 |
|
| REAL ESTATE |
|
|
|
|
|
Kashmiri Pandits
The Rs 294-cr Jagti township is among several projects in Jammu and Kashmir that are holding out the promise of a comfortable living to displaced families of Kashmiri Pandits, writes
Ehsan Fazili
As many as three lakh Kashmiri Pandits have migrated from the valley over the past two decades because of militancy and the Centre as well as state government have been trying to bring them back to their homes. This has led to the launch of many housing projects in the state for these displaced people. Due to scare of militants the Pandits from all over Kashmir, mostly from urban centres like Srinagar, left their homes and have been living in different parts of the country, but many of them are living in tents in camps in Udhampur and Jammu within the state. The pitiable condition of these migrants in different camps in the Jammu region has forced the government to take steps to provide decent accommodation to them. Thus, a major township to provide housing facility to about 25,000 persons is under-construction at Jagti near Nagrota, Jammu. The government also allotted 276 newly constructed flats at Muthi in Jammu to the Kashmiri Pandit migrant families earlier this month. Three clusters of residential flats are also under construction at three different places in Kashmir- Sheikhpora (Budgam), Tulamulla (Ganderbal) and Mattan (Anantnag). As many as 31 families of Pandits have been provided accommodation in the first instance at Sheikhpora in Budgam district, where over 200 residential flats are nearing completion. Two other clusters of residential flats are also under construction at the pilgrim spot of Tulamulla in Ganderbal district near Srinagar and at Mattan in Anantnag district of south Kashmir. Chief Minister Ghulam Nabi Azad visited Jagti in the Nagrota area near Jammu earlier this month to inspect the pace of work on the state’s biggest project in housing sector that is fast coming up as a township for the members of the community who migrated from Kashmir in the wake of militancy and were lodged in migrant camps. The foundation stone of the Rs 294-crore township was laid by the Prime Minister, Dr Manmohan Singh, in July last while the actual construction work started in October 2007. In all, 178 three-storey blocks comprising 4,228 two-room tenements are being constructed. The mega project will be completed by September 2009. The upcoming township, spread over an area of 716 kanals and stretching over 2.25 km, is surrounded by small hills and a river flowing nearby gives the place an ambience of Kashmir. The site was chosen by the Chief Minister himself to give the township dwellers a feel of the Valley. He has been personally supervising the project and taking keen interest in its early completion. He has already passed on instructions for plantation in the area and proper landscaping. A major sewerage plant is the main component of the project, while a 2.5 km-long road and a bridge connecting the township with Nagrota would also be constructed. “As many as 20,000 persons will be housed in the township, making it as populated as many of our district headquarters,” Azad said during his visit to Jagti. He said while the township was Prime Minister’s package, the state government would construct roads, hospitals, dispensaries and schools for the inmates. The Chief Minister said Jagti township would emerge as a unique example of integration of two provinces of the state as the beneficiaries are Kashmiris while the project is located in Jammu. He said “all of us want that Kashmiri migrants should return with honour to their homes and hearths in the Valley but till such time they are convinced and feel safe to return, Jagti township and other residential accommodations being built here are aimed at providing better amenities to them.” The project of constructing flats at Sheikhpora in Budgam district, located at a distance of about 20 km from Srinagar, was started in 2003 with a view to provide
alternate accommodation to Pandits prior to their settling at their respective places on their return to Kashmir. The Rs 23-crore project being constructed by the Jammu and Kashmir Projects Construction Corporation (JKPCC), has already handed over 60 flats, comprising five blocks, to the Relief and Rehabilitation Department of the state government. In all work on 15 blocks has been completed and five others are nearing completion and would be handed over to the government this year. Each flat, with an area of 980 sq ft. comprising two-bedroom set, provides complete residential facilities to the residents. The migrant colony, spread over 87 kanals, is connected with a network of roads surrounded by a fencing wall of bricks and has an inside facility of 12 shops. There is also the facility of overhead water storage with a capacity of 50,000 gallons of water pumped out from the tubewell inside. When the 31 families living in temporary rented accommodation provided by the government in Budgam town, shifted to these flats a couple of days before Mahashivratri in early March, they were also provided with the facility of a temple. Another set of residential accommodation is coming up at Tulamulla, Ganderbal district, about 30 km northwest of Srinagar, near the famous Khir Bhawani temple where thousands of Kashmiri Pandits offer prayers on the occasion of ‘Jesht Ashtami’ every year. The Rs 16.5 crore project near completion by the JKPCC has already been providing accommodation to the migrant Pandits during the annual ‘Jesht Ashtami’ festival for the past three consecutive years. It has 60 one-room tenements and dormitories for the Pandits who visit the shrine from outside Kashmir every year on the occasion of the festival. The project also includes a yajna shala, yatrika and bathing ghats and cloak rooms for the pilgrims. Another cluster of buildings, particularly for the pilgrims to the famous temples of Mattan and Amarnath shrine has come up at Mattan near Anantnag in south Kashmir. Three blocks comprising 18 two-bedroom flats constructed at the cost of Rs 1.56 crore by the Jammu and Kashmir Housing Board, have already been completed and will soon be handed over to the state tourism department to accommodate pilgrims coming to south Kashmir.
