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Wings of hope, flight of dreams
THE global economic slowdown may have affected the real estate business in this region, but farmers of Anandpur and Khakat village near the Ludhiana Airport at Sahnewal are upbeat. Once domestic flights start from the airport, their land would virtually turn into a goldmine. The state government's announcement that the airport would soon be functional has sent out a wave of cheer among scores of farmers.
It is perhaps for the first time that a government move to acquire farmland has not disappointed its owners. They are, in fact, looking forward to the deal, their fingers crossed. "The government is yet to quote the rates of our land, but we have asked them to compensate us at market rate and not on collector's rate,'' said Jagtar Singh, a resident of Pawa village, who has a 1.5-acre piece in Anandpur village behind Sahnewal airport. “Whatever the price is decided, we will stand to gain. With the development of the airport, value of all land around is bound to go up,” he explains. Market price of an acre in and around Sahnewal hovers around Rs 70 lakh. “We have reason to believe that land adjoining the airport would fetch as mush as Rs 2 crore an acre. So, we will part with five acres and get the value of the rest of our land appreciated manifold," he said, lovingly looking at his land touching the airport boundary wall. Jagtar Singh and other farmers are excited. Buyers have begun making enquires after the government announcement. "We had never knew our land would also attract investors. They say there is a slowdown, but many have shown interest in buying our land," he added. Another farmer, Sheetal Singh said if the government connected the airport to the Ludhiana-Chandigarh road, dividends would spiral. Currently, the airport is approachable only from Ludhiana-Sanhewal Road. "The airport is barely two kilometers from the Chandigarh road. Officials had started measurements to acquire agricultural land. At that time, we were being offered Rs 1 crore for every acre. The plan, however, was shelved and now we have heard the airport would be connected to Ludhiana road only," said Sheetal Singh. Another farmer, Avtar Singh said his land was also adjoining the airport and is looking forward to the acquisition. "Once the flights start, our area would be even more developed than Ludhiana. Lot of commercial activity would also come to this rural belt. We are sure it will change our luck and are hoping activity starts as soon as possible," said Avtar. He added the farmers who owned land at a distance from the airport would be better off, as the authorities do not allow planting of trees and installation of chimneys in the vicinity of the airport. He said land prices would have skyrocketed after the announcement itself, only buyers were once bitten, twice shy. “Many investors bought land at Halwara and Laddowal when the government announced international airports, but both plans were shelved, resulting in big losses to buyers,” Avtar said. Learning from the past, investors are not buying land in Sahnewal area. Instead, they are just pinning their hopes on the SAD-BJP government. And not without reason. The international airport proposals for Halwara and Laddowal were dropped during the Congress regime and it was on their ouster that the SAD-BJP mooted the proposal for a domestic airport at
Sahnewal.
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TREND MILL
YOUR new house has risen from the debris of the old. Blank walls have surrendered to gables. Flat roofs have paved way from slanting tops. Even the front boundary wall wears a flamboyant coat of paint. But what's this: The gate still has the rickety, dull black frame?
Come on, fellows! You know that the entrance to your world should be nothing less than a pompous gateway to style. After all, an intricately designed and aesthetically appealing gate can open doors to endless possibilities, more than ever in a locality inhabited by Page 3 socialites. You see, the portal leads the visitor to his first impression and tells him so much about your microcosm even before he enters it. So folks, change that gate now for transforming your house's outlook and exterior decor. But before you place the order for the gate, just remember uniquely designed gates can lend a warm and welcoming ambience. So choose the gate designs with care.
What kind of gate should I go in for?
"Now that you are clear about your requirements, make sure the gate you order merges impeccably with the architecture, and the landscape, to bring out the building's beauty," suggests Delhi-based, inside-outside expert Nidhi Gupta. "Remember, it should speak volumes about your taste, but not in loud tones. The underlying principle is that the gate should add to the beauty, and not overpower it." Depending upon the structural design, the building plan and your budget, you can go in for an intricately carved ornate gate or a garden one. "If you live in Chandigarh and have a house with a gate traditionally crafted out of flat vertical or diagonal bars, you can glam it up by installing one of those translucent sheets," Gupta asserts. "The solution works wonder for all styles of customary and highly wrought gates."
Should I go for wrought iron?
UNTIL recently, overwhelming wrought iron gates standing tall outside your house were the obvious choice of the residents putting up in boomtowns of the region — Chandigarh, Ludhiana, Jalandhar and Amritsar included. High on style and artistic detail, you had them everywhere — outside your home, in the fence around the gardens and even in the backyard. But the gargantuan metal-sculpted black gates with golden or silver linings were different, yet so much the same. A combination of metals, they all had brass embellishments for that regal look. To top it up, the hinges, the handles and even the latches were elaborately designed. They allowed a peep into your style, while maintaining solitude and privacy, which comes with obscurity. "But gradually so many residents are now shutting doors to the concept of professionally and artistically crafted wrought iron gates," says Chandigarh-based furniture artist Puneeta Singh. "If you do not have one, stay away from the trap door and forget all about it. If your house flaunts one, add that plastic sheet to add freshness to the outgoing concept".
