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Abode abroad
A growing number of Indians are investing in homes overseas, says Peeyush Agnihotri
India
and investment are getting synonymous. While on one hand, private equity and foreign funds are being placed in Indian realty, cash-rich Indians, on the other, are panning abroad to have global addresses. Attribute it to whatever — hiked purchasing power of the rupee, DINK (double income no kids) families or MNCs pouring in money — rich Indians are getting richer, thereby implying that abodes abroad are no longer a pipedream. Ballooned realty prices in India, transparency in foreign deals sprinkled by the affordability factor are merely acting as catalysts in taking this swelling tribe of rupee-rich Indians places. Literally! From small-time countries like Cyprus, Mauritius and Maldives to big economies like the UK, Canada, Australia and the US, realty pie is being nibbled by those who can afford. A few of the investors are even contemplating a final settlement abroad via the investment route, though no country gives a commitment. “There has been a sudden rise in such queries. Most of them centre around the UK, Mauritius, Malaysia, Auckland, Singapore and Canada. Recently, a group of investors even went to Cyprus to look for investment opportunities,” claims an upmarket property dealer from Chandigarh. Kunal Banerji, President, Marketing & Corporate Communications, Ansal API, is of the view that easing of Foreign Exchange Management Act (FEMA) rules has a definitive role to play. “Relaxation of the FEMA guidelines and permitting investment abroad has led to investment in the available options across the globe,” he says Most of the foreign countries view it as an inroad to investment and do not mind lending few sops, almost equivalent to residency. Malaysia, for instance, permits a person to stay on a social visit pass, under its ‘second home programme’ if one invests certain sum of money. Mauritius gives a multiple entry visa and Dubai offers property on a very long-term lease sans ownership rights. Avneesh K. Singh, MD, SNG Developers, says a growing number of individuals and small investors are investing in real estate abroad due to liberalisation of remittance norms by RBI. “This, coupled with the facts that more Indian are travelling abroad more frequently and peaking of real estate prices in India, is the harbinger of a trend. “Growing disposable incomes, easy financing, attractive prices, investor friendly policies and the ultimate dream of owing a home in a foreign location are all contributing to it,” he says. The popular destination for investors are Dubai; Kuala Lumpur, Petailing, Jaya Subang Jaya Puchong, Shah Alam and Klang in Malaysia; Knightbridge, Mayfair and Wimbledon in London; Marina Bay, Orchard Road, Newton and Cairnhill in Singapore. The locations are traditionally courted by Indians and have a substantial presence of people of Indian origin,” he details. Though a limited move but a start of a trend, nevertheless, is how Amit Jha, COO, M-Tech Developers, puts it. This also depends on the returns from these opportunities. But its still a limited movement limited to a particular strata of the society. “It is limited to high networth individuals or Indian firms having global presence that look at these opportunities. In terms of volume the growth may not be significant but it may gain momentum in the future,” he says. As far as the country preference goes, Jha opines that vacation homes still on the forefront rather than a full time home. “I feel it is the countries where development or economic opportunities are the maximum or else a certain percentage will be of vacation homes with a long-term return as the objective.” For desi globe-trotters it is becoming an amalgamation of investment and need rather than luxury. With swollen bank accounts where there is enough to spare, an international address is certainly welcome.