|
||
|
Holy hot spots
Religious tourism is pushing the realty industry’s growth in destinations like Vrindavan, Mathura, Hardwar, Ajmer, Amritsar, Tirupati and Nasik, cities on the fast track and emerging hot spots for real estate developers
Spirituality may seek to wean people away from material desires but it has emerged as a major factor driving India’s $15 billion realty industry that is growing at 35 per cent per annum, say industry experts. Religious tourism is pushing the realty industry’s growth in destinations like Vrindavan, Mathura, Hardwar, Ajmer, Amritsar, Tirupati and Nasik, cities on the fast track and emerging hot spots for real estate developers. “Religious towns have good growth prospects. They are witnessing more than 45 per cent annual rise in property prices against the average 25-35 per cent in Tier II cities,” says Vipin Agarwal, executive director, Omaxe Developers. “Increasing demand will push growth further. More number of people are investing in property in these towns that attract a large number of pilgrims from India and abroad promising inner tranquillity and spiritual bliss,” Agarwal said. For example, the twin cities of Vrindavan and Mathura, some 140 km from Delhi, have seen the development of over a dozen townships in less than three years with an estimated investment of Rs 150 billion ($3.71 billion). “The property rates here have jumped by a whopping 400 per cent in the past two-three years alone. Certainly, it makes sense to invest here,” maintains Puneet Agarwal, director of Pushpanjali Constructions. Most of these religious tourism-motivated townships also blend spiritual living with features like golf courses, billiard rooms, tennis courts, spas, clubs and swimming pools, with large expanses of greenery thrown in. “Being associated with Krishna, Vrindavan attracts many non-resident Indians and foreigners, apart from the usual visitors,” says Sumit Walia, general manager of Sree Developers, a Mathura-based real estate developer. “There is a huge demand for good housing from foreigners. Many individuals with high net worth are also investing in these places as post-retirement options and their second weekend homes,” he says. “There is a good pool of investors in Mathura from Delhi and Gurgaon, who drive here over weekends to get a taste of spirituality, adds Madhur Mittal, managing director of Triveni Infrastructure. “Certainly demand for quality housing is spiralling.” It is not the local developers alone who are reaping profits. Even Big players like API, Omaxe, Unitech and Sahara group are coming up with their projects in these cities. Omaxe, for instance, has lined up a 440-acre integrated township with more than 2,000 residential units on the Jaipur-Ajmer Expressway to tap visitors to the famous Sufi shrine of Khwaja Moinuddin Chisti. Similarly, Ansal-API has forayed into this market with two townships with their Sushant City brand, one in Ajmer spread over 125 acres of land and the other at Kurukshetra over 200 acres. “Ajmer is a major spiritual and religious centre given the presence of the Pushkar temple dedicated to Lord Brahma and the dargah of Ajmer Sharif. It makes sense to invest here,” says Kunal Bannerjee, vice-president of Ansal-API. That is the reason property prices in cities and towns like Amritsar and Ajmer have gone up by five times in the past two years and more such townships are in the offing. Omaxe has plans in Varanasi, Allahabad, Rishikesh, Hardwar, Vrindavan, Tirupati and Puri and Triveni Infrastructure is looking at the temple town of Hardwar, Shirdi, the abode of Sai Baba, and Tirupati, home to Lord Venkateswara. Unitech and Sahara also have similar plans for Varanasi, with the former already announcing a 1,500-acre integrated township there. —
IANS
|
|||
|
Mumbai to have pocket-friendly houses for middle class
