|
|
|
| REAL ESTATE |
|
|
|
|
|
Developers take the sop route
The slump in the real estate sector has now forced developers in the region to go for desperate measures. From offering concessions on EMIs (EMI to be paid only after the possession is granted), freebies like foreign trip to Singapore, Malaysia and Thailand and “Navratra special discounts”, developers in the region are going all out to woo the elusive buyers. The party being offered to the buyers does not end here. Builders are now promising to furnish the house/apartment free of cost, while still others are offering plasma televisions or washing machines. “The rising interest rates have hit the real estate market hard. There have been no sales for the past two months, forcing builders to halt their projects. These sops are desperate measures to get the realty sector back on rails,” says a top realtor in Zirakpur, requesting anonymity. With supply over-exceeding demand, and builders’ unwillingness to lower the retail cost has led to a slowdown in the construction of these projects. The rising interest rates and construction costs (steel and cement prices have been on a boil) have further aggravated the situation. A majority of real estate projects coming in Mohali, Zirakpur and the Kharar- Landaran belt have already gone slow on construction, while a sizeable number of projects in Zirakpur have put all construction work on hold.
On one hand, there are no genuine buyers while on the other, the speculative buyers (those who had booked the flats by paying the booking amount), too, are waiting to exit. Since the builders are unable to get buyers, they are under pressure to return the booking amount after the bookings are surrendered. Obviously not ready to return the amount, the builders are under pressure. They are hoping that they will be able to sell a major part of their projects by wooing customers through the “sop route”. With home loan rates having been hiked by the banks, genuine buyers are feeling the pinch. Over the past one and a half year, the rate of interest on home loans has gone up from 9 per cent to 11.75 per cent. This means the investor has to shell out a fatter check as installment for his loan. As a result, a number of home loan accounts have become non-performing assets (NPAs). This, in turn, has forced the banks to slow down the advances in this sector. Most of the banks have now come up with stringent regulations for approving projects for granting loans even as they are now enriching their home loan portfolio by giving advances in the other commercial real estate projects (OCRE) and Infrastructure Commercial Real Estate (ICRE).
|
|
|
Engineering SEZ to push exports The special economic zone (SEZ) to come up on 255 acres at a premium location in Gurgaon adjoining Industrial Model Township (IMT) Manesar is the first-ever engineering SEZ to get notification in northern India. This SEZ project will involve an investment of around Rs 4500 crore. The SEZ will be launched in phases and the first phase is expected to get completed within three years. Being an engineering SEZ, it would cater to all international and national engineering companies. “Investors and well-reputed business houses from across the globe have expressed keen interest in associating themselves as co-developers and investors in the SEZ,” claimed Navin Raheja, chairman Raheja Developers. Of the total usable area of approximately 20 million sq ft, the processing zone will be developed on 50 per cent of the area, while the rest will be utilised to create social infrastructure for residential, commercial, institutional and educational purposes. The processing zone will further be segmented into complexes for light engineering goods exporters and industrial sheds for heavy engineering units. Besides economic advantages of conducting business in the SEZ in terms of elimination of distortions resulting from tariffs and other trade barriers, the corporate tax system, bureaucracy and missing infrastructure, the project will provide world-class residential and other supporting facility. “We will develop around 7 million sq. ft. of residential area to trigger the corporate shift from Delhi and NCR to Manesar enabling “walk-to-work” culture. This implies that corporate houses could now co-locate their offices and residential places in order to save time in commuting,” said Raheja. As for finance, the SEZ will be funded with a mix of equity, debt and internal accruals. “Our negotiations are currently on with both Indian engineering manufacturers as well as
overseas engineering companies interested in off-shoring global production. Our company has also been approached by reputed international construction companies who have further expressed interest for strategic alliance, he added. The engineering SEZ, it is claimed, is set to induce dynamism in the engineering export performance of the country in the light of the fact that engineering exports in India crossed Rs 81,000 crore in the year 2005-06, which accounts for 23 per cent of the total export from India. The promoter perceives a substantial fiscal benefit for the exporters operating from the SEZ based on engineering export for the financial year 2005-06.The saving of annual taxes are expected to be Rs. 3000 crore for exporters of engineering goods from India. The exporters from northern India itself will be able to save up to Rs 900 crore, it is estimated. Moreover, the coverage of the total industrial area in excess of 10 million sq.ft. is sure to have a direct positive impact on the current employment rate. The project is expected to create employment opportunity for around 50,000 people and has potential to generate exports worth $ 2.5 billion.