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From Ludhiana to London
Jupinderjit Singh comes across a clutch of investors who are buying plots in New Addington sitting in Punjab
If
you think only erstwhile kings or politicians could buy property in foreign countries, read this. Commoners, mainly farmers, from Jagraon- Raikot belt of Ludhiana district are making a beeline to buy plots in England. At a time when the British Government is tightening noose around immigrants, especially Indians, many have already purchased plots, worth Rs 11 lakh, offered by a UK-based land investment company. Most of the investors have never even been to England.As many as 20 investors from Raikot and adjoining villages have booked a plot each in New Addington, London, claiming they made the international realty investment after verifying from relatives and friends settled in England. Jasbir Singh of Halwara, one of the 20 investors, says he prefers to invest overseas than the badly fluctuating local real estate market. A farmer by profession, he says, he stands shaken by the huge losses suffered by investors in the now-cancelled Halwara international airport project. Moreover, he adds that the investment is giving him a ‘unique elation’: “Just six decades after the post-colonial rule, ordinary Indians like me are getting a chance to own land in the former ruler’s country and that too, sitting at home.” Jagdish Jain, a local representative of the company, says he roped in investors after verifying the details and credentials from friends settled in England. “Me and my son have booked a plot each for ourselves before telling others.” Gurjant Singh of Faridkot has received UK government’s registration papers. The investment is gaining popularity in the rural belt with people hoping to get a visa and possible emigration even though the company is not guaranteeing it. The company, Jain says, is offering 298 sq yard plots at a price of Rs 11 lakh, which roughly amounts to £13,750.” Jain says he has deposited Rs 20 lakh as security with the UK-based firm. Tejas Datta, head marketing and communication of the company sought to answer the concerns of The Tribune through an e- mail. He claims the UK Land Investments (UKLI) holds authentic title deeds of thousands of acres of land in
its name. Another factor that keen investors should ensure is that the land retailer is offering a valid freehold title deed in the name of the investor himself. He cautions that buying strategic land in the UK does not guarantee residency. The UKLI recommends caution in dealing with land bankers who make such promises. He says the company provides all environmental clearances, ecological test reports, along with a local authority search report. It is for these reasons that UKLI has enjoyed such favourable responses in India, especially Punjab, he claims. Marion Shelley, Press and PR Manager Land Registry Head Office, London, also has in an e-mail to The Tribune’s query said that registration of title to land does not confer any additional rights of residence where none or only limited ones exist. The e-mails stand as a caution to those who think they can
get a chance to stay in England by investing there.
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Second home loans may get costlier
Second
home loans may cost more as some large public sector banks are contemplating a higher interest rate but home loans below Rs 20 lakh are likely to get cheaper, providing relief to the lower and middle-classes.
Taking a cue from Union Bank of India, which has reduced its interest rate on home loans below Rs 20 lakh, a few large public sector banks are understood to be considering following suit. Smaller banks, however, appear unlikely to do so. Similarly, a higher rate of interest for second home loans also appears on the cards, but here again it is the bigger public sector banks, which are believed to be considering such a move. “There’s been some thinking on these lines,” a top State Bank of India (SBI) official said. “However, no decision has been taken as yet. We will decide soon.” Presently, SBI charges the same rate for both first and second time home loans. ICICI, a big-time home loans lender, has already indicated that it may consider a higher rate for second-time loans to discourage speculation in the real estate sector. ICICI Bank is presently giving loans up to 85 per cent of the home value when it is a first buy. "However, in the case of second homes, the margin money has to be necessarily higher," the bank's spokesperson said. For second home buys, ICICI Bank gives loans upto 70-75 per cent of the home value, he said. IDBI Bank also lends up to 85 per cent of the home value in the case of a first buy while for a second buy, much depends on the feedback from its appraisals. A Bank of Baroda official said that reducing rates on loans below Rs 20 lakh would depend upon factors like cost of funds for the bank. “We are studying the matter,” he said. The official said that charging a higher interest rate for second home loans was also “under discussion” but a decision either way will be taken only by June. The Bank of India, another big public sector lender, said that it had not increased home loan rates when other banks did so in the past and “hence, there may not be a need to reduce them. Our rates are very competitive,” its Executive Director K R Kamath said. On second home loans, Kamath said that “as of now, we are not contemplating any increase in rates, but going forward, we may look at it.” Smaller public sector banks such as Central Bank, Dena Bank and the south-based Indian Bank, which cater to small ticket loans, said that they may have no need to raise rates on second home loans since they do not receive many such applications. On reducing rates for loans below Rs 20 lakh, many of them said that with their rates already very competitive, a reduction could be contemplated only after taking a considered view of all factors. Dena Bank’s Executive Director U S Kohli, said that since the bank had not revised upwards its rates the last time, “there is no question of reducing rates below Rs 20 lakh.” Second home loans, too, were not of much concern to smaller banks since the majority of their loans ae in the range of Rs 5-10-lakh. “Ninety per cent of our loans are in the Rs 8-10-lakh range,” Bank of Maharashtra’s Chairman and Managing Director M.D. Mallya said. Mallya, however, said that going forward the bank might consider reducing its rates below Rs 20 lakh. “We may review the issue at our next asset-liability committee (ALCO) meet,” he said. The Central Bank of India said its rates were lower as compared to its peers. “Our rates are still lower than our competitors,” its Executive Director
K. Subbaraman said. Most of the bank’s customers were first-time loanees and second-time purchasers were “very few with the average size of our loans in the range of Rs 5-10-lakh.” The bank has no differential pricing as of now. Indian Bank’s Chairman K.C. Chakrabarty, who described his bank as a “common man’s bank” said nearly 99 per cent of his customers were first-time home buyers. “You tell me how many of my customers have the muscle to buy a second home?” he asked.