Maharashtra’s next housing policy may bring some relief to the middle class, with revenue minister Narayan Rane informing the Legislative Council earlier in the week that affordable houses will be made available in all new constructions in Mumbai. Rane said in the next housing policy, it will be made compulsory for the builders to build 30 per cent small houses of 400 sq ft to 600 sq ft, which can be afforded by the middle class. Buying houses in Mumbai is expensive and a common man can’t buy them, Rane said, adding that the ready reckoner rates in Mumbai, Pune, Thane, Nagpur and Nashik areas have increased by 30 to 40 per cent. The issue of increasing prices of ready reckoner was raised by Shiv Sena MLC Madhukar Sarpotdar through a calling-attention notice. Sarpotdar said the higher ready reckoner rates are increasing property prices and the stamp duty is also higher. He asked the state government to reduce the rates. Rane said it was not the government which increases or decreases the real estate rates. The land prices, last year’s land deals and infrastructure in concerned area, all add upto arriving at the ready reckoner rates, he said. Sometimes, to get maximum loan amount land rates are shown to be higher, he added. Central suburban Kurla, western suburban Andheri and Borivali in Mumbai have higher prices of ready reckoner, Rane said. Upcoming SEZs in Pune, Talegaon and Chakan area have increased the land prices there, he added. Meanwhile, with the Maharashtra government increasing the floor space index (FSI) in Mumbai suburbs to 1.33, the price of Transfer of Development Rights (TDR) is expected to fall by about Rs 300 per sq ft, sources said. Maharashtra’s state Finance Minister Jayant Patil, in the state budget announced recently, said that the FSI will be raised from 1 to 1.33. The overall ceiling continues at FSI of 2. The TDR policy was launched in 1991 by the Maharashtra government to decongest the metropolis. Owners whose plots were reserved for playgrounds, markets and gardens, or whose land was needed for road-widening, could surrender their land to the BMC and get an equivalent amount of space in the suburbs. Builders and real estate developers had earlier said they would consume FSI of 2 by buying TDRs from the markets to the extent of 1 FSI. However, now with the government increasing the FSI by 0.33, they will need to buy lesser TDR (0.66) from the market. The reduction in demand for TDR may bring down the price of TDR in the market. The current rates of TDR are between Rs 3,500 to Rs 4,200 per sq feet. Vimal Shah, Managing Director of Akruti Nirman, said the price of TDR might fall by about Rs 300 per ft. It will help bring down the cost of construction and result in marginal fall in the price of the real estate, he said. — PTI
|
|||
|
Three-fold gain projected for reverse mortgage mart
The market for reverse mortgage services, under which senior citizens can pledge their property for a steady income, will have a potential of $ 113 billion in India by 2015, nearly triple of the about $ 39 billion now, a report says.
The reverse mortgage market potential, calculated by the number of senior citizens, establish that the current market size for the product is three million households and would grow to six million by 2015, said a report by global consultancy firm Celent. “The home equity available is $ 39 billion and is expected to grow to $ 113 billion by 2015, which would be a significant opportunity for lenders,” the report titled ‘Reverse Mortgage Market: Early Days for India’ said. The reverse mortgage market is expected to grow owing to the rapid growth in the senior citizen population, driven by lower fertility rates, improved healthcare and better nutrition. The Indian government is now employing innovative strategies towards change and it has begun introducing financial instruments aimed at the senior population. According to the report, the senior citizen population is estimated to become 117 million by 2015, growing from the current 87 million. —
PTI
|
|||
|
Foreigners can’t buy property in Goa
Against the backdrop of cases of foreign land mafia and drug cartels buying real estate in
Goa, the state government has banned foreigners from purchasing properties. “It’s a policy decision that foreigners will not be allowed to purchase land in
Goa,” law minister Dayanand Narvekar said last week.
Main opposition Bharatiya Janata Party
(BJP) during the assembly sessions and through media campaign had feared large-scale pumping of drugs and mafia money in Goa through these property purchases. The state government, which stumbled upon first such case in 2005, had probed in detail all land deals unearthing 400-odd such deals in violation of Foreign Exchange Management Act
(FEMA).— PTI
|
|||
|
Ansal properties to pay Rs 55 lakh penalty
The Delhi Consumer Commission has directed real estate major Ansal Properties and Industries Ltd to pay a flat applicant Rs 55 lakh, including Rs 30 lakh advance received by it, for denying him possession of his dream home for over a decade.