What is the latest in gates?
THE doors are wide open to wood. That's right, fellows. Timber is back. But the wooden doorways, fast coming in fashion, are so very different from the traditional timber fence gates. Not like the conventional gates you see in movies shot on the Swiss Alps, the frame nowadays is not made of wood, but cut out of metal or galvanized steel with enough scope to fasten smooth and polished wooden blocks to blend the customary with the contemporary. "It has its own unique charm," says Amritsar-based interior decorator Puja Singh. "It is not just graceful, but also classic and sturdy. The appeal lies in the fact that it is simple yet intricate". Before you find your way to the gate market, understand that the fundamental part of wooden doorway construction is proper support by posts. They are vital for absorbing the stress of constant movement and must be supported by a concrete base. "Two posts are enough," Puja Singh adds. "But if you decide to double the number of posts, you not only succeed in extending the entrance, but add to architectural character. The posts too can be shaped into artifacts. Beams or arbors across the columns are a departure from the common structures". Just in case you do not know, an arbor here connotes a framework across the channels that can support climbing plants. The gate arbors are essentially designed as extensions to your new or existing posts, columns, or walls. You can go in for four-post arbors or two-post arbors, depending upon the space. So fellows, just open the gate to the new option.
Take care…
GATES with abundance of wood can easily withstand for years the onslaught of weather. You simply need to ensure the blocks and the arbors remain polished and termite-free. Annual maintenance, involving a coat of polish and anti-termite treatment is not a bad idea.
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Realty loans
The revaluation exercise can help banks invoke a clause in the loan documents that states that if the property value falls below the loan disbursed, banks can ask borrowers to pay the difference upfront. A borrower unable to do so can be classified a defaulter. Banks have, however, not invoked the clause so far. In the last few months, residential rates have fallen by 20 to 30 per cent across the country. Despite Reserve Bank of India (RBI) and government orders, commercial banks are still reluctant to extend home loans and finance developers. The Real Estate Developers’ Association of India has taken up the matter with RBI and sought its intervention to prompt banks to reduce margins on home loans besides ensuring adequate credit flow to the housing segment.
Investment on hold
FRESH investment plans in the real estate segment plunged about 80 per cent between the first and third quarter of the current fiscal showing a slackness in demand in the housing and the commercial sectors. Loan growth to the housing sector decelerated slightly in the second quarter. Home loans grew at about 14 per cent or by about Rs 51,000 crore as of December. In the same period, previous year, housing loans grew 17 per cent by Rs 55,000 crore. The slowdown in the demand for the housing and commercial space was visible in the second quarter itself. But situation became worse for the period October to December.
Looking for a good deal
A LEADING online portal says that over the last two months, it had recorded a jump in visitors looking for houses in the mid price range. Almost 45 per cent of the enquiries that reached the portal were for this segment. Several leading portals have opened a new search section for affordable homes comprising properties with prices beginning at Rs 15 lakh. Major developers would now have to make changes in their product profiles to cater to this segment. Several buyers and investors, angered by the developer’s inability to start work on projects, have stopped payment of installments on their purchases and are asking for refunds, adding to the woes of builders. Most of the realty firms do not encourage refund requests. Investors can sell their property in the open market but where are the buyers?
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Winter Wonderland
Peach, pear & plum trees are no longer restricted to the hills. Just be sure you buy a sapling of the variety meant for the warmer plains. And, this is a good time, says Satish Narula NATURE is supreme. This is evident in the form of its furies, vagaries and unaddressed challenges. But, nature is kind, too: It has provided every living being with certain safety plugs.