— PTI
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GREEN HOUSE Satish Narula talks about the plant that is knows for its grandeur
From
indoors of a multi-storied flat to sprawling lawns of a national monument, there is one class of plants that fits in all locales. Yes, we are talking about palms. When it comes to elegance, majestic display, grandeur and grace, nothing can beat them. Palms rule the roost from shade to heat. They suit all locations. As they do well as potted specimen, they are much-prized for indoor display. Even a single six to eight feet high palm in a pot can lend that ‘garden’ look. In larger gardens, they can be used as a display specimen in the avenues or near the water bodies. Palms in general are, however, demanding as far as watering goes. Any setback can be unrecoverable. The elegance with which they stand and the bowing posture of fronds of Areca Nut palm makes it suitable for row planting along a driveway. As the orientation of the plant is upright, the leaves do not interfere with the drive. Areca palm, as it is commonly called, gives tillers from near the base. These can be separated from the main plant by giving a vertical straight cut to the roots to make independent units. Another member of the palm group, Fish Tail palm, is also very popular with the gardeners. The plant is named so because of the shape of leaves that resembles fish fins and tail. It is ornamental and easily qualifies for indoor display. It can stand shade for many days. After a few years of the confinement in the pot, it can be transplanted in the open as a specimen tree. At maturity, flowering strands, nearly five to six feet long, hang out from the main trunk near the top. It is a delight to watch when tiny yellow flowers open and shed on the ground in succession. The Royal palm or the Bottle palm is the species of palms that no other plant can beat in grace and grandeur. This forms almost an essential feature at places of public importance, especially historical monuments and heritage buildings. They are used along the pathways at places of historical importance. As they stand erect, they can be used well in straight lines. Care should be taken at the time of planting so that they appear exactly in a straight line. Palms do not branch above ground except for one species called Branching palm. There are many more species that can be used as potted plants for indoor display like Chamaedorea palm, Kentia palm, Chinese Fan palm, Washingtonia, Livistona palm There are certain other plants that have palm suffixed to their names but have nothing to do with this class. They are not even remotely related to palms. These are Zamias or Cardboard palm, Traveler’s palm, Sago palm and Pony Tail palm. The writer is a senior horticulturist from PAU. His email id is
satishnarula@yahoo.co.in
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No rebate on earnest money deposited with application for plot
By S.C. Vasudeva Q. I have made an application to Punjab Urban Development Authority (PUDA) for the allotment of residential plot. The earnest money of 20 per cent was also paid for the purposes of the allotment. The said amount had been financed by a bank on which I have to pay the interest. Is the above amount of interest deductible under the provisions of the IT Act? — Ram Chander, Bathinda A. The amount of interest paid for financing the earnest money sent along with the application made to PUDA for allotment of a plot is not allowed as deduction under any of the provisions of the Act. Section 24 of the Act provides for deduction of interest in respect of money borrowed for the purposes of purchase, construction, repair, renewal, or reconstruction of a house property. Therefore, the interest paid by you for getting the finance for earnest money paid to PUDA for booking residential plot would not be allowable as a deduction under any head of income. PIO investment
Q. I am a US citizen and a PIO (person of Indian origin) card entitles me to buy property in India. I migrated to India last year and am currently in the process of transferring my savings from the US. I plan to buy a house to live in north India. Please advise if there are any tax implications for transferring the money and purchase property in India. — Ajay A.
