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In Ludhiana, buyers’ interest rules
The Puris moved house every two years for twenty-seven long years till they finally bought one. From a young couple to a five-member family, they saw Ludhiana change, grow and choke. While Mr Puri’s retirement meant different things to each member, there was one thing common: the house of their dreams with walls the colour of their will and a kitchen with a shelf the short Mrs Puri could reach! After almost a year of hunting, they zeroed in on an apartment boasting all “modern amenities”, made the deposit and moved in with great fanfare. Two months later, they morning newspaper reported that their apartments were illegal and faced demolition... The Puris’ is not an isolated case. Thousands of gullible buyers and investors flip for fancy apartments and then find themselves trapped in the quagmire: life’s savings gone for an apartment that is on the demolition man’s hit list. Who could have imagined that the Puris’ picture postcard block of 300-odd apartments was illegal? Now, the Greater Ludhiana Area Development Authority (GLADA) will step in to warn buyers and investors. It has decided to erect public hoarding outside all illegal activity sites in the city, advising people to refrain from investment. Only houses and flats approved by the authority are legal and it has decided to demolish all new illegal structures. Confirming the development, GLADA chief administrator A. K. Sinha says, “Everyday we receive complaints from buyers duped into buying illegal properties even though we had pointed that out. Obviously, they had no idea and that the fact that the properties were not approved was concealed from them. Our basic idea is to nip the problem in the bud and save innumerable hapless people, which we hope to do by putting up signboards at all illegal sites.” To identify all such sites, a Delhi-based company has been hired to provide landscape data with aerial photographs to map all developmental activity in the cityscape, particularly illegal constructions. “We are recruiting a new team of officers and buying vehicles to regularly monitor the cityscape to prevent future illegal growth. Two new town planners are also being appointed to keep a direct tab on illegal activity on the ground," he adds. The authority is completing formalities for demolishing of constructions at seven sites in the city area. Sinha said a public notice was being issued following approval of the Ludhiana Masterplan spelling out strict action against illegal colonisers in order to set a strong precedent. Assistant chief administrator S.R. Kaler gave details of ongoing departmental action against defaulters. “The authority has lodged 430 FIRs against illegal constructions and filed 83 cases in courts. We have also sought land records of 380 cases from the office of the deputy commissioner to pursue the matter of illegal buildings. The department needs to have the details of the 'jamabandi’ and the registry papers of the property under the scanner, besides a map of the land piece,” he says. The authority found that several companies were constructing houses in areas that were much less than what was specified in their master plan. In certain cases, houses were constructed on less than one-fifth of the area shown in the plans! "We will have the city aerially mapped with particular emphasis on new construction activity," a senior official said.
For the moment, a very strong message has been sent out against illegal constructions though it is meant more for investors: Be cautious, verify the builders’ antecedents, scrutinise the property papers, check for GLADA approval. Don’t let the dream home turn into a perpetual nightmare.
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Destination Next
His decision brought about a revolution in the Terai landscape as the Government State Farm -- later Pantnagar Agriculture University -- cut down forests paving the way for large-scale farming. Six decades later, another revolution has further altered the Terai plains: Formation of the separate hill state of Uttarakhand and subsequent development of Pantnagar as an industrial estate.
As industries have been coming here in droves since 2001, the area’s landscape has changed forever. Following setting up of several units at Pantnagar industrial estate, Rudrapur -- the district headquarters of Udham Singh Nagar district -- has gained tremendously. The economic impact is quite discernible. Its lush green fields have made way for a five-star hotel, malls and branded showrooms, transforming it completely. When veteran leader Narayan Dutt Tewari was the chief minister of Uttar Pradesh, Pantnagar saw some industrial development but with the Congress losing out, the place went back into oblivion.