“Ansal Properties and Industries Ltd has unjustifiably retained the amount of Rs 30 lakh or so for a long 10 years without having refunded the same to the complainant,” commission president Justice J D Kapoor said, holding the construction company guilty for “deficiency in service.” Slapping a fine of Rs 25 lakh on the company, the commission came down heavily on it for denying the flat’s possession to Satish Prasad, a south Delhi resident, on account of non-payment of conversion charges of of Rs 70,950. Justice Kapoor rejected the defence claim that the delay in handing over the possession of the flat, to come up in Palam Vihar in Gurgaon, was caused due to certain “circumstances beyond its control.” Prasad had booked a flat with the company in the Celebrity Homes Complex in Gurgaon in January, 1996 and paid Rs 30.28 lakh as advance. However, the flat could not be delivered within three-and-half-years as promised by the company, forcing Prasad to seek drag the company to the consumer court. —
PTI
|
|||
|
US interest rate cuts fuel Hong Kong property boom
When first-time buyer Judy Kwan heard a flat was for sale in a street she admired in Hong Kong’s Wanchai district, she snapped it up within 24 hours without even seeing it, inheriting a tenant she had never met.
Now she wants to buy another one as the property market surges from a strong economy and mortgages become cheap as local interest rates drop in line with rates cuts in the United States. Kwan hopes property investment will allow her to retire in five years’ time, aged 50. “The price was right and the market’s going up,” said Kwan, an accountant, who paid US$ 282,0000 for the boxing ring-sized flat in November. The apartment’s value has risen 10 per cent since then and analysts predict that falling interest rates and rising salaries will propel prices back to a heady 1997 peak. Hong Kong’s economy is riding on the coat-tails of China’s boom, but its currency peg with the US dollar forces the territory to officially track US interest rate cuts. Local banks have more leeway but have still slashed rates by 100 basis points last month as the US federal funds rate has fallen to 3 per cent. So the housing downturn and mortgage crisis that threatens the US economy has indirectly bolstered Hong Kong property. Monthly transactions for mass market housing in the final three months of last year were on average 63 per cent higher than in the rest of 2007, hitting their highest level in a decade. Real Hong Kong mortgage rates are now negative, below inflation of 3.8 per cent and it has become cheaper to buy than rent, analysts say. A Merrill Lynch property analyst has predicted a 50 per cent rally in property prices in the next two years, prompting several Hong Kong employees at the bank to go on an apartment hunting spree. UBS has the same forecast. Geoff Lewis, head of investment services at JF Asset Management, said the property might “catch fire”. The expected boom fed a price rally late last year in Hong Kong’s biggest developers, including Sun Hung Kai Properties, Cheung Kong Holdings and Henderson Land Development but Hong Kong’s property sub-index has see-sawed this year. Several Hong Kong developers are also expected to get an extra kick from their fast-growing mainland China businesses. But many analysts say buying an apartment is better than buying shares, as equity markets will probably stay volatile. Others suggest that investors suffering share losses might have less cash to invest in real estate. New housing supply in the next three years is forecast at half levels seen during the 1990s boom, and interest rates could fall further while inflation heads above 4 per cent, economists say. With no control over monetary policy and inflation on the rise, a 50 per cent appreciation in flat prices could pose a risk for an economy that saw property prices nosedive 65 per cent when the last property boom burst 10 years ago. Economists, however, are not worried about an asset price bubble just yet. They think a strong property market will create wealth, spur consumer spending, and enable the territory to still notch up 4-5 per cent economic growth even if the US economy tips into recession and hits exports from one of the world’s busiest ports. Hong Kong’s gross domestic product (GDP) has grown an average 7 per cent annually in the past four years. “Mass market property prices are still 35-40 per cent below their peak in 1997,” said Nicholas Kwan, Asian head of research at Standard Chartered Bank. “So even if they rise 30-40 per cent, prices would only be what they were 10 years ago. It’s hard to argue that would be a bubble.” —
Reuters
|
|||
|
Hospitality for the fair sex
Riyadh: For a country that goes to such great lengths to segregate unrelated men and women, it took Saudi Arabia a long time to hit on the idea of women-only hotels.