The remittances from abroad are not taxable in case they are in the nature of your past savings. There are no tax implications in case the amount received by you from abroad is duly supported by remittance certificates and you are able to prove that these amounts are out of past savings. On the basis of facts given by you in the query, you should be a resident but not ordinary resident in case you satisfy either of the following two conditions: (a) an individual who has been a non-resident in India in nine out of the 10 previous years preceding that year, or (b) has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, 729 days or less. So long as you are a resident but not ordinary resident, income earned in India would be taxable and any income earned outside India if the same is not from a business controlled from India or a profession set up in India, would not be taxable.
NAC in Nayagaon
Q. We 203 members purchased 28 acres of land, 2 km away from Chandigarh in Nayagaon village located in Punjab in 1995 & made a co-op house building society with members having different sizes of plots in it & registered it with PUDA. After Nayagaon became NAC in 2006 within municipality limits under the GMADA, one of the house building company will develop the entire land & construct apartments on the following terms on the entire land & each 500 sq yard plot holder will get in exchange of his plot: 1. One apartment of 2,250 sq feet free of cost to be handed over to each plot holder after three years on completion of project is plus Rs 80 lakh through cheque during this financial year. The remaining apartments on this land will be the property of company. My queries are: 1. What will be my tax liability? I, as 500 sq yd plot holder, do not have any house at present. 2. How to save IT on Rs 80 lakh & which are the bonds schemes now available to save LTCG? My salary in this FY is Rs 3.5 lakh & I am going to deposit Rs 1 lakh in PPF to save under Section 80C. If Rs 50 lakh deposited within six months in specified bonds out of Rs 80 lakh, what should I do to remaining 30 lakh to save tax or where to invest to get max benefit. 3. Do I have to register my flat with PUDA/state revenue department after the possession? At what rate is the stamp duty to be paid under these conditions? Can the cost of stamp duty be set aside/adjusted against any tax? 4. Each 500 sq yds holder paid Rs 3 lakh in 1995 to society as cost of plot. — K.S. Gill, Dharamshala A.
The replies to your queries are: (i) The fair market value of the flat of 2,250 sq feet as on the date of giving the possession to you will have to be estimated and Rs 80 lakh received in cash will be added to the said estimated value. The aggregate of these two amounts will be the consideration for the transfer of land of 500 sq yards. Since the land has been held for more than three years, the capital gain on the transfer of such land will be treated as a long-term capital gain. From the total amount of the consideration for the transfer of land so determined, the indexed cost of the land will be deducted so as to arrive at a long-term capital gain. You would not be entitled to avail the exemption under Section 54F of the Act as in my opinion, it will be a case of acquisition of the residential flat and such acquisition being beyond the period of two years from the date of transfer of land, the entire consideration would become exigible to capital gains tax. (ii) It will be better to invest the amount of excess consideration in the bonds issued by the approved institutions so as to save the capital gains tax. In case the long-term capital gain is more than Rs 50 lakh, the balance amount can either be invested in the purchase or construction of a residential house within the specified period. (iii) There are no other schemes whereby the capital gains tax can be saved except by making investment in the bonds issued under capital gains scheme or constructing or buying a residential house within the specified period. It may be added that the exemption from levy of capital gain can be claimed under the Section 54F of the Act only if you do not own any other residential house other than the flat now acquired. (iv) The flat will have to be registered in accordance with the rules of state government with regard to the registration of such flats. The stamp duty would become part of the cost of the flat and deductible against the sale consideration as and when the flat is sold.
Land acquired
Q. My agricultural land had been acquired by the state government in 2006. I have received compensation against such acquisition, which, I think is not adequate. All of us, whose land had been acquired, are taking steps to file an appeal against the order of the land acquisition authority. What would be the position of the compensation, which I have already received, and additional compensation if any, we should receive after the decision of the Hon’ble High Court? — R.R. Gupta, Panipat A.
In accordance with the provisions of Section 10(37) of the Act, in case of an assessee being an individual or an HUF, any income chargeable under the head “capital gains” arising from the transfer of agricultural land where (a) such land is situated in any area referred to item (a) or item (b) of sub clause (iii) of clause (14) of Section 2 of the Act (i.e. the land is situated within the specified limits) (b) such land, during the two years immediately preceding the date of transfer, was being used for agricultural purposes by such HUF or individual or parent of his (c) such transfer is by way of compulsory acquisition under any law or a transfer, the consideration for which is determined or approved by the Central Government or the Reserve Bank of India and (d) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after April 1, 2004, shall be exempt from tax. You should, therefore, examine the aforesaid position so as to claim exemption from tax.
