyers and sellers. People are keeping their fingers crossed about the future as no one wants to gamble huge amount at this point of time." He said he tried to effect a sale of 5 acres of land worth 3 crore but could not. A. Jain, an industrialist having sizeable portion of land near the airport, says he will prefer to wait for the windfall. "The government is committed to acquire land at market prices. So the present owners do not feel they would be at loss to delay the land deals." Randhir Singh of Sahnewal reveals how his position has changed after the announcement of the airport. " Earlier, I used to enquire from property dealers if there were any buyer for my land situated at fair distance from the airport. Now the property dealers keep asking me if I am interested." While Sahnewal offers at least some hope, there is distress at Halwara. When the Halwara airport plan was going in full swing, there were no sellers. Now, there are no buyers.
|
||||||
|
Rates reach astronomical heights in Navi Mumbai
The cost of land in Navi Mumbai has reached astronomical heights with a bidder bidding Rs 1,01,000 per square metre for a plot of land belonging to the City and Industrial Development Corporation (CIDCO).
The satellite city will soon have a seven-star hotel and a world-class mall on this plot of land. The cost of land has increased because of the proposed airport and the unaffordable real estate prices in Mumbai. The plot of land at sector number 20 at Vashi near Kharghar belonged to CIDCO and when the tenders were called, no one expected the cost to be so high. Even CIDCO officials were surprised to know that the cost quoted was Rs 101,000 per square metre for the 7,014 square metres plot. The plot of land was bought through tender by Shah Builders and the Somaiya Trust, who have purchased a similar plot of land for Rs 91,111 per square metre. Shah Builders chairman Nalin Shah said: “We will be constructing a world-class mall, the biggest one in Vashi, that will be designed by foreign architects and also a seven-star hotel that will be the major landmark for the area.” Somaiya Trust chairman Shantilal Somaiya said: “I am happy with the result and with Shah Group as our partner we will succeed in all our plans.” According to Shah, many national and international brands are inquiring about the mall and some other developers have offered a huge premium for the plot of land. The builders of the area, who did not wish to be named said: “We do not know why such a price has been quoted and how the real estate prices in the townships will be affected.” The total cost of the two plots of land is Rs 135 crores and the previous high for the area was Rs 45,000 per square metre around a year back, which has more than doubled. — UNI
|
|||||||
|
Decks cleared for Fab City
Acting cautiously in view of the controversy following certain allegations made by the opposition against the promoter, the government has made it clear that it would play a pivotal role in the development of India’s first chip manufacturing facility rather than leaving the entire responsibility to SemIndia. The much-awaited government order (GO) has asked SemIndia to play the role of an anchor industry on the land. The government will allot the remaining 1,100 acres in the Fab City to other developers. SemIndia has been asked to develop infrastructure for attracting companies in the land. Assembling, testing, marketing and packing units will be set up with an investment of $75 million within 18 months providing employment to 2,000 persons. Under phase II, a semi-conductor chip manufacturing unit will be set up in three years thereafter, engaging another 1,000 persons. In phase III, an advanced semi-conductor plant with an employment potential of 5,000 will be established within five to seven years. The government had announced last year that it would allot 1,200 acres of land near the upcoming Hyderabad International Airport at Shamshabad for the Fab City. Under the MoU signed with SemIndia, the government had agreed to allot 300 acres but the area has been reduced to 100 acres, which is given on an 88-year lease at a nominal rate of Re 1 per acre per year. The company has also been offered other concessions including subsidised electricity and water supply. The GO was issued days after main opposition, the Telugu Desam party, raised doubts about the project and SemIndia president and CEO Vinod Kumar Agarwal had to rush here from the USA to allay the apprehensions. Blaming the government for the delay in launch of the project, he said that the work could begin only after land was handed over to his company. Agwaral has welcomed the government order. “This will help us to start executing our projects immediately. We will also work along with Andhra Pradesh Industrial Infrastructure Corp (APIIC) to plan and implement the Fab City as a world-class semiconductor manufacturing cluster. This will also help the state of Andhra Pradesh to emerge as the leader of high tech manufacturing,” he said.