The kingdom’s first hotel exclusively for females was inaugurated earlier this week. It will offer plush lodgings with a full-range of health and beauty facilities for women to pamper themselves away from the prying eyes of a male-dominated society. “Inside this physical structure, we are all women. We even have bell-women. We are women-owned, women-managed and women-run, from our IT engineer to our electrical engineer,” executive director Lorraine Coutinho told Reuters. “This is meeting a very big demand. There are women’s hotels all over the world, from Berlin to the USA to everywhere,” she said. Saudi Arabia is one of the most conservative countries in the world, where tradition and hardline clerics restrict women’s movement, preventing them from meeting male friends in public, driving cars or employment in many jobs. New rules announced in January allow women to stay in standard mixed-gender hotels without a male family member in tow, but bureaucracy and conservative family values mean few have been able to make use of their new-found freedom. The Luthan Hotel & Spa is owned by a group of 20 Saudi princesses and businesswomen, but it was left to seven princes headed by Sultan bin Salman, a son of Riyadh’s powerful governor, to officially inaugurate it. “This meets the Saudi women’s need for a place to stay as she moves around her country,” he told a large pack of male journalists who stomped around rooms delicately adorned with incense candles, rose-red fabrics and bas-reliefs of cherubs. Prices range from 350 riyals per night to 979 riyals, with weekend “spa break” rates for around 2,000 riyals, though the hotel is located some distance from central Riyadh. “This is a good response to those who always say women aren’t taken care of here. Even in the West there are women’s places where men can’t go,” said Mohammed al-Adhil, deputy head of Riyadh Chambers of Commerce. The few female journalists who came along liked the hotel but not the fact that men dominated the opening ceremony. “It’s a pioneering idea. There was a big need, since you don’t need a ‘mihrim’ (male guardian) with you,” said Iman al-Samra of al-Rai TV. —
Reuters
|
|||
|
GROUND REALTY
Jagvir Goyal lists guidelines that will help those building a house to choose and use PVC materials for an efficient water supply network
The availability of PVC and composite pipes for water supply network in houses has made the choice of material difficult for a house builder. As the GI pipes being used since ages have their own plus and minus points, many house owners who didn’t have a good experience with GI pipes are also looking for a change as a number of house builders now prefer to use PVC pipes and fittings. Choosing PVC pipes: PVC pipes are now being produced not only for water supply purpose but for sanitary installations, drainage or agricultural purposes as well. Each of these pipes has a different composition and different ISI mark. Among these, those for water supply are the most important as water to be consumed by human beings is supposed to be potable and free of all impurities. IS4985 has been assigned for PVC pipes that are to be used for drinking water purpose. Therefore, always choose such PVC pipes that carry IS 4985 on them. These pipes are actually uPVC pipes. Here, u means unplasticised. Always choose a reputed brand of PVC pipes. Prince, Supreme, Finolex and Diplast are some of the reputed brands. The thickness of PVC pipes should be more than 2.8 mm and these should be resistant to inorganic acids, alkalies, salts and compounds like lacquer solvents, ketones, aromatic and chlorinated hydrocarbons which tend to attack PVC pipes. Choosing PP-R Pipes: PVC pipes have not shown good performance when used for carrying hot water. Therefore, if used, these should be used for cold water only. To cover this deficiency, manufacturers have come out with PP-R pipes. PP-R means Polypropylene Random. Though the pipe manufacturers claim that PP-R pipes now produced by them are fully equipped to carry hot water, these should be used only if temperature of hot water is below 55 degree Centigrade. If the temperature of water has to be more, then prefer to use GI pipes from the geyser or solar water heater to the water outlets. If a combination of PVC pipes for cold water and GI pipes for hot water is used, don’t run the two lines too close to each other. Storing PVC pipes: Whenever PVC pipes arrive at site, take care that these are not stacked under direct sun as ultra violet (UV) rays can damage them. Also take care that pipes are not stacked in more than four layers one over another. Prefer to keep smaller diameter pipes inside the bigger diameter pipes to avoid damage and to have more working space. When storing above ground or floor level, provide proper platform for them. Don’t drag these pipes on the floor or ground. Joining PVC pipes: PVC pipes are jointed by using solvent cement, by threading, by using rubber gaskets or by heat welding and compression. Generally, heat welding and compression is suitable in