Know municipal limits
Q. My mother sold agriculture land, beyond the municipal boundary two years ago and the deal was registered. Actually it was a part of HUF and she made her testament for that. She expired later. In my opinion agricultural income is not taxable? Please guide me, as the tax department now wants to know about this. — J.S. Paul A.
You have not indicated the exact situation of the agricultural land sold by your mother. It is, therefore, not possible to verify whether the particular land is covered within the definition of the term capital asset or not. In accordance with the provisions of the Income-tax Act, 1961 (the Act), even if the agricultural land is situated outside the municipal limits, it should also be outside the specified distance from such municipal limit. I invite your kind attention to notification no. 9447 (F. No. 164/3/87-ITA-1) dated January 6, 1994, which can be verified and you can ascertain whether the said land would be considered as a capital asset or not. The income tax department would definitely like to have evidence so as come to a conclusion that the agricultural land is not a capital asset within the meaning of Section 2 (1A) of the Act. The onus being on you to prove this aspect, you will have to produce such evidence before the authorities in case your contention of the land being outside the municipal limit is to be accepted.
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Peer Mushalla on realtors’ radar
Big-time builders and end-users are investing in this once-sleepy small village adjoining Panchkula, says
Pradeep Sharma
Situated
stone’s throw away from Sector 20, Panchkula, Peer Mushalla in Zirakpur is fast emerging the new abode for builders, investors and end-users. In fact, strategic geographical location, coupled with lower prices than the adjoining areas, are attracting builders to launch new projects, which till a couple of years was seen as a “no-man’s land”. Its inclusion in the Zirakpur nagar panchayat in 2005 saw rapid urbanisation since the inclusion coincided with the realty boom. “Peer Mushalla has certain inherent advantages as compared to other areas of Zirakpur and Panchkula,” claims Ajay Vir Sehgal, CEO, Opera CCPL Group, which has launched state-of-the-art Opera Garden on 19 acres in Peer Mushalla. “The price factor is the most important factor for the buyers. Besides, connectivity is another plus with the area being approachable from three sides, including Sector 20 of Panchkula and Kalka-Ambala highway, giving it an edge over several other areas of Zirakpur, including the VIP road,” Sehgal asserts. Quality of construction and price factor tilt the balance in Peer Mushalla’s favour, reasons AK Virmani, a property consultant of Panchkula. A three bedroom apartment in Peer Mushalla is quoted at around Rs 35 lakh as compared to Rs 50 lakh in Sector 20 and there is a sea of difference between the quality of construction of a cooperative society and a private builder, he adds. With a 100 feet road connecting Sector 20 to Peer Mushalla in the final stage, the area connectivity is set to get a boost, hope builders and commuters. And if the facilities being provided in the proposed master plan of Zirakpur are put in place, the area could still attract more buyers. Large tracts of land are not available in Zirakpur, one of the fastest growing townships in Punjab. However, this is not the case in Peer Mushalla, which explains the reason why realtors are making a beeline for the area. Opera Garden, Bollywood Heights, Tricity and Trishala are some of the major projects, which have come up in the area recently. Parsvnath Developers kicked off a residential project adjoining Peer Mushalla in Panchkula’s Sector 20 recently. Realtors views seem to have been supported by investors. “Price and connectivity are major factors but the development of the infrastructure has also been taken into account while buying property,” Malkit Singh, an NRI looking for a “safe investment” on Chand- igarh’s periphery, says.