— IANS
|
|||||||
|
Acquisition in Andhra
Relief and Rehabilitation Package is claimed to be the first of its kind in the country, says
Ramesh Kandula
Andhra Pradesh has taken up massive land acquisition for ambitious projects, sans any incidence of violence a la Nandigram. Though lands are being acquired on large-scale across the state for irrigation projects and Special Economic Zones (SEZs), there have been no signs of protests. The Rajasekhar Reddy government has embarked on a gigantic task of acquiring nearly 6 lakh acres for implementing its pet programme "Jalayagnam", aimed at completing 50 projects within five years to provide irrigation facility to an additional 75 lakh acres at a cost of Rs 75,000 crores. This ambitious initiative is estimated to displace 17.50 lakh persons from nearly 700 villages. "This is a staggering figure. But, we are going about the task in a very sensitive manner. Almost the entire process of land acquisition is being done through consent route and not by forcible means," a senior official in the revenue department said. So far, over 2.55 lakh acres of land has been acquired and the process for taking over another 1.50 lakh acres is at an advanced stage. While Gujarat allowed entrepreneurs and industrial houses to acquire land on their own to avoid conflict with farmers, Andhra chose a different route. The state government has come out with a comprehensive Relief and Rehabilitation Package, after the opposition parties, more prominently the left parties, castigated the land acquisition process for the Outer Ring Road in Hyderabad. The R&R policy, claimed as the first of its kind in the country, aims at minimising displacement and providing for allotment of land for land, free house site, grants for house construction, transport and wages for varying periods to the displaced persons. While affected persons can get land for land to a maximum of 2.5 hectares within the same district as compensation, their other benefits also include free house site of 150 sq meters, Rs 40,000 as house construction grant, displacement grant of 240 days minimum wages, Rs 5,000 transportation grant and Rs 3,000 cattle shed grant. These facilities are in addition to the compensation payable to them for land acquisition. According to officials, a significant chunk of the project cost is now earmarked for rehabilitation package routinely, which has made the acquisition process smoother.
|
|||||||
|
GROUND REALTY The strength of a building depends on Damp Proof Course, commonly called DPC, says Jagvir Goyal Four things that every house builder dreads are termites, cracks, leakages and dampness. These occurrences take the house-owners breath away. Though post-affliction remedies are available, yet the joy of living in a trouble free house is lost and the owner keeps looking for reappearance of any of these. Take extra care during construction itself to eliminate all chances of occurrence of these evils. Let us consider dampness first. In case a builder is not using RCC-framed structure and is providing brick foundations, Damp Proof Course (DPC) must be laid well to stop rise of dampness by capillary action. Here are a few valuable guidelines: Check diagonals
When the foundations of the house have been filled up to the DPC level, perform the checking of diagonals of each room before laying the plinth beams or the DPC. Check both diagonals of each and every rectangular room to be equal. If both diagonals of a room are not equal that means its walls are not at right angles to one another. As this is the only stage when this correction can be carried out, ask the mason to find out the error and correct it. Otherwise a skewed room will be created forever. When a diagonal cannot be measured due to some obstruction like a column, check each corner angle to be at 90 degrees by simple triangulation method.
Check the level
Before laying the DPC, get the brickwork checked in water level. Keep in mind that top level of the DPC of internal walls is the plinth level of the building. If you have created a pillar with plinth level marked on it take its reference and get the levels of internal and external walls checked. Keep in mind that all walls are not at same level and the level of external walls is kept 6 inch below the level of internal walls and also at least 6 inch above the ground level.
Proper thickness
Damp Proof Course (DPC) should be kept 1.5 inch thick. The concrete used for it should be 1 : 2 : 4 or 1 : 1.5 : 3. Prefer to add water-proofing compound to it. Use 10 mm size coarse aggregate called jeera in it. Don’t use 20 mm size. Must see that the sand used is quite coarse. In technical terms, it should have a minimum fineness modulus of 2.5 or more. Keep the water content of DPC concrete as low. This will help in avoiding flowing out of cement slurry. Let the volume of water be 31 to 32 litres per bag of cement. This will help in keeping the slump below 3 inch.
Strong support
Generally the side supports required to confine DPC are provided haphazardly, leaving wide gaps between the supports and the walls. This allows the cement slurry to flow out. Allow no gap between the supports and the walls. Provide sufficient supports behind the side supports so that when the concrete is compacted, side supports don’t give way.