It was again Tewari, who after becoming the first elected chief minister of Uttarakhand, carved out the Pantnagar industrial estate. Following the award of Central Industrial Package (CIP) in 2003 to Uttarakhand, Tewari declared Pantnagar as the state’s first industrial estate. The decision brought in loads of money as industries flocked to the area seeking excise and tax benefits. "Once a sleepy township, Rudrapur has got a complete makeover courtesy hectic industrial activity in Pantnagar. Showrooms of top brands, modern housing and hotels; it’s all here now" says Sibtenabi, a local social activist. The five-star Radisson Hotel Metropolis Rudrapur is coming up and is scheduled for a 2009-opening. Brands like Levis, Reebok, Monte Carlo and many more are also making their presence felt. If industry has arrived, can realty be far behind? Construction major Omaxe Limited is setting up a township in the Pantnagar-Rudrapur industrial area with an investment of Rs 500 crore. The company has already purchased 46 acres to build its Omaxe Riviera Township comprising 2,200 residential flats and all modern amenities. Upon completion, 60 per cent flats are estimated to be taken up by managers and staff of corporate houses setting up shop in the area. Companies that have invested in Pantnagar include Dabur, Britannia, Bajaj Auto and Tata Motors.
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Calculating Deduction
Upper limit Rs 1 lakh S.C. Vasudeva
A. Any amount paid for the purposes of purchase or construction of a residential house property where such payments have been made towards or by way of stamp duty, registration fee and other expenses for the purposes of transfer of such house property by the assessee is allowable as deduction under section 80C of the Act within the monetary limit of Rs 1 lakh provided for in the said section. Such an expense need not flow from borrowed funds. The following payments are however, excluded from being covered under the above-mentioned section. Admission fee, cost of share or initial deposit;
First build house
A. Section 80C of the Act provides that in computing the total income of an individual assessee, there shall be deducted any payment made towards or by way of repayment of loan borrowed from a bank by such an individual for the construction of a residential house for his own residence. The allowable deduction would be within the overall limit of Rs 1 lakh, as specified in the aforesaid section.
In view of the above, you are not entitled to claim a deduction in respect of the payment made towards the repayment of the loan raised for the acquisition of a plot.
Rental matters
A. Section 80GG of the Act provides that in computing the total income of an assessee not being an assessee who is in receipt of house rent allowance, there shall be deducted any expenditure incurred by the assessee in excess of 10 per cent of his total income towards the payment of rent used for his own residence to the extent to which such excess expenditure does not exceed Rs 2,000 per month. This deduction is however subject to the following conditions: The assessee or his spouse or his minor child or where such assessee is a member of a HUF, does not own a residential house at the place where the assessee ordinarily resides or performs duties of his office of employment. The residential house owned by the assessee at any other place than the above though in his occupation for his own residence cannot be occupied owing to his employment, business or occupation carried on at any other place and the assessee has to reside at that other place in house not belonging to him. The deduction is limited to a maximum amount of Rs 2,000 or 25 per cent of the total income, whichever of the two is less. A declaration in Form 10BA is filed along with the return of income.
You have a tax liability
Is capital gain tax to be paid on the amount received as compensation? Is the amount to be invested in purchase of agricultural land only? What are the other options, if any? What is the time frame in which the amount has to be invested to avoid payment of capital gains tax? A. The facts given in the query are not complete. You have neither indicated the location of the agricultural land nor the date of receipt of compensation. The reply to your queries given hereunder is based on the presumption that the agricultural land acquired in the year 2003 was situated within the jurisdiction of the municipal authorities or was within such distance of the municipal authority as has been notified by the Government and the amount of compensation was received before the 1st day of April 2004. The amount of compensation received would be exigible to capital gains tax. The capital gain would be computed in accordance with the provisions of section 45(5) of the Act. Accordingly, the compensation awarded in the first instance shall be chargeable to tax in the year in which such compensation or part thereof is received. Any amount which is received toward the enhancements of the compensation would be taxable in the year in which the enhanced amount is received. The exemption from the taxability of capital gains is available in respect of capital gain arising from the transfer of an agricultural land which was being used in the two years immediately preceding the date on which the transfer took place by the assessee or parent of his for agricultural purposes and the amount of capital gain is invested in the purchase of any other agricultural land within two years of the date of the transfer. The other option in your case is to purchase tax saving bonds. These have to be purchased within six months of the date of the transfer of the agricultural land. On the basis of facts, it seems the time limits for making investment in agricultural land or buying the tax saving bonds has expired. You would thus be liable to pay capital gains tax in respect of the compensation received for the land acquired. I may add that the compensation or consideration for transfer received by the assessee on or after 1st day of April 2004 in respect of the agricultural land situated within the municipal jurisdiction or within such distance of the municipal jurisdiction as notified by the government is exempt from tax in view of the provisions of section 10(37) of the Act.
