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Drowning St.
The old method of recarpeting roads is affecting property by lowering the plinth level
of houses and shops and thus their value, writes Kanchan Vasdev
The recarpeting of roads without bothering about the plinth level by following age-old methods is having a detrimental effect on the value of property in Punjab. The plinth level of houses is decreasing day by day as new layers of road are laid over the existing ones every time recarpeting is done. Houses which were 2-3 feet above the road level just a decade ago have now been rendered lower than it. The properties which are on a lower level than the approach road have depreciated and the owners are facing losses for no fault of theirs. As these structures — be it houses or shops — get waterlogged during the rains, they do not attract buyers. And in case there is an interested party, it does not want to pay for the construction. Says Parminder Singh, a real estate dealer, a house with a low plinth level is a nightmare for not only the owner but for the property agents also. “As soon as a prospective buyer sees a house lower than the road, he refuses to even have a look at it. The plinth level is the first thing to hit a buyer’s mind. After all, rainwater enters such houses and who would want to face such an inconvenience?” he asks. He adds that if there are takers, they do not want to pay for the construction. They want to pay only the land price. While a good house fetches Rs 700-800 per sq ft of construction, a house with a low plinth level goes dirt cheap. At the most, a buyer pays anything between Rs 200 to Rs 300 per sq ft. The problem is prevalent all over Punjab. Over the last two decades, the level of the roads has risen. All the houses and shops constructed during this period have been rendered lower than the roads. The newly developed localities are, however, not facing such a problem for the time being as an owner usually constructs a house 2 feet to 3 feet higher than the road. “But if the roads continue to rise like this, these localities too would face the problem within a decade,” says the real estate agent. The residents, whose property has been devalued thus, are in a catch-22 situation. They can neither live comfortably in these houses that get flooded every year nor can they sell them off as nobody wants such a house. “When somebody has to climb down a stair of a house lower than the road, he knows the property has a problem.” Harsimrat Kaur, a resident of Guru Gobind Singh Nagar on Majitha Road, Amritsar, says most of the houses in her locality bore the brunt of a similar situation. Rainwater enters her house every year. The furniture becomes a casualty and they lose money every time it gets spoiled. “We cannot do anything. If we sell it, we will suffer losses. The only solution is that we demolish it first and construct afresh. But then too we would need lakhs,” she says. Many residents of Maharaj Nagar and Gobind Nagar in Ludhiana too have suffered from this problem. The roads have risen over the years and the houses that were constructed in the 1980s and 90s faced this kind of situation. Several residents tried to lay floors afresh so that the level could rise but then the height of the houses was reduced and these became constricting. Residents in old city areas like Janakpuri and its neighbourood and shopkeepers in Chaura Bazar have all faced the lowering of property levels. In Patiala also, many localities that were developed during the last two decades and the residents who constructed houses in this period have had to suffer a similar plight. Many houses in colonies like Guru Nanak Nagar, Gurbax Colony, Rajpura Colony, Tafazalpura, Tripri, Anand Nagar, Dashmesh Nagar and the neighbouring areas are now 2-3 feet lower than the road. “I have raised the level by raising the floors twice over the last 20 years. Still my house is waterlogged during the rains. There are no buyers as the house looks like an improvised shanty in a slum. What should I do?” says a resident of Dashmesh Nagar. While in some metropolitan cities and in developing countries, the old carpet of a road is first removed before laying the new one, the process is not followed in this part of the country. “The developing countries have a specialised plant, worth crores, that recycles the removed bitumen and premixes the carpet of a road before repaving it. This way the plinth level remains the same and the property is not devalued. But the process is not followed here. None of the authorities require the contractors to dig the old road before laying it afresh,” says a contractor of the MC, Ludhiana, requesting anonymity. He says there should be a similar condition in India if the government does not wants the residents to suffer. Otherwise, the day is not far when the people will start moving courts. “After all, why should they suffer losses for no fault of theirs?” he asks.
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Tax tips
Q. I am a widow aged 72. I sold my share of agricultural land within the municipal limits for Rs 20 lakh in January, 2008. The long-term capital gain earned by me in this deal was Rs.10 lakh. The LTCG tax, therefore, comes to Rs 106000 at the rate of 10.6 pc. I have not invested the LTCG to save tax etc. and my gross annual income is about Rs.81,000 without claiming any deduction. Kindly advise whether any tax is payable by me because the LTCG tax clubbed with my gross annual income comes to Rs.1,87,000, which is below the taxable limit for senior citizens. If yes, what is the penalty for not paying tax and filing the income tax return? What form no is to be filled in my case?
— Raja Rani, Gurgaon A.