Save doorways
Never lay DPC in doorways. Door sizes should be marked accurately on the brickwork. If laid in the doorways, DPC interferes with the flooring and has to be dismantled. Connect the DPC of internal walls and external walls through steps. Lay DPC on these steps also. It should be a complete and closed band. Only then it will prevent dampness from rising up.
Vertical DPC
All external walls should be provided with vertical DPC on their inner side. Vertical DPC is in cement mortar, not in concrete. The cement mortar ratio should be 1:3. The thickness should be between 12 and 20 mm. The purpose of vertical DPC is to prevent the entry of moisture through that portion of external wall, which falls above external DPC but is below the plinth level and thus comes in contact with the filling done inside the rooms below the flooring. Though it is very important to provide vertical DPC yet it is often found missing. Extend the vertical DPC from each external wall to both internal walls meeting it, up to a length of 50 cm along the internal walls. This is a safety precaution against rise of moisture.
Bitumen
Mostly, bitumen is applied on all DPC, may be horizontal, over the walls, or vertical. It should be applied only when curing of DPC has been done for at least seven days and thereafter two days are allowed for DPC to dry off. Bitumen should never be applied over wet or damp concrete. Bitumen is available in many grades. Use 85/25 grade bitumen for applying over DPC. Don’t use 80/100 grade generally available with road making gangs. Numerator (85) is the softening temperature of bitumen. Denominator (25) is the penetration of bitumen. Bitumen should be applied well in a way that about 4 kg of it gets consumed over 3 square meter area of DPC. Immediately after applying bitumen, sand should be applied over it. This way, two coats of bitumen should be applied.
PMC Coating
Prefer to use Polymer Modified Cementitious coating over bitumen to waterproof the concrete layer of DPC. This is a two-part compound that can be mixed at site before its application to concrete. It is greyish in colour and has excellent adhesion to concrete. It is flexible and breathable and covers 8 to 9 sq. ft. area with 1 kg per coat. Prefer to apply two coats of it. It can be applied on wet surface with a brush and proves better than bitumen.
Plinth beams
If you plan to provide plinth beams instead of DPC, match top level of these beams with the floor level. See that the beams over all walls together make a band as it will help in earthquake resistance and avert some effect of differential settlement of foundations on the building. Keep the concrete mix for plinth beams as M20 or 1:1.5:3. Provide a minimum of two steel rods each at the top and bottom faces with diameter of steel as 10 mm or more. Provide 6 to 8 mm diameter steel stirrups with their spacing not greater than 300 mm. Keep width of beams equal to width of walls. Keep a depth of minimum 6 inches. Go ahead. Happy building! The writer is Superintending Engineer (civil), PSEB. He can be reached through www.jagvirgoyal.com
|
|||||||
|
New Jammu emerges
Planned townships provide an impetus to growth, says Prabhjit Singh
The new addresses of Jammu are Greater Kailash, Sainik Colony and Chhanni, the townships that are emerging fast as the new destinations, growing parallel to the 30-year-old established posh colonies of Gandhi Nagar, Shastri Nagar and Trikuta Nagar. These new townships, emerging fast on the city outskirts along the widening national highway, are witnessing three-folds increase in the residential and commercial land prices. Sainik Colony had come on the plan outlay of Jammu in 1969 with the constitution of a housing society of the working defence personnel and ex-servicemen, but could not grow for over two decades as the members could not settle down for long. The colony finally began to grow over the last two to three years when the Ex-servicemen Cooperative Housing Society introduced a clause that the householders could resell plots or houses. This move encouraged the residents of the old Jammu city on the other side of Tawi river to settle down in a new planned township. The prices rose threefolds, leading to a boom in the business. With 7,000 plots (in Sainik Colony), mostly of 12 marlas, over 50 per cent have been sold, while the rest are being bargained, dictating a price tag of Rs 15.2 lakh for a plot of 12 marlas. “The price of the same plot was Rs 5 lakh just years back, says 50-year-old Jaswant Singh, the owner of one of the houses in Sainik Colony. His father had bought a plot over three decades back, being an ex-serviceman. He pointed out that Sainik Colony has come in the Municipal Corporation limits now, which led to development in the area. Secondly, persons from congested and unplanned colonies of old Jammu city preferred to move out to planned colonies after the ’05 earthquake. Similarly, Greater Kailash is growing adjacent to Sainik Colony but with bigger plots, catching the attention of those in real estate. The prices can be haggled between Rs 1.5 lakh and Rs 2 lakh per marla. Apart from these two distinct residential colonies, Janipur and Talab Tillo on the other side of Tawi river are also expanding with new housing societies. Meanwhile, Jammu has got Bahu Plaza, a unique landmark in the form of a modernised commercial complex.