Out of the total 255 acres, about 60 per cent land had been purchased from the farmers/land owners directly at the current market prices. For around 40 per cent of the land, the company had entered into a partnership agreement with farmers/land owners wherein the part of lease rentals of the buildings would be shared with them. Raheja claimed that the land acquired was through active consent and participation of the farmers, and there was no forced land acquisition. The company has promised jobs to two persons from each family of the farmer whose land had been purchased by the company.
|
||
|
How to lay pvc flooring The base: Before using PVC tiles or sheets for some portion of your house, provide a concrete floor in that portion, cure it well and allow it to dry. See that the concrete floor is perfectly even. As the thickness of PVC tiles or sheet is very less, any unevenness of the base will be easily visible after the laying of tiles or sheet over it. Not only that, it will cause damage to the tiles. A metal or wooden base can also be provided but concrete base remains the best choice and proves most durable. PVC material: See that the PVC flooring is 3462 marked irrespective of it being supplied in sheet, tile or roll form. Choose PVC tiles or sheet of reputed make. While selecting tiles, see that these tiles are not curled up and there are no cracks, breaks or folding wrinkles in them. Take a sample and check it for right angles. Chances are there that the cutting of a batch of PVC tiles is not in right angle. Such tiles will cause problems in the rooms, leaving small uncovered triangles near the walls. Thickness: PVC tiles and sheets are available in thickness varying from 1.5 mm to 4.0 mm. Choose 1.5 mm thickness for residential purposes. Check the thickness of tiles carefully by using a dial gauge. A scale will not give the right thickness. Size and texture: PVC tiles are available in many sizes, the most common sizes being 12”X12” and 16”X16”. The sheets are available in widths of 1000, 1500 and 2000 mm. Their length is 10 metres or more. Prefer to choose tiles of 16”X 16” size. These are produced in many colours, textures and designs. Choose such a pattern and color that may hide scratch marks as PVC tiles are susceptible to scratches. Adhesive application: Prefer to use a rubber adhesive for fixing of PVC tiles to the base. Fevicol SR 998 and Dunlop S 758 are some of the really good adhesives. For best results, a notched trowel should be used to apply the adhesive on the floor. It gives a good grip to the tile. Apply the adhesive both on the base as well as back of the tiles. Take care that after its application, the adhesive takes some time for setting. Generally this time varies between 15 to 25 minutes. Test for checking it is that the adhesive will feel sticky to fingers but will not come off. This is the time to fix the tile on the floor. Don’t allow too much time to pass otherwise the adhesive will get set fully and a bond of the tiles with the base will not be developed. Laying of tiles: Don’t start laying tiles from a wall onwards. Begin laying tiles from the center of the room towards the sides. Best method is to move along the diagonal of half of the room i.e. lay first tile at corner of center line and side wall. Now lay tile 2 and 3 on each side of tile 1. Next, lay tile 4, 5, 6 covering the sides of tiles 2 and 3 and so on. For skirting on the walls, use pieces from same tiles as on the floor by keeping the width anywhere between 3” to 6”. Laying along walls: To lay cut pieces of PVC tiles along the walls and corners for covering the space left between the last line of whole tiles and the wall, follow this special method: Consider first row. Lay a tile ‘X’ exactly over the last laid tile in the row. Lay another tile ‘Y’ over it and push it to the wall. Mark the cutting line on the tile X. You will get the piece that fits exactly in to the space left. Do this for each row of tiles. If a corner is to be covered, you will have to draw two lines on tile X and you will get an L shaped cut piece to fit in to the corner. This method will not leave any crevices near the wall (occurs when tile piece is under cut) nor will create a ridge near the wall (occurs when tiles are over cut) and the space shall get filled in a perfect manner. Precautions: Never lay the tiles on a damp base. If done so, the moisture will not be able to evaporate and tiles will curl up after a passage of time. During laying, leave no gap between the tiles. Always run a hand roller of about 5 kg over the laid tiles to drive out any air between the tiles and the base. Specially keep checking the tiles for any undulations in them and squeeze out such undulations before the adhesive gains grip. Exposed edges: Always provide metallic edge strips to the exposed edges of PVC tiles. Such exposed edges will be found in doorways, staircases etc. The edge strips protect the PVC tiles from damage. Fasten the metallic edge strips securely to the base. Putting to use: Allow 24 hours to pass after the laying of PVC tiles or sheets. Prohibit walking over the floor during this period. For final cleaning of tiles after their laying, mop them with lukewarm soap solution. Don’t use water for their washing. Finer points: Prefer to engage skilled persons available with PVC tile supplier for laying of tiles. Good quality PVC tile flooring costs around Rs. 30 to 35 per sq.ft (excluding the cost of concrete floor below it). As these tiles are just 1.5 mm thick, these may sometimes be laid over any other flooring in concrete or stone or wood that has not come up to your liking. Go ahead. Happy flooring! The author is Deputy chief engineer civil PSEB, and can be reached at www.jagvirgoyal.com