This column appears weekly. The writer can be contacted at sc@scvasudeva.com.
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Speaking Tree
Every tree or plant comes with a meaning & reason. Think, then plant, for, landscape is not momentary, writes Satish Narula
After visiting various housing societies, colonies, cities, fun parks and other public places under development, I am fast reaching the conclusion that greens are mostly planted without planning. The concept of landscaping is either warped or sadly missing. It seems plants have been put here and there clearly indicating commercial consideration — to sell as many as possible. Ignorance about the subject may be another reason, as I would like to believe. I recently visited an upcoming housing project near the canal near Punjab Agricultural University to find about 50 or more Araucaria cooki trees (commonly called Christmas trees) grown on a slope running along the drive-in at the entrance.
The planner is definitely ignorant of the fact that this plant bends so much in later years that it may fall on passersby, putting their lives and property in danger. Imagine what will happen to the landscape after a few years when all these trees have to be removed! At many other places, I have observed very close planting of the trees of Ficus species, especially Ficus benjamina, along boundary walls for its foliage and the fast-growing screen it offers. Now, think of what happens to a wall along which a peepal tree, belonging to the same family, is growing? After a few years its growing trunk and roots lift the wall and damage it and you end up accommodating so may of their relatives together along the wall. Surprisingly, even these tree species are being used as ground covers in the central verge! One may say that a place looks good with many plants planted together blending civil structures that may include water features, sculptures, pergolas and gazebos, but remember the pleasure of landscape is not momentary. Its effects have to be felt over long years, even generations. Unlike civil structures, the trees grow and attain a form to be enjoyed at a time when it has attained its potential pattern of growth. It is at that time that there is conflict between the two — civil structures and greens. Needless to say, the tree suffers casualty. It either has to be removed due to spread of roots underground or chopped off mercilessly to ‘open’ the view of the structure. The very effect for which it was planted is totally lost and the tree has to pay for it with its life. It is exposed to various deadly diseases and insects, drastically shortening its life. Planners, always keep in mind that judicious preparation by a horticulturist before actual planting is a must. Every tree has a meaning and explanation to be out there. Therefore, it is of utmost importance to know the nature of the plant. The potential of trees has to be understood before locating them. In general, trees and plants too have architectural beauty. Some show it off in growing pattern whereas others express it by attaining extraordinary framework. The main trunk may be another strong feature that may equal — or even surpass — a manmade sculpture. This column appears fortnightly. The writer is a senior horticulturist and can be contacted at satishnarula@yahoo.co.in.
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Five decades ago, there were only dense forests in the Terai region in the foothills of the Kumaon Himalayas. The then Prime Minister decided to make land available for Sikh farmers.
Q. I recently acquired a house in Gurgaon and such house has been registered in my name. I have paid the stamp duty and registration charges. Are these amounts allowable as deduction against my total income?
Q. I am working in a bank and presently posted in Faridabad. I have taken loan for buying a plot in Faridabad and intend constructing a house in a year or two before the date of my retirement so that I can settle down in Faridabad itself. Am I entitled to claim deduction for the amount repaid towards the loan so raised?
Q. Would you please explain under what circumstances the house rent paid by an assessee is deductible from his total income?
Q. My agriculture land in a village, now part of Greater Noida, was acquired in 2003 by the Noida Authority. I would like to know the
following: