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TREND MILL Set aside religious inclinations & indulge. Do up your home, decorate a tree, exchange presents and feast on a rum cake! Saurabh Malik
And then there is this meltdown. It’s causing seepage in your saving account. You are counting every penny flowing out of your wallet. Suddenly stuff essential a year back has taken on hues of extravagance But at the same time, Christmas and celebrations are synonymous. Otherwise also, Christmas now has attained the proportion of festivity for the masses, regardless of religious inclinations. So, do decorate your house for the big day. Deck it up
JUST like Diwali, Christmas decoration starts at least a week before the big day. Don’t look at the calendar, you still have time. Catch hold of the maid: Wash, clean, scrub and polish the entire house, paying attentions to the corners. After all, that’s where the Christmas tree is going to be. To begin with, look for all those fused and faulty bulbs. No fun having a dark corner in the house on a day that dispels the light of happiness. Now, prepare an alluring showpiece for your Christmas dinner table. You can easily do this by keeping luscious fruits in a clear glass bowl. Some of the imported fruits of global economy, including Washington Apples and sweet smelling oranges look, and taste great. Also include a bunch of black grapes. In Chandigarh and some other boomtowns of the region, you can get the stuff from Chaupal, Reliance Fresh and other retail outlets. Also place an angel-shaped Christmas cake on the table. So many bakers and confectioners in Chandigarh, Ludhiana and even Shimla prepare special cakes for the occasion. “You can go in for cakes specially designed for the Christmas dinner table,” says Jagdish Seth of Kandy’s Pastry Parlour in Chandigarh.
Branch out
START your Christmas shopping with an impressive, carefully trimmed, Christmas tree. Go in for the native Indian Christmas tree available at several general and provision stores, if you wish to save bucks. In Chandigarh, at least five wholesale and general merchandise dealers in Sector 20 offer you trees for less than Rs 200. Otherwise, pick up the ones all the way from China, which are far more striking. A wholesale dealer in X’Mas decorations, Yogender Kumar suggests trees with glowing needle tips. “You can even buy revolving Otherwise, the price varies with size, quality and features. “A simple miniature tree can be had for less than Rs 50. A slightly bigger one will cost something like Rs 600,” he asserts. “For the ones decorated with technology, you have to pull out something like Rs 2,000 from your wallet.”
ANGELS are auspicious and bring peace, tranquility, joy and harmony in the house. So do not forget to decorate your tree with angel ornaments. “Also up for grabs are glittering bells in gold and silver,” says Chetan of a Chandigarh gift and chunk jewellery
shop, The Jewels.
There are other decorations also. Capt Rajneesh Talwar of Station-14 on Panjab University campus recommends miniature Santa, drums, gift boxes and even felt stockings. “Do not forget to pick up buntings and twinkling star,” he adds. If you are going in for red Christmas stockings to hang from the windowsill, remember to get the stuff personalised. Get on the stockings your spouse, kid and even the pet’s name! Go in for golden letters to look all the more festive.
Remember the mistletoe
GLITTERING mistletoe with glowing tips are there to dazzle you like never before. Brought all the way from China via Mumbai and Delhi, the electric replica of magical, mysterious and sacred plants of European folklore, in fact, promises to add sparkle to the shimmering celebrations. These green shrubs with small yellow and red flowers made out of light-emitting diodes (LEDs) are already a craze. You can take home mistletoe by shelling-out anywhere between Rs 250 and 1,200. So fellows, happy decorating!
The real thing
If plastic trees put you off, try an Araucaria cooki tree. Chances are your garden already has one. If not, it is available in most nurseries as ‘Christmas tree’. Prices for a potted, two feet tree start at Rs 250 and bigger the tree, more expensive. Choose an erect tree, the species tends to bend without support as it grows. The nursery gardener will suggest the accurate pot-size for the plant and may even transfer it for you against a small payment. Involve the kids in decorating. While choosing ornaments for a live tree, keep in mind size, weight and the hanging mechanism. Loop type is most suited. Hang on branch tips and in between. For a snowy effect, make ‘flakes’ with cotton wool. The plus point of a ‘live’ tree is that it will be grow about eight inches till next Christmas, provided you move to a bigger pot with rich soil and look after it well. In the meantime, it will add to the beauty of your garden! For trees, if you are in Chandigarh, check out the Kitchen Garden Society-23, Khullar Florists-9 and Durga and Shiwalik nurseries on the IT Park road.