LDPE, HDPE and PP-R pipes while solvent cement, threading and rubber gaskets are used for other PVC pipes. Prefer When solvent cement is used, the joint becomes unbreakable. Whenever solvent cement is used for the pipe joints, choose only that type and brand of it which is recommended by the manufacturer of the pipe selected by you. Solvent cement is organic polymer that fuses the two parts like welding without heating. Apply solvent cement generously on the pipe length to be inserted in the coupler. Apply it on the inside surface of coupler also. After pushing the pipe into the fitting or coupler, it should be held in position for 3 to 4 minutes. Allow the joint to gain strength for 24 hours at least. In summers, choose morning hours for jointing work so that solvent cement does not dry up by the time pipe is inserted in the coupler. For all vertical PVC pipes, provide enough supports at an interval of 2 foot. Jointing PP-R pipes: Whenever PP-R pipes are chosen for water supply, care should be taken to ensure that these are welded well so that no leakage of joints occurs. For heat welding of PP-R pipes, a small welding machine that can be plugged to 230 Volts supply is available with the plumber. This machine has a thermostat light on it. Welding of pipes and fittings should be started only when this light goes off. The light goes off only when the welding machine reaches a temperature of 2600C, the right temperature for welding. There is a welding depth mark on the pipes. The pipes should be heated up to this mark only. Care should be taken that when the heated pipe is inserted in the heated fitting, the fitting covers full welding depth of the pipe. Connections: Always use GI collars and PVC threaded couplers for connections of taps and such fittings to PVC pipes. Wherever PVC and GI are to be jointed, use thread sealant to make the joint 100 per cent leak proof. For the threaded coupling in PVC and GI, let PVC play the male. PVC specials such as tees and elbows are manufactured either by injection moulding or by fabrication. Choose injection moulded fittings. Water storage tanks: Plastic (polyethylene) water storage tanks have almost wiped out the conventional brick masonry tanks. Prefer them for water storage on the roof. Brick masonry tanks are heavy and suffer from leakage problems. Steel tanks invite rust. Plastic tanks are non-corrosive, easy to clean, light in weight and cause no incrustation. Choose a reputed manufacturer like Sintex, Electroplast, Polycon, Diplast. Ensure that the chosen tanks are moulded in one piece (except lid) and are seamless. ISI mark tanks cost extra by Rs 1 per litre. Storwel and Aquaplus are some ISI marked brands. Look for IS 12701 mark. A non-ISI tank costs about Rs 3.50 per litre capacity. For a three-bedroom house with two toilets and a kitchen, a 1000 litre tank is sufficient. Fixing water storage tanks: While using plastic water storage tanks, hold them well at base. Provide suitable locking arrangement for them. These tanks require more frequent cleaning than masonry tanks. So examine them from time to time and get cleaned at regular intervals. A fixed time interval can’t be defined as it depends on the frequency
of usage and also quality of water. Though these tanks can safely store water having temperature up to 500C,
opt for double walled tanks
if you are living in a hot
climate. Tank level: Always keep the supporting slab for tank above the roof slab by at least one foot. This will save the tank from any damage. Also, any leakage from the tank will be easier to rectify. Tank connections: Always keep the bottom of outlet pipes from water storage tank at least one inch above the base of the tank. This will help in not allowing the foreign particles or settled dust to flow along with water and costly fittings shall be saved from clogging or damage. Provide all inlet and outlet pipes from a water storage tank with stopcocks. Many varieties of stopcocks are available. Prefer ones with lever that allow the supply when lever is in line with the pipe and stop it when it is rotated at right angle to pipes. These type of stopcocks are the easiest to operate. Take care and happy building! The writer is Director, Estates,
PSEB, and can be reached through www.jagvirgoyal.com
|
|||
|
TAX tips
Q. I had taken a capital loan from nationalised bank in March, 2003 for purchasing a flat. And I took possession of the flat in December, 2004. The bank has raised the interest bill for the year 2003-04 towards pre-construction period, which I am claiming at the rate of 1/5th for every year from 2004-05 onwards in addition to the normal interest towards capital borrowed which is less than Rs 1,50,000 i.e. the maximum deduction allowable on account of interest on capital borrowed for house property. In this financial year i.e.2007-2008, banks have increased interest element due to which normal interest is exceeding Rs 1,50,000. My query is: Is deduction on account of interest on capital borrowed for house property, including pre-construction period, is allowable to the extent of actual interest amount involved or is it restricted to Rs 1,50,000.
—
Shantaram, Jalandhar A. It seems the flat acquired by you with borrowed funds is self-occupied. In such a case the interest on borrowed capital of the current year and pre-construction period is deductible subject to a maximum ceiling of Rs 1,50,000. Accordingly, in your case the maximum allowable interest for the current year as well as for the pre-construction period would be restricted to Rs 1,50,000.