|
||
|
Tax tips
— A.K. Mehrotra
A. The answer to your query is based on the presumption that the house in which you are presently living is a long term capital asset i.e. you have owned it for a period of three or more years. In accordance with the provisions of section 54 of the Income-tax Act 1961 (the Act) capital gain arising on the transfer of a long term capital asset being a residential house, if invested in the acquisition of a new residential house before one year of the date of transfer of the old residential house, the capital gain so realised would not be chargeable to tax provided the cost of the new residential house is equal to or more than the amount of such capital gain. In view thereof, you can get the benefit of the exemption from the taxability of the capital gains in case you comply with the above requirements.
Property possession
Q. I had paid an advance for the buying of a property and entered into an agreement to sell with a party. The possession of the property was to be handed over along with the execution of the sale deed. The agreed date was April 30, 2008. However, the seller backed out and I had to go to court for a specific performance of the agreement. The matter has been pending in the court, but recently the advocate of the opposite party has approached for an out-of-court settlement and has agreed to pay a compensation in view of the cancellation of the agreement to sell. Will the amount of compensation be taxable?
— J.K. Chanana
A. Section 2(47) of the Act defines the term “transfer”. However such definition is merely inclusive and does not exclude other kinds of transfer. In other words, the expression “transfer” in the aforesaid section must be read widely and not narrowly. The definition as contained in the aforesaid section provides that a transfer in relation to a capital asset includes the sale, exchange or relinquishment of the asset. The agreement to sell has given you a right which would be relinquished by accepting the compensation amount. The sum so received would be subject to capital gains tax. This issue has also been so decided by the Madras Bench of the Hon’ble Income-tax Appellate Tribunal in the case of K.R. Srinath vs. CIT [80 ITD 193 (Madras)]
|
||
|
Determining agricultural land
— K.K. Arora
A. In order to qualify for agricultural land in India, it is not necessary that land was once an agricultural land. It must be agricultural land at the time of the sale thereof. The true test to be applied for the purpose of determining whether a particular land is agricultural or not is to ascertain in the first instance the purpose for which such land is being used. If the same is being used for agricultural purposes or even if agricultural operations have not been carried out for sometime but it is apparent that the land is meant to be used for agricultural purposes, it would be an agricultural land. In case the land is being used as an agricultural land as on the date of sale, the purpose for which the purchaser intends to use the same is not relevant and should not be the basis for determining the nature of such a land.
|
||
|
Recent times have seen a renewed interest in people for using PVC sheet or tile flooring in parts of their residential, non-residential or commercial buildings. Though marble, wood, vitrified tiles and ceramic tiles are the most commonly used materials, PVC flooring becomes an attractive choice with lesser time involved in its laying and ease of cleaning it with a wet. However, choosing and laying PVC flooring demands special attention towards certain aspects to enjoy its long-term maintenance-free use. Here are a few guidelines:
Q. I own a residential house which is insufficient for my family. I intend buying another house and have selected the same which would be sufficient for the needs of my family. I have, however, not been able to find a suitable buyer for the house where we are presently living. In case I borrow money and pay and acquire the new house with the borrowed money and pay off such borrowed amount from the sale of the old house, can I get any exemption from tax on the capital gain likely to arise on the sale of the old house? 
Q. What are the tests for ascertaining whether a particular land is an agricultural land?