|
|||||||
|
Estate talk R. Suryamurthy Subhiksha is the country’s largest retail chain. Within a decade, the retail chain from South has made its presence across the country. The no-frills shop clearly has the first mover advantage as several retail giants are entering the multi-billion dollar retail sector, which has traditionally been the stronghold of the unorganised sector. R Subramanian, Managing Director of Subhiksha, in an interview with The Tribune outlined the strategy and plans to increase presence in North India. Excerpts: Q: You are a first generation entrepreneur with engineering and a management degree. You own the largest retail chain in the country within a decade. Can you tell us how it all happened and the reason for the success of Subhiksha? A. There is no great logic behind entering the retail market in 1997. We made a study of two areas - software and retail. Between software and retail, we thought we were a bit late for software as Satyam, Infosys, Wipro, TCS, had already established by then. We didn’t want to be a small and late entrant. In retail, we will be one of the early entrants, so we have the learning curve to our advantage. We allocated a Rs 5 crore (Rs 50 million) corpus and entered the retail business. In March, 1997, we opened our first store in Thiruvanmiyoor in Chennai. Our business is extremely local. We can’t sit in Chennai and run a store in Chandigarh. Today, we have 700 plus stores in all the places that we had planned. It will go up to 1000 stores in the next few months. Q: What differentiates your business model in the fast growing retail sector from others? What is the future of discount retailing and what is your driving mantra? A. Our business model envisages setting up multiple outlets in every target city in neighbourhood locations as opposed to either hi-street stores or malls. Even in Chandigarh and Mohali we are the only retail chain that has more than 25 stores. In Ludhiana we have 18 stores and more are being set up. Q: What are the weaknesses you have identified? Are there any plans to sell the products online again? A. One of the weaknesses that we identified has been related to stock levels in a few cities. Our entire team is live to this and are working with a huge amount of data to ensure that we manage our logistics better. There has been a significant positive movement in this direction. We are also working towards online presence. Q: Are you worried with the entry of Wal-Mart, Reliance in the retail sector? Do you think that there will be a major shake out? Do you foresee mergers and acquisitions? A. Ultimately Wal-Mart or others are also going to be run by people like us. The point is you need not worry about anybody’s entry. There is a huge potential for growth in India. There is potential for another 10 persons to come in. Ultimately, the share of the un-organised kiryanas will come down and the share of organised sector will go up because of the efficacy in buying and distributing. But a lot of the organised chains that you see now may merge with others or get acquired. In a low margin business such as this, building scale is important. We are also looking to acquire chains that help us meet objectives faster. Q: In the wake of competition how do you set Subhiksha apart from others? How do you plan to sustain the concept of Every Day Low Price model? A. Subhiksha’s consumer-focused no-frills approach to the business of daily shopping allows huge savings on overhead investments as well as running expenses, while its unique direct supply arrangements with manufactures further reduces supply-chain costs helping it sustain the EDLP model. Q: What is the kind of investment being planned in the next few years? What are the turn over projections by then? And what is the expansion plan, especially in North India? Are there any IPO plans? A. We have invested approx Rs 500 crore so far in first two phases of expansion and this should see us through for our first 1,000 outlets. Till 2010, we aim to scale up business to approx 2,000 outlets and this will require an additional Rs 500 crore of investment. Between internal accruals and an IPO that is slated later this year, we are confident of raising funds. For North India, apart from Delhi, we are already present in several towns of Punjab, Haryana and Western UP and have over 200 outlets between these areas. Within a year, by expanding both width of reach across more states like Rajasthan, and more cities in Punjab, Haryana and Western UP as well as our depth in key cities like Delhi and Chandigarh, we will be effecting a 50 per cent jump in the number of outlets in North.
|
|||||||
|
Humble kiryana shops have an edge
Even as companies have lined up investments worth over $20 billion in the country for their organised retail businesses, the small ‘kiryana’ (grocery) stores still have an edge over their much larger new-age counterparts on profitability measures.