On the basis of facts given in the query, you have earned a capital gain of Rs.10 lakh on the sale of your share of agricultural land which falls within the municipal limits. Since you are a senior citizen the applicable limit for assessment for 2008-09 up to which income tax is not payable would be Rs. 1,95,000. Accordingly, the net assessable capital gain in your case would work out as under: The above amount would be taxable @ 20 pc plus education cess @ 3 pc on the amount of tax. There is no penalty leviable in case you file the return by March 31, 2009, and pay the corresponding tax by that date. You would however be liable to pay interest under Section 234B and 234C of the Income-tax Act 1961 (the Act) for non-payment of advance tax which will have to be computed on the basis of the date of payment of tax.
Saving strategy
Q. I purchased a 6 marla plot at Balongi village on the Mohali-Ropar road for Rs 18000 in April, 1990. Now I want to sell it for Rs 24 lakh. Please calculate the LTCG on it and the tax thereon. Can I purchase another plot or land from this LTCG to save tax? If a person builds a house on a plot purchased 18 years ago and he has no documentary proof of the expenditure on it, how can he calculate its value for the LTCG? Can he himself put its value or there is any other system approved by law to calculate its value 18 years ago? Please clarify. — Randhir Singh Saini, Hoshiarpur A.
The indexed cost by taking into account the cost inflation index for the financial year 1990-91 and 2007-08 would work out to be Rs 54,495. The applicable index for the financial year 2008-09 is yet to be notified and should be taken for the purpose of computing the indexed cost. However, on the basis of the cost inflation index for 2007-08, the long-term capital gain would work out to be Rs.23,45,505. The tax payable thereon would be @ 20 pc plus a surcharge @ 10 pc and education cess @ 3 pc. The capital gain tax cannot be saved if the investment of capital gains is made in the acquisition of a plot only. It will be better to get the actual cost of the house property certified from an approved valuer so as to compute the indexed cost and thereafter compute the capital gain arising on the sale of such house property. The writer can be contacted
at sc@scvasudeva. com
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POUND OF PLUSH
Fuelled by the country's rapid economic growth and increasing number of high net worth individuals (HNWIs), residential investment by Indians in the United Kingdom is likely to touch a whopping £15 billion over the next 10 years, says a report.
"Indians could potentially own 20,000-30,000 UK residential properties over a 10 year horizon and UK-India cross-border investment is all set to grow to £10-15 billion by 2018," the latest Jones Lang LaSalle's report titled 'UK-India Cross-border Residential Investment' says. The report further highlights the fact that with no restrictions on Indians investing in UK residential property and strong house price growth, the market would continue to see the current investment size of £0.6-1.2 million grow exponentially over the next 10 years. Indian investors are particularly interested in the UK property market as it offers greater transparency, long leases of up to 25 years, stable long-term income generation capacities, and the London Olympics in 2012 being in the vicinity. Besides steel czar Laxmi Mittal, who has bought a number of homes in the past couple of years, there has been a growing tide of low-profile purchases by Indians. The combined value of the three properties owned by Mittal family on London's Kensington Palace Gardens is said to be about £ 440 million. The number of such Indians with the propensity to invest in the UK residential market is likely to increase to 583 million by 2025 coupled with another 400,000 High Net Worth Individuals by 2017. "UK-based developers are increasingly interested in attracting investors from India. They are targeting not only the high net worth individuals but also the upper middle segment," Homebay Residential, a subsidiary of Jones Lang LaSalle Meghraj managing director
Raminder Grover says. The Berkeley Group, one of the most respected names in the UK property market, will be launching two of its most exciting developments at exhibitions in Mumbai and Delhi, in a bid to address this
growing demand. "As the Asian middle class grows, more of them are looking abroad for sound investment opportunities. ...Indian investors are some of the most discerning buyers in the world and we believe that they are ideally suited to such purchasers," Berkeley Homes (Urban Living) Ltd managing director
Paul Vallone says. — PTI
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GROUND REALTY Jagvir Goyal Vitrified tiles are fast becoming the favourite flooring material in India. Marble flooring almost wiped out terrazzo flooring during the last two decades. Now, vitrified tiles are replacing marble. This trend is quite evident in metros and advanced cities. Commercial buildings and modern offices have completely switched over to vitrified tiles. Residential buildings are also using vitrified tiles because of the lesser time involved in providing this flooring as no polishing work is involved. Polishing of marble is a time-consuming process and needs repetition after some years. Vitrified tiles induce a feeling of readymade flooring. However, marble flooring is still prevalent in the towns and rural areas. A few years back, there were only three or four manufacturers of vitrified tiles. The cost of the tiles was also very high. Now, many companies have entered the market. Tough competition among the manufacturers has resulted in better quality of tiles available at almost 50 per cent of the initial rates. The buyer is the gainer. A lot can be saved if certain things are kept in mind while buying these tiles. Here are a few guidelines: Tile basics: Vitrified tiles have very high dimensional accuracy, high breaking strength, high abrasion