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Boost for Baddi
THE concessions announced by the Union Government have rekindled hope among realtors in the region. The mood is upbeat in the Baddi-Barotiwala-Nalagarh industrial area, rated as cheapest in terms of market investment both among the metro-economy and emerging markets. Here, investment worth crores is at stake with nearly 1,500 flats were ready for sale.
What has indeed set realtors smiling is the cut in reverse repo rate or the rate of interest at which RBI borrows money from banks. Post the cut, banks would no longer benefit by stacking cash in RBI and would be better off lending it out, especially to the realty sector, which ensures an interest of from 9 to 12.5 per cent a year. Earlier, loans to this sector had been virtually put on hold following instructions from the finance ministry. Though the directions were later reversed, banks had shown little inclination to extend loans to the real estate sector. “Banks would also reduce their rate of interest while extending loans to the realty sector,” said a realtor with investment of several crores in the BBN area. So, what makes the Baddi-Barotiwala-Nalagarh belt score? The area has staked claim as the outskirts of the tricity, comprising Chandigarh, Panchkula and Mohali. While the tricity has little to offer to a middle-rung businessman, BBN is emerging as the lone business centre offering potential for growth. Sample the exceptionally high rates of realty in the tricity: one square foot of commercial space costs a whopping Rs 15-25,000, while the same can be had in BBN between Rs 5,000 and 7,000. Similarly, one can own a shop at a modest price of Rs 30 to Rs 35 lakh in any of the many malls coming up in BBN. In the tricity, the same purchase would require over a crore, explains a realtor. Further, with a special package for home loan borrowings also on the anvil, buyer numbers are likely to swell. Strange as it may sound, the recession is also likely to contribute to sales. Hundreds of corporate executives commuting daily from Chandigarh and its precincts have been directed by head offices to cut down daily consumption of fuel and exorbitant housing facilities being availed by them in the tricity area. Realtors perceive this to be the best time for the housing sector. In addition to some 1,500-odd flats for sale, there are also villas replete with modern facilities available in the scenic ambience, away from the hustle and bustle of a city that, too, at a modest price in comparison to the Rs 2 crore needed to purchase just a one kanal plot in Chandigarh. “Home loan queries could be counted on fingertips in the past few months. The promised cut in interest rates has brought with it loan seekers and is a first positive step for the sagging housing sector,” observed an official of a leading bank’s Baddi branch. Despite the much-touted slump, BBN managed to draw mega units like leading apparel brand Provogue, Indo-Rama, Global Indian Tobacco Company and a software-chip manufacturing unit. And with it, investments totalling Rs 3,500 crore. For the time being, good times seem to be returning to the Baddi-Barotiwala-Nalagarh belt.
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Make a FD, opt for TDS
S.C. Vasudeva Q. I am a resident of Ludhiana. We have three acres of agricultural land (jaddi-pushti) in a nearby village, which we want to sell. We will get Rs 50-60 lakh from this sale. I have been filing nil returns for last two years my salary is Rs 8,000. My father retired from the civil supplies department in 2007 and doesn’t get pension. We want to invest this amount in FDs @ 10.5 % interest, which would work out to around Rs 5 lakh a year. I want your suggestion on the following: n If we invest the whole amount in FDs, will the amount realised after one year be taxable? If yes, how can we save TDS deduction? n
If after three-four months of sale, we want to purchase plots in Ludhiana city, will we have to pay any tax? n
What is the best option to use this amount by paying least tax? — Avtar Singh, Ludhiana A. The answer to your queries is as under: n
The facts given in the query do not indicate whether the agricultural land situated in a village near Ludhiana would be covered within the category of a capital asset. This fact has to be ascertained in accordance with the provisions contained in section 2(14) of the Act. In case the same is covered within the term ‘capital asset’, capital gain @ 20% plus applicable surcharge and cess will have to be paid on the capital gain arising on the sale of such agricultural land. In case such an agricultural land does not fall within the ambit of the term capital asset, no capital gains tax would be leviable on the capital gain arising on such a sale. n
The amount received on maturity of fixed deposit is not taxable. The TDS will have to be deducted from interest accrued on the fixed deposit in view of the total amount of interest accruing thereon being more than Rs10,000 a year. Since the estimated amount of interest earned would be more than the maximum amount on which the tax is not payable for financial year 2009-10 by an HUF (presuming that the land sold was a family property), it would be beneficial for you to get the tax deducted at source as this would go to reduce the amount of advance tax payable on the interest income so earned. n
The purchase of plot of land at Ludhiana after will also attract capital gains tax liability. It may be added that the reply in paragraphs two & three is based on the presumption that the question of capital gains tax arising on the sale of the agricultural tax has been settled in accordance with the position explained in paragraph one above. In the present economic situation it will be better to keep the money in a fixed deposit account with a nationalised bank.