Gifting a house
Q. I purchased a plot in June 1988 for Rs 48,000 and constructed a house in 1989 by taking a loan of Rs 1,65,000 from a bank and occupied the house in December 1989 after its completion. However, I had to spend Rs 2,00,000 out of my savings and borrowings from friends and relatives in the subsequent four years to complete the woodwork and paint work. Now I want to gift this house to my son. What is the procedure for making a gift to him and what will be the cost of acquisition for him? My son intends to sell this gifted house at the estimated sale value of Rs 70 lakh and purchase/construct a house at some other location with the sale proceeds. Please advise what will be his tax liability based on the above statement. Kindly also advise whether the entire sale proceeds or only the portion of capital gain is required to be deposited in the designated account under the capital gains deposit scheme pending investment in the acquisition or construction of residential house within the stipulated period. —
H.P. Singh A. The answer to your query is as under i) The gift to your son can be made by executing a gift deed in his favour which will have to be registered with the Registrar and due stamp duty will have to be paid on the execution of such a gift deed. ii) The cost of acquisition for the purpose of computing capital gain would be the amount spent by you on the construction of the house. iii) Your son would be liable to pay capital gains tax on the amount of difference between the sale price and the indexed cost. The indexation would be allowable for the period for which the capital asset i.e. the house is held by your son. However, for the purposes of ascertaining whether it is a short term or long term capital gains, the period of holding by you would also be considered. This means that the property in question will be a long term capital asset but cost inflation index would be applicable from the year, the property is held by your son. iv) The capital gain earned on the sale of the house will have to be deposited in a designated account before the date of filing the return by your son pending investment in the acquisition or construction of a new residential house within the specified period.
Compensation on land acquisition
Q. I own 3 acres of agriculture land in Razapur village in Panipat district. The village is situated 10 km away from any municipal limit and has a population of less than 1,000. The Haryana government has acquired my agriculture land and paid me the compensation amount through one
cheque. According to the Land Acquisition Rules for acquiring land, the government has to issue a notification under Section 4 for the proposal, after sometime the government announces award under Section 9 and makes payment to the land owner. The period of the duration from Section 4 to 9 is counted for calculating interest on compensation amount. The land collector has issued us one cheque for compensation of agriculture land and plus some interest on compensation of agriculture land. The land collector has not deducted any TDS from our payment. Our tax adviser is saying that the capital gain in this case is exempted from any tax but the interest on compensation amount is taxable. So you are requested to guide us whether the interest paid in this particular case (amount paid on acquisition of agriculture land which is situated above 10 km from any municipal limit and village having a population less than 1,000) is taxable or not. If it is taxable then are any exemptions allowed? — Tek Chand Bansal A. Your tax adviser has correctly advised you that capital gain arising from the transfer of agricultural land by way of compulsory acquisition under any law is exempt from tax in case the land is not situated within the specified limits of the municipal corporation etc. I may add that the capital gain arising on such compensation is exempt from tax even if the agricultural land is situated within the aforesaid limits. I may further add that the population which is to be looked into is that of the municipal corporation and not that of the village for the purposes of ascertaining the taxability of the agricultural land. The interest earned on such compensation is taxable. The tax can be saved by depositing an amount up to Rs 1 lakh in the investments specified in Section 80C of the Income-tax Act 1961.
Sale of plot and
capital gain
Q. I have purchased commercial plot auctioned by HUDA on December 3, 2003 for Rs 7,00,000 and payments were made as under:
Date Amount Remarks 03.12.03 70000 10 % of cost 18.02.04 105000 15% of cost 2004-05 120000 Principal
2005-06 170000 –do– 2006-07 156000 –do– 2007-08 212000 –do– Total 8,33,000 Now, I have sold it at a consideration amount of Rs 17 lakh on February 1, 2008. Please let me know the following: i) Capital gain and capital gain tax? ii) Can I invest the sale proceeds i.e. Rs 17 lakh to purchase a residential house to save capital gain? — Vijay K. Singla A. The answers to your queries are as under: i) The facts given in the query do not indicate as to when the possession of the commercial plot auctioned by HUDA was taken by you. It is, therefore, not possible to compute the capital gain as the date of possession would be an important factor to determine the nature of the capital gain i.e. whether a short-term or long-term capital gain. It is, therefore, not possible to compute the amount of capital gain tax payable thereon. ii) The capital gains tax can be saved only if the long-term capital gain is invested in the purchase of a residential house within a period of two years of the date of the transfer of any capital asset. It may be added that the long-term capital gain arises if the capital asset held by a person is transferred after a period of three years of the date of its acquisition.