Seeking to tap the multiplying purchasing power of Indian consumers, more and more companies are keen to enter the domestic retail market with plans to start or expand organised retail businesses. The Indian retail space is set to witness massive investments worth about Rs 84,000 crore over the next four years from corporate giants like Reliance Industries, Bharti-Wal Mart, Aditya Birla Group, Pantaloon and Shopper’s Stop, according to domestic research firm First Global. However, a comparison of operational performance or profit margins of small neighbourhood kiryana (grocery) stores and large-sized organised retailer shows that the neighbourhood provisions stores are enjoying much better operating performance. Although, the organised retailers enjoy much lower cost of goods, small grocery stores operate at a much higher operating margin, First Global’s Associate Research Director Hitesh Kuvelkar said in a report. Among various expenses, organised retailers enjoy lower cost of goods, their overall profit margins are much lower than the kiryana stores due to higher costs related to employee salaries, administrative costs, rentals as well as marketing and promotional expenses, the study shows. Although, the new age retail stores score with a large variety of products and low-cost goods, the local kiryana shops with their personalised service make it difficult for the modern retailer to maintain profit margin, it added. According to First Global, cost of goods account for 88-90 per cent of total expenses in case of mom-and-pop stores, as against 75-78 per cent for currently operating organised retailers like Big Bazaar and Vishal Megamart. The organised retailers enjoy much lower cost of goods as compared to kiryana stores, primarily because they buy their goods directly from the source and there is no middleman involved. Accordingly, they save a lot on the cost of goods and are able to offer discounted goods to maximum retail price (MRP). However, the employee salaries are barely 2-3 per cent of total expenses for kiryana stores, as against 6.5-7.5 per cent for organised retail stores, which also spends about 7-8 per cent on promotional and marketing expenses. A higher employee requirement and the scarcity of right talent leads to further increase in the employee costs for organised retailers. In comparison, kiryana stores have almost zero expenses on marketing and promotion fronts. The administrative expenses, including lease rentals for shops and godowns, are also higher at 1.5-2 per cent for organised stores, as against 1-1.25 per cent for kiryana stores. According to the study, the kiryana stores are working with overall profit margin of 8-10 per cent, as against 7-8.5 per cent for organised players. “Kiryana stores enjoy much lower overheads, primarily employee cost, selling and distribution cost and lease rentals, as compared to organised retailers, which gives them an edge at the profitability front,” Kuvelkar said. Besides, small grocery stores operate in an unorganised market where factors like tax evasion further aid the bottomline growth, the report said. Given the gargantuan expansion plans announced by the aspiring retail players, concerns are genuinely being raised on whether organised retail stores would be able to attract enough customers away from the neighbourhood grocery stores to get the desired returns. The US giant Wal-Mart and India’s Bharti group are together planning to invest close to Rs 30,000 crore by 2010-11, Mukesh Ambani-led domestic conglomerate Reliance Industries has lined up 25,000 crore. Birla Group is also investing Rs 15,000 crore, Kishore Biyani-led Pantaloon Retail is investing about Rs 4,000 crore and another Rs 10,000 crore is coming from Hero Group, Shopper’s Stop and other players in the same period. “We believe that with the entry of industry majors like Reliance, Bharti-Wal Mart and AV Birla group, the competition is bound to intensify. However, in order to create value for the investors, it is quite pertinent for the retail companies to sustain performance at the margins front in the coming years,” the report said. In the end, the ability to attract the unorganised retail customers toward the organised retail market would be the determining factor and decide the future outcome for organised retailers. — PTI
|
|||||||
|
Completion certificate is essential
Housing sector has been the recipient of a large number of fiscal incentives in the past few budgets. However, the recent hike in interest rates has left many aspirants fuming