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Stick to banking channels
Q. My father owns a plot in Noida and I work in Chandigarh. Due to current circumstances, it appears we require a house in Chandigarh. We would have to sell off the Noida plot to fund it. My father and I are both regular tax payers and do not believe in any illegal dealing. Talking to sellers here in Chandigarh, all of them demand around 60 per cent money in black, and probably we will have to sell in Noida the same way. Please guide us as what is the legal and most appropriate way to purchase property in Chandigarh after selling off the Noida house.
— Kulbhushan Sharma A. The most appropriate way to sell of property is to receive the entire conside-ration through banking channels to avoid any complication. Therefore, it will be advisable to tell the brokers at Noida that you are interested in selling your plot provided the entire consideration is received by an account payee bank draft drawn in favour of the owner. Similarly, the plot in Chandigarh should also be acquired on the similar basis i.e. making the entire payment towards the acquisition of the plot by an account payee bank draft.
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Deduct cost from sale amount
— Amit A. The answers to your queries are as under: n
On the basis of the facts given in the query, the seller had handed over the possession to you in the year 2001. Thus, the seller will be deemed to have transferred the shop to you in the said year.
He was, therefore, liable to pay income tax on any income arising on the transfer of the shop. Such income would be computed by deducting the cost from the sale consideration. In case the shop was a long-term capital asset (i.e. shop was held for more than three years) instead of cost, the indexed cost would be deductible from the sale consideration. The balance amount of income would be termed as “capital gain” and taxable under provisions of the Income-tax Act 1961 (the Act). n
As clarified hereinabove, the income from capital gains is to be computed by deducting the cost/indexed cost as the case may be from the sale consideration.
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30% rebate on rent income
— Resham Singh A. Section 24 of the Act deals with deductions allowable for computing taxable income from house property. In computing such income, a statutory deduction of 30 per cent of the annual value to cover repairs to the property is allowed. In your case, such deduction shall be admissible in respect of the let out portion of the property. Annual value will be computed by deducting the house tax paid pertaining to the let out portion from the rent receivable for the let out portion. The net income from house property after deducting 30 pr cent of annual value and other permissible deduction as specified in section 24 of the Act would thus be taxable under the provisions of the Act.
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Date of transfer matters
— Gursharan S. Sidhu A. Section 54F of the Act, which provides for exemption from taxability of capital gains in case of sale of a long term capital asset other than a residential house, requires that the net consideration realised on the transfer of a long-term capital asset be utilised in the construction of a residential house within a period of three years from the date of transfer of the capital asset. As is evident, the period is to be counted from the date of transfer of the long-term capital asset and, therefore, whether you sell your house in March 2009 or any other date, you would be entitled to a period of three years from the date of the transfer of the long term capital asset for construction of the residential house.