Capital gains and inherited property
Q. Thanks for the ‘Tax Tips’ on the computation of capital gain. The following further points need elucidation : i) Is capital gains tax leviable even on property inherited ? ii) Can a property on ‘Power of Attorney’ be gifted to a blood relation ? iii) Kindly help in solving the following practical case so as to remove all doubts Purchased in 1990 = Rs 2 lakh Sold in 2008 = Rs 8 lakh Commission paid was 1 per cent to the agent on both the occasions. Stamp duty etc. worth Rs 10,000 in all was spent in 1990. What is the amount of capital gain? iv) Where can the capital gain from property be invested to avoid tax — in property, in equity shares, in bonds of specified organization, or in any one or more of these? —C. L. GUPTA, New Delhi A. The answers to your queries are as under: i) The capital gains tax is leviable on a property which is inherited by a person as and when the same is transferred by the person who has inherited such property. ii) In my opinion there cannot be a gift of property by Power of Attorney. It has to be through an execution of a gift deed. I may add that a General Power of Attorney can be given to a blood relative or anyone else authorising him to deal with the property in any manner he likes. iii) The capital gain arising on the sale of a residential property can be invested either in acquisition/construction of a residential house or in purchase of tax saving bonds or both. The capital gain in the given case would work out at Rs 1,50,176. The calculation is based on the presumption that the property was purchased in the financial year 1990-91 and has been sold in the financial year 2007-08. The writer can be contacted
|
|||
|
Realty bytes
Dubai: Majan Development Co (MDC) has become the latest to enter Oman’s booming real estate market, announcing that it is planning a 400 million Omani riyals ($1 billion) healthcare city. The proposed integrated city is going to come up in the Omani capital Muscat, according to a report in the Khaleej Times. With an authoriSed capital of 40 million Omani riyals ($103 million) and paid up capital of 25 million Omani riyals ($65 million), MDC has been founded by investors in the region with The Kuwait-based Gulf Investment House
(GIH) holding a 50 percent stake. “We plan to take advantage of the investment opportunities in the Omani market by targeting the tourism, commercial and residential sectors,” Nasser Al
Tiwaijiri, senior manager for direct investments at GIH, was quoted as saying. Work on the first phase of the healthcare city, to be carried out on a build, operate and transfer
(BOT) basis, will start next year.
— IANS
Carlson Hotels to manage Radisson Plaza
Hyderabad: Carlson Hotels Worldwide (Asia Pacific) will manage and run Radisson Plaza Hotel, coming up at Banjara Hills in the city. The 160-room hotel, owned by Daaj Hotels and Resorts Private Limited, is scheduled to commence operation in first quarter of 2010. “Radisson Plaza Hotel at Banjara Hills is a spectacular property, well positioned to satisfy the demand of the increasing number of travellers visiting the city,” Carlson Hotels Worldwide (Asia Pacific) president and MD Martin Rinck said. Daaj Hotels and Resorts Director B.S. Sahney said, “the close working relationship with Carlson Hotels will allow us to develop a hotel that offers an unrivalled guest experience for the discerning domestic and international travellers to
Hyderabad.”
— UNI
JMD to foray into West Asia, to invest 200 crore
New Delhi: Country’s leading real estate company JMD Ltd plans to foray into West Asia by opening a wholly-owned arm in Dubai and will invest about Rs 200 crore to undertake four projects consisting two residential and two commercial. “We have grown considerably in the domestic market in the last few years and would now like utilise the experties in exploiting the business opportunities at international level,” company Sunil Bedi said. JMD Ltd, the flagship company of JMD Group, has developed various commercial, residential projects in and around National Capital Region (NRC) in the past decade and further 65,00,000 sq ft is due for completion within a span of next few years, company said in a statement. The company, set up in 1989, has developed commercial complexes like JMD Regent Square, JMD Regent Plaza and JMD
Kohinoor. — UNI
First green residential building to come up in Mumbai by 2010
Mumbai: Real estate developer Shree Ram Urban Infrastructure will build the country’s first green residential building at Worli here. The project, named Palais
Royale, is expected to be completed at a cost of about Rs 800 crore by 2010, the company vice-chairman Vikas S. Kasliwal told reporters here. “We plan to complete the project in the next two years. With a height of over 320
metres, Palais Royale would be India’s tallest green building,” Kasliwal said. The project will be carried out with the guidance of Indian Green Building Council
(IGBC), a part of the country’s leading industry body, Confederation of Indian Industry, Kasliwal said. Nearly 181 green building projects have been registered with IGBC as on February, 2008, while the number is expected to go up to 1,000 in the next two years, IGBC’s head, S. Raghupathy said. Green buildings are different from the conventional structures as they will set benchmarks in water management, waste recycling, energy savings and reduced carbon emission Raghupathy said. —
PTI
|
|||
|