It is estimated that every rupee invested in housing adds 78 paisa to the GDP. Further, attractive tax advantages for housing loans makes them ideal vehicles for tax planning for individuals and Hindu undivided families. House loanees must also keep in mind the following points with regards to their newly acquired property: House property completion certificate from some local authorities is required to get deductions under the Income Tax Act. In the absence of such certificate, the proof of occupation by the occupation date, electricity bill, telephone bill, ration card of new address, water charges bill, gas connection documents, can also serve as proof of completion and occupation of house property. Any service fees or other charges (i.e. processing fees) in respect of the money borrowed can be treated as interest and is deductible under Income Tax Act. To claim this deduction, a certificate about the service fees or any other charges, is required from the loaning agency. Under Income Tax Act the power-of-attorney holder is the ‘deemed owner’ of the property and is eligible for tax benefits. Tax deduction is available for the payment of stamp duty, registration fees and other expenses for the purpose of transfer of such house property in a financial year in which construction of the property is completed. If the construction of house is not completed in the same financial year, deduction is respect of these payments is lost permanently. Here is good news for those who transfer their loans from one source to another source due to change in interest rates. If a new loan is taken to pay off an existing loan, which has been taken to acquire or construct the house property, the deductions will continue to be available on the new loan. Here it should be noted that the first loan repayment must be paid off by new loan not by personal funds. In case of a house loan to government employees from the government, the payment procedure of loan is unique.
— The writer is a Bhiwani-based professor
|
|||||||
|
TAX tips By S.C. Vasudeva Q. I had earned certain amount as LTCG, which has been invested at the time of booking a house under a group housing project. Will the gain be deemed to have been invested for the purpose of saving tax? The house is likely to be completed with in three years, but for some reason, if a builder delays the possession and the three years period is exceeded, what will be the consequence for no fault of mine. Whether the time limit of three years prescribed for construction of the house applies to the house to be acquired through a builder? — R.K. Sharma A. It is not evident from your query whether the investment of LTCG has been made in a flat to be built by a co-operative society or by any other institution, the scheme of allotment and construction of which is similar to the Delhi Development Authority. If it is so, the acquisition of flat will be taken as a case of construction of a residential house for the purpose of Section 54 as well as Section 54F of the Act. The Board has issued circular 672, dated December 16,1993, on these lines. In such cases, therefore, period of three years will be available for investment of LTCG. However, in case the acquisition of a residential flat is from a private builder it will be a case of buying a residential house and, therefore, the period of two years will be applicable. The delay on the part of builder in giving possession within a period of two years will be a technical non-compliance of the provisions of the Act and the capital gain so invested may become taxable in the year in which the period of two years expire. Purchase of plot
Q. I intend to buy a plot in Panipat. Being an employee with a multi national company, I have the facility of taking loan to buy such plot. Will I be entitled to a deduction against my income under Section 80C of the Act in respect of loan instalments payable against such loan repayment. — K.K. Malhotra, Chandigarh A. Section 80C of the Income-tax Act, 1961, (the Act) provides for a deduction within the overall limit of Rs 1 lakh for the repayments made towards the amount borrowed for the purposes of purchase or construction of a residential house property, the income from which is chargeable to tax under the head ‘income from house property’ or which would have been so chargeable if it had not been used for the assessee’s own residence. On the basis of the above provisions, no deduction will be allowable under Section 80C of the Act against the total income in respect of repayment of amount borrowed for the acquisition of a plot.
Share in HUF
Q. My father and his brother inherited HUF property from my grandfather. After my father’s death last year, my mother along with my two brothers and two married sisters, inherited his share in the said property. After my father death, my uncle wants to sell off all joint property and immigrate to USA. Please let me know if he can sell his share of property. All properties are undivided and not demarcated. What will be the share of each person in my father’s property? — Rajan Kuthiala A. The query sent by you does not have complete details. The inheritance of the property by your father’s family gives an indication that there was a partition of the HUF property on the death of your grandfather. On the other hand you have indicated that all properties are undivided and not demarcated. The reply to your query is on the presumption that there was no partition and the bigger HUF of your grandfather is in existence with your uncle having substituted your father as karta of such HUF. In such a case, your uncle being karta of HUF will have a right to sell the HUF properties but before he does so, your can claim the partition of the HUF which will enable you and other legal heirs of your father to claim the share of HUF property belonging to your branch of the HUF. I may point out that till a partition of HUF property is effected, the shares of co-parceners are not defined.