resistance and almost zero water absorption property. These are much harder than ceramic tiles. These are produced from white imported clay that is quite a suitable material for vitrification process. Silica, kaolin, feldspars are the other ingredients added to it. The press used to produce these tiles from clay applies 3500 to 4800 tonnes of weight on the clay. That’s why these tiles have no porosity. The more is the weight applied, the better are the tiles. The pressed tile cakes are first dried in dryers and heated at 250 degree C to remove moisture. Then these are burnt at an extremely high temperature of 1220 degree centigrade. Thereafter the tiles are polished. Polishing of tiles: For polishing of vitrified tiles, ultra modern imported polishing machines are used. A polishing machine has many polishing heads. The more is the number of polishing heads, the better is the polish. Machines used by different tile manufacturers have 26 to 46 heads. A machine with maximum polish heads will give the best polished tiles. There is no need of doing messy polishing on vitrified tiles as required for marble. Manufacturers: There is such a huge variety of vitrified tiles available in the market that the consumer is completely lost among the makes, unable to decide which make to choose. Tile manufacturers are indulging in extensive advertising. All makes, therefore, look branded. However, technically, R.A.K, NITCO, Naveen, Granamite and Johnson’s Marbonite are the top brands followed by Somany, and Romano. There is variation in the manufacturing process adopted by different manufacturers. While choosing vitrified tiles, always check the process adopted by the manufacturer. Otherwise, ask an engineer for the best brand as he will already be conversant with the processes adopted by various manufacturers and will help you make your choice. Process checks: Check the manufacturer’s pamphlet to know the basic material used by him in manufacture of tiles. Further, check the weight applied by the press during manufacturing. The more is the weight, the better is the tile. See that the weight applied is 4800 tonnes. Check the burning temperature. It shouldn’t be less than 1220 degree C. Check the number of polishing heads used. These should be plus 40. Check if the manufacturing process is soluble salt print technology or double charged technology or roll feed technology. Double charged technology is the best. Further check if dry glaze or wet glaze technology has been used. Dry colour technology is better as it provides the best shade to the tiles by minimising the variation in it. Size and thickness: The available size of vitrified tiles is as large as 8 feet x 4 feet. Bigger sizes give feeling of vastness but these are costlier and less stronger than smaller sizes. Best is to choose 2 feet x 2 feet size of tiles. Look at the back of tiles for knowing their quality mark. Always choose first quality of tiles. Their box is marked as Premium. Never go for commercial quality. Commercial quality tiles cost lesser but suffer from defects that become apparent after a few months of use. Unlike ceramic tiles, there are no grades in vitrified tiles. However, there is a lot of choice in top finish. Choose 9 to 10 mm thick tiles for better durability and strength. It is an individual’s choice whether to provide these tiles butting each other or to leave a gap between them and fill it with a grout later on. In the residential areas, prefer butting of tiles with minimum joint width. Cost factor: Till end 2006, vitrified tiles were costing Rs 70 to 75 per sq ft. Further, these were not fully vitrified tiles. Fully vitrified tiles were not available at least in this part of country. By mid 2007, cost of vitrified tiles came down to Rs 55 to 60 per sq ft. Now, it is Rs 45 to 55 per sq ft. In mid-2007, fully vitrified tiles manufactured by double charged technology also became available here. However, their cost was around Rs 95 to Rs 100 per sq ft. Now, availability of these tiles is better and the cost has also come down to Rs 70 to 75 per sq ft. Save a box: Whenever you choose vitrified tiles in flooring, it is better to keep a few extra tiles in store. If ever, a tile gets broken or badly scratched due to hard pushing of furniture, steel cupboards etc, you may find it difficult to get an exactly matching tile in the market. Variation in their shade is a natural feature of these tiles. Though you may find safe storage of tiles a challenge, buy a box, scribble ‘vitrified tiles’ on the packing and put them in the loft under least use. Normally, one box has four tiles of 2 feet x 2 feet size. Also note down the make and proportion of color pigment mixed in white cement for jointing of tiles on the packing box. On the staircase: A few companies are now producing special vitrified tiles for use on steps of the staircase. These tiles are having 800 mm length. For 1.2 metre wide steps, one full tile and a half tile can be used on every step thus avoiding any wastage. Tiles produced for the risers are 158 mm wide. Therefore, in case you intend to provide vitrified tiles on staircase steps, keep the riser depth as 166 mm, 8 mm of it will be used by the thickness of the tiles fixed on the tread and the balance 158 mm will be covered by the riser tiles. Thus you must decide in prior if vitrified tiles are to be used on steps and cast the concrete steps accordingly. Step or tread tiles are 318 mm wide. The best part of these tiles is that these carry an inbuilt nosing and you have not to get it made as in case of marble. Keep the width of steps as 298 mm while laying concrete base so that step tiles are fixed to cover full width of steps and a nosing of 20 mm is available. Tiles provided on the steps look beautiful. Choose matt finish or sand finish tiles so that there are no chances of your slipping on the steps. Go ahead. Happy building! The writer is deputy chief engineer, civil, PSEB. He can be reached at www.jagvirgoyal.com
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