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Parking slots with Rs 30 lakh tag
Car stand space goes for a premium in Mumbai, says Shiv Kumar
With
Mumbaiites purchasing a record number of cars, parking spaces in the city are going for a premium. Residents of buildings in Tony Malabar Hill, Napean Sea Road and Worli Seaface are shelling out as much as Rs 30 lakh for stilt parking slot. According to real estate agents owners of expensive cars like Mercedes, BMW and Land Rover are shelling out premium rates so that the vehicles do not have to be parked on the roads outside. “With more and more cars coming in the market, people look at secure parking slots as an investment that will see good appreciation in the future,” Vasant Ganglani, a real estate agent, operating from Napean Sea Road, says. Most of the families who live in these areas are diamond merchants and stockbrokers who have multiple cars in the household. Typically, society members with cheaper cars readily transfer their stilt parking lots for fancy sums usually paid in cash. Since stilt parking is ‘allotted’ to members of a housing society and not sold, there is no need to register change of ownership of these spaces with the registrar of stamp duties. The housing society is also paid a ‘donation’ by the buyer and seller for making the allotment. Even uncovered parking lots within building compounds now cost a fortune. In the distant suburbs, some buildings charge as much as Rs 1 lakh for open parking space. According to real estate agents, rates for parking lots have more than doubled in the past year across Mumbai in the wake of a booming economy, which saw more cars being bought. With several hundred cars being registered in the city every day, the vehicular density in Mumbai is 591 vehicles per square kilometre, compared to 163 in New Delhi. As more and more car owners park their vehicles on the streets, the Brihanmumbai Municipal Corporation is turning several streets into no-parking zones. At several buildings with large open spaces, residents have voted to remove gardens and swimming pools so that more cars could be accommodated. Some societies have even purchased pneumatic multi-storeyed parking systems from international suppliers to solve the problem.
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HOME DECOR Devendra Malik explains how these gateways can make a house look regal
Looking
down the ages, door has taken many forms and has developed incredibly. From stone doors to modern glass ones, size, specification and attachments have changed drastically. Doors are no more just security barriers. They have gone multifunctional and lend aesthetics to the interiors. Say, for example, a taller door makes a room appear greater in height and gives the feeling of openness. Size does matter and plays an important role with human psychology. During ancient times, doors in the Indian architecture were made lower than the human height, metamorphically emphasising the idea of humility, as a person would have to enter with his head lowered. Doors were specifically placed such in places of worship and the palaces of the kings.
Types
There are various types of doors that are universally used in buildings. Their sizes are determined according to usage and functionality. Hinged or bifold doors are generally used in residential interiors. In commercial settings, sliding, revolving and automatic doors are used where as louvers and swing doors are used in restaurants and hospital industry.
Internal doors
Internal doors are used to control the physical atmosphere within a space by enclosing it. This implies that interiors can be heated or cooled more effectively. Major function of internal door is to lend aesthetics and style to the interiors. They are also used as physical barrier to define spaces like drawing room, bedroom, dining room. They may be amalgamated with the interiors or may be allowed to stand out to become point of attractions. Generally, internal doors are either transparent or translucent. Glass gives them the property of transparency whereas etching, films and stained effects gives translucency. Sometimes, plastic doors are also used in toilets, bath and washrooms. These are basically UPVC doors, also available in wooden finishes.
External doors
External doors are used for security as well as for light and ventilation purposes. They may be the main entrance doors opening in the balconies or open areas. These doors may have panels or flush depending upon the exterior elevation of the buildings. Steel doors with wooden and metallic finishes are also used as external doors. Wire-meshed doors are also installed with external ones to ward off insects. These are used as screens and may be of wood or steel also. Gate, garage and garden doors are also treated as external doors. As these doors are exposed to sunlight and rains, they should be preferably be made of steel. Fiberglass or wood can be used as a screen to lend privacy to the indoor areas such as driveways and lawns. Gate and garage doors can be motorised or remote-controlled. Doors reflect the nature of the owner…. That is why most persons today spent a lot of time and money on them. But the real challenge lies in detailing out even the smallest particulars such as door knobs, hinges, floor springs, tower bolts, door stops, tower bolt, aldrops, locks ...and so on. The writer is a New-Delhi based interior designer. His email id is
devendramalik@yahoo.co.in
Vaastu-wise
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Buzz on Bourses
Elbit to form joint venture Emami to foray into realty Parsvnath Paliwal City Vatika Centre in Pune Mandira to bat for VGN Ansals tie up with Noor Cap CNBC-Crisil awards SunCon venture bags contract Garnet-Sternon eyes Europe
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A door should either be in the north or east