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Pest control
The mango mealy bug threatens plants and trees and is also known to overrun homes. Once identified, it is simple to contain, writes Satish Narula THE slogan ‘each one plant one’ is very relevant but it is more important to keep plants alive and healthy. This is possible only if we understand causes of anomalies in plant culture. And are you sure you are not causing more misery while protecting it? See the accompanying picture. I will explain it later but first the cause. One of the major strategies to control insect-pests is to understand their life cycle and break the rhythm somewhere in the middle. To understand it better, we take the example of the mango mealy bug, as it will also address the urgency of tackling this ‘slow poison’, the insect that appears now, during winter. I call it slow poison as the army of this insect feeds on the sap of the plant congregating at the growing tips to devitalise it, severely affecting fruiting and the vegetative growth. And do not be misled by the nomenclature — the mango mealy bug — as this insect is known to feed on more than 70 plant species. Even indoor ornamental plants are no exception. During the middle of December, the young ones of the insect emerge from the soil very near the plant base in millions. They are oriented to move up towards the tip of the growing point, reach there crawling and stick their mouth parts to feed on the sap. Some get disoriented and climb adjoining structures, the wall and poles. In residential areas, they may even come into houses and spread. At this stage, they are too small and slow to notice. Once I got a call from a senior judge’s house. They noticed some strange insect “only when it started raining from the ceiling on my breakfast table”, informed his wife. Not finding food on hard structures, they fell and perished. A large number of those that reach the top of the plant remain there till the middle of April and May and then – having grown from less than a millimetre to about a centimeter in size — start their downward journey. It has a waxy white to off white body and lakhs of them can be seen travelling down the main trunk. At that time, too, you can find them all over homes. Crushed under the feet, they leave a sustaining deep yellow stain that remains for a year or so. The she-insect cannot fly and crawls down whereas the much smaller male, red in colour, flies. It copulates with many females and then dies. The crawling down females enter the soil nearly six inches deep, lay eggs and die to let their young ones emerge and start the cycle again in winter. Both in the initial and adult stages, the insect is a menace especially in residential areas. One of the major sources of infestation is abandoned houses and vegetation from where they spread. Once it spreads in a premises, spraying trees and also spreading poison powder near the base of the tree is beneficial both at the emerging and entering phase. But you cannot go on spraying the whole house. One of the best ways I have found is to collect them with a broom from all over the premises — even vertical structures — and dispose them off. They cannot escape as they are slow movers. However, one of the most effective methods is the mechanical control at the time of emergence of the young ones in winter – right now. As the insect cannot fly and has to crawl up the tree, its passage has to be disrupted (see accompanying picture). The black band of grease is on Kanak Champa trees at the Oasis Resort near Karnal, while the polythene sheet method was devised by us at PAU for Chandigarh when this insect assumed epidemic proportions during 2001-02. Applying grease damages the tree as the bark starts splitting and cells die, putting the very existence of the tree in danger. It is aesthetically repulsive, too. In the PAU method, a 10-inch wide, 1,000-gauge polythene sheet band is applied nearly a metre from the ground, secured with three small shoe-nails where it overlaps. The lower edge is covered with wet mud to block the entry of insects from soil. The young ones are lead to cross the slippery band of polythene as they crawl up. They repeatedly do so, slip and fall down. After a few attempts, they get exhausted and die near the base of plant. You can find a thick band of dead insects near the base that increases with every passing day. You have; however, to follow this technique on a sustainable basis for a few years, as we did in Chandigarh. Last year, we found the insect nearly finished but there is no scope for complacence. We will do it again, now. (This column appears fortnightly)
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YOU can feel the Yuletide spirit flow in arcades flooded with Christmas decorations. But you haven’t taken the plunge yet. And the “raison d’être” behind the surge of reluctance is not really hard to fathom — the wave of terror from the sea has washed away the cheery mood for celebrations. Nothing wrong, you are simply flowing with the current. After all, the entire nation has fallen into grief; and you are no different.
Q. We purchased a shop in 2001 on GPA. A sale agreement was signed in which it is written that possession has been given and full payment has been received by the seller and no amount is due. Now, in 2008, we would like to do the registry at government-notified rate. Will the seller, who sold the property in 2001 and handed over possession and consideration, be liable to pay tax? If yes, why? This is only transfer of property and there is no income earned in this year.
Q. I constructed a house in Chandigarh in 1984. It is partly rented out and a major portion of it is self-occupied. I carried out some repairs in 2008. Is the amount spent on repair work exempt from tax? The repair was made from my own income. I understand section 24 allows deduction.
Q. I have a flat in Chandigarh, which I intend to sell and construct a house on the HUDA plot allotted to me. I think I should sell the flat after March 2009 so that I will gain one full year for constructing the house, as I have to construct it within three years of selling the flat. Am I right in thinking so? Please give me your opinion.