PIO remittance
Q. My daughter is a US citizen now. She had sent dollars to her NRE account and a plot was bought in Mohali paying by the NRE account in 2000. In 2007 this plot was sold and the proceeds were deposited in her NRO account in the same bank Capital gains bonds were bought using part of this money. She now wants to buy another plot on instalments, with the balance of the money lying in her account. Will she be able to repatriate the sale proceeds when she sells this later plot? Secondly, she had bought some agricultural land when she was an Indian resident over 20 years ago. Will she need RBI permission whenever she wants to sell this agricultural land? — Surinder Singh, Chandigarh A. A person of Indian origin can remit an amount not exceeding $1 million per calendar year out of the balances held in NRO account/sale proceeds of assets on the production of: (a) Documentary evidence in support of the acquisition of assets by the remitter. (b) A tax clearance/NOC from the Income-tax Authority for the remittance. In view of the above provisions of the Foreign Exchange Management (Remittance of Assets) Regulations 2000, it will be possible for your daughter to repatriate the sale proceeds when she sells the plot. As to the agricultural land, which was bought when she was an Indian citizen, she may transfer such agricultural land to a person resident in India who is a citizen of India in accordance with the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable property in India) Regulations, 2000.
Purchase by NRI
Q. I am Canadian citizen. I sold agricultural land after it came into Notified Area Committee, which is approved for multi-storeyed flats. My question is whether capital gains will be exempt, if using these gains within two years of sale, I purchase agricultural land, which is less than 8 km from Municipal Corporation. In other words, is the farmland, within 8 km from Municipal Corporation imits, considered agricultural land or not from income tax point of view. — Harcharan Jhauj A. Section 54B of the Act provides that where the capital gain arises from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his for agricultural purposes, and the assessee has within a period of two years after that date purchased any other land for being used for agricultural purposes, then, in respect of capital gain being charged to income-tax as income of the previous year in which the transfer took place, the same shall not be so charged if the amount of capital gain is equal to or less than the cost of the new agricultural land so purchased. However, in case the capital gain is greater than the cost of the land so purchased, the difference between the amount of the capital gain and the cost of the agricultural land so purchased shall be charged as income under head ‘capital gains’ for the previous year in which the transfer took place. The exemption from capital gain can, therefore, be claimed only if you satisfy the aforesaid condition. In case you do not, the capital gains as arising on the transfer of the agricultural land shall be taxable in the year in which the transfer takes place.
|
|||||||
|
Buzz on Bourses
New Delhi: Real estate investment company Yatra Capital Limited has announced its foray in India with plans to invest Euro 21.6 million (around Rs 120 crore) in a joint venture firm. The joint venture company set up with Kolte Patil Developers will develop three residential sites in Pune, a company statement said. Yatra Capital is an Indian property fund based in Jersey and is listed on Euronext, Amsterdam. “The venture opens our investment account in India and is in alignment with our strategy of partnering experienced developers to create shareholder value for Yatra,” Yatra Capital Chairman Nigel Broomfield said.
— PTI
Sankalpan pact with UK co
Mumbai: Corporate design consultancy provider Sankalpan Group is likely to form a joint venture company with a UK-based joinery manufacturer. “We are in advanced stage of talks with a UK company and are likely to sign the joint venture by next quarter,” Sankalpan Group Founder and Chairman Ninad Randive said. Joinery is the part of woodworking that involves the joining together of parts of wood. The 50:50 venture would set up a joinery wood furniture manufacturing facility in India. “We will be acquiring a manufacturing unit,” he said without giving details.
— PTI
JP Morgan to invest in Chennai
Mumbai: JP Morgan Property Fund, which has mobilised over $300 million to focus on Indian real estate, is going to set up a residential project in Chennai, at an estimated cost of Rs 400 crore. Chennai-based realty developer Arihant Foundations and Housing will develop the residential property, which will be spread over 45 acres of land, in a joint venture with JP Morgan. The venture will have 50:50 equity participation from both partners, Arihant Foundations informed the BSE.
— PTI
Konecranes engineering centre
New Delhi: Finland-based Konecranes, a leader in lifting devices, has set up an engineering centre in Pune to serve as a global interface for design and other services between customers and manufacturing facilities. The $2 billion company also said it would also look at investing in a manufacturing unit in India eventually. It does not make tower cranes.
— IANS
Emami in realty
Kolkata: Emami Group has embarked upon a massive diversification plan, investing Rs 3,500 crore in paper, hospital, retail, real estate, cement, power and bio-diesel sectors in the next two to three years, besides the FMCG sector, the company’s core business. Emami Group Director Aditya Agarwal said that the company had identified realty as another potential business opportunity. A wholly owned subsidiary called “Emami Realty” had been floated to lead this business.
— UNI
Ansals ink deal with Deyaar
New Delhi: Real estate developer Ansal API has forged a joint venture with Dubai-based realty firm Deyaar Development PSC. The company signed a memorandum of understanding (MoU) to develop a mega township comprising residential, commercial, institutional and industrial properties in the country. Deyaar will take 40 per cent stake in the project, Ansal API said in a press note.
— PTI
Tatas tie up with Jafza
New Delhi: Dubai-based Jafza International has said it has tied up with Tata group company Tata Realty and Infrastructure Ltd (TRIL) to develop business and logistics parks across India. The Dubai-based company, a part of the Economic Zones World, has signed an MoU with TRIL to establish a joint venture company for developing and operating the proposed business and logistics parks, Jafza said in a statement.
— PTI
Zion complexes in Faridabad
New Delhi: Real estate firm Zion Promoters and Developers has said it will construct two residential complex in Faridabad. Stonecrop apartments, spread over 10 acres of land, will have a total of 600 apartments while Celeste Garden has got 200 apartments, the company press note said. The company has developed projects in Gurgaon, Faridabd, Sonepat and Panchkula, it said.
— PTI
Fire Capital to invest $250 m
Indore: Fire Capital Fund Mauritius Pvt Ltd, a global venture capital fund, plans to invest up to $250 million to develop integrated townships in 10 cities. By the year-end, the firm would also raise a $500 million fund to be dedicated to real estate and components of infrastructure, a senior company official said.
— PTI
Bharat Hotels in Dubai
New Delhi: Bharat Hotels, which owns The Grand group of hotels, has announced its joint venture with UAE-based real estate developer Nakheel to build first international hotel in Dubai at an investment of Rs 475 crore. Nakheel will lead the construction and development of the project, The Grand Fort Dubai, while Bharat Hotels would create the design and concept and would also manage the hotel operations, a joint press note said.
— PTI
Pearls project for Zirakpur
Chandigarh: Pearls Infrastructure Projects Ltd, one of the real estate companies in North India, is all set to come up with forthcoming project Nirmal Chaaya Towers in Zirakpur, Punjab. Situated over 17.5 acres of lush green area, this residential apartment is likely to pose a swanky structure outlook, located quite strategically in terms of convenience and comfort of the inhabitants. — TNS
Banyan Tree venture in Kerala
Kochi: The Singapore-based Internationally acclaimed hospitality group — Banyan Tree Hotels and Resorts — is foraying into Kerala to start a Rs 150 crore joint venture luxury resort in a backwaters island of Chertalla in Kerala’s Alapuzha district. The resort will have 60 traditionally built villas with contemporary interpretations and each villa having its own private swimming pool, Banyan Tree Chairman Ho Kwonping told reporters here.
— PTI
Wachovia acquires stake in Vipul
New Delhi: Wachovia Corporation, one of the largest financial institutions in the United States, has subscribed to 14.95 per cent equity capital of Indian real estate company Vipul Ltd for Rs 233.92 crore under preferential allotment. Wachovia’s director Sandip Kundu and managing director of Vipul Ltd Punit Beriwala announced this here jointly. “We are very positive about Indian real estate growth and thus we have decided to take 14.95 per cent stake in Vipul Ltd. We have plans to invest about $2 billion in 2007 in Asian countries, of which about 50 per cent will be in the Indian real estate,” Kundu said.
— TNS
|
|||||||
|
With the Andhra Pradesh government issuing an order of allotting 100 acres of land to SemIndia Inc, decks have been cleared for the proposed $3 billion semiconductor manufacturing Fab City here.