Trees shed leaves and go dormant lest a growth or sprouting in unfavourable conditions spell doom. Biting winter or sweltering heat are the times this happens. The most common examples, the poplar, peach, plum, pear, grapes, mulberry, kiwi fruit, apple and almond, do so in winter and ber in summer. Such trees are called deciduous trees. Some of the above-mentioned trees — peach, plum and pear — are now common in high altitudes and plains. The difference between the two types is the variation in chill requirement. Let me put it up in an easy way — Nature has provided these trees with a temperature clock. These plants bear fruit only when exposed to a particular low temperature for a fixed time period. The difference lies in the duration and range of time and temperature. Hill fruits require lower temperature for a longer duration and the varieties for plains require comparatively higher temperature for lesser duration. This will clear doubts on why, at times, these trees although bear flowers aplenty, fail to bear fruits. This happens when you plant hill varieties in plains where the cooling requirement is not met. You come to know about it only when it is too late. It is, therefore, better to consult an expert before planting such plants. When you buy such plants from the government or agricultural university nurseries of respective areas, you need not worry. The varieties given will only be the ones recommended for that region. Let us talk about some varieties of such fruit for plains. This is the only time of the year when these are dormant and can be planted with bare roots, without carrying the earth ball. In peach, the main consideration is ripening of the fruit before the onset of monsoon. That is the time when the fruits get infested with the maggots of fruit-fly. For this reason, horticulturists of the region introduced very early ripening varieties. Planning to go in for a few peaches in your garden or even for commercial purpose? Go in for Partap, Parbhat, EatrliGrande and Shan-i-Punjab. These varieties begin ripening from the third week of April till the second week of May, usually a rain-free period. The fruit-fly appears with the first shower. Plum is another tree favourite with gardeners, ikebana freaks and commercial growers. Its tiny white flowers appear in bunches completely covering the whole tree. At that time, there is no leaf on the tree. It is because of this reason that it is catching the fancy of landscapists, too, who like to plant them in the middle of greens, on artificial mounds or hillocks, especially near water bodies. Satluj Purple and Kala Amritsari are the cultivars that are planted side by side for the reason of pollination. The bearing in peach and plum starts three to four years after planting. Pear is also liked for similar reasons. The bearing, however, takes place after about six years of planting. The varieties suitable for this region are Punjab Nectar, Punjab Beauty and Punjab Gold, the soft and semi-soft pears and Punjab Nakh as sand pear, the one with grit. (This column appears fortnightly) The writer is a senior horticulturist and can be contacted at satishnarula@yahoo.co.in
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Tax tips
Q. My father bought a house in 1977 for Rs 1.5 lakh and after his death in 2003, it was transferred in my name according to the will. The house will be sold in February 2009 for Rs 34
lakh.
What will be the index cost price of the house? What will my tax liability be? Kindly suggest ways to save tax. — Rohit Mehra A. The issue raised by you is debatable. In case a literal interpretation of the provisions of explanation (iii) to section 48 of the Income-tax Act 1961 (the Act) is taken, the benefit of indexation should be allowable from the first year in which the capital asset was held by you. On that basis, if it is presumed that the transfer in your favour took place in 2003, the indexed cost for the year 2008-09 would work out at Rs 1,88,553. However, recently, Kolkata Bench of Income-tax Appellate Tribunal has held that in case of a capital asset acquired prior to April 1, 1981, the fair market value as on April 1, 1981 should be adopted for indexation. If it is presumed that the fair market value of the house as on April 1, 1981 was Rs 1.5 lakh, the indexed cost for the year 2008-09 would work out to Rs 8.73 lakh. The tax liability would also depend on the adoption of any of these two alternatives. I may add that the applicable rate of tax on a long term capital gain is @ 20 per cent, plus applicable surcharge and education cess. The best option available for saving the capital gains tax would be to purchase the tax saving bonds for the amount of capital gain realised on the sale of residential house. Such bonds will have to be purchased within six months of the date of sale of the house. The capital gain can also be utilised for buying or constructing a residential house within the specified period. This will also obviate the necessity of paying any capital gains tax on the capital gain arising on the sale of residential house.
Everything possible, there’s a time limit
Can the amount of capital gain be saved by investing in any type of bonds and is exemption by investing in bonds available to
NRIs? Can NRIs buy property in India? — Neeraj Kumar A. The capital gain arising on the transfer of the plot shall be a long-term capital gain. On the basis of cost inflation index prevailing for the year 2008-09, this would work out at Rs 17,82,046 (24,00,000--6,17,954). Your friend, even though a NRI, can invest the above capital gain in the acquisition of tax saving bonds within a period of six months of the date of transfer of the plot. If the bonds are purchased within the above time schedule, your friend would not be liable to pay any capital gains tax. Your friend can also buy a residential house in India within a period of two years of the date of transfer of the plot or construct a residential house within a period of three years of the date of transfer of the plot. The net consideration i.e. the amount realised on the transfer of sale less any expenditure incurred wholly and necessarily in connection with such sale will have to be utilised for the purchase/construction of the residential house within the aforesaid time limit so as to save the capital gains tax.
You can’t claim deduction
Q. I am living with my parents in a house constructed by borrowing money from the State Bank of India. The house is in the name of my father and he obtained the loan but I am repaying the loan installments. Can I claim deduction of installments paid towards the repayment of principal amount as deduction against my income as I am placed in a higher taxable limit as compared to my father? — V.K. Manchanda A. Section 80C of the Act deals with deduction of principal paid towards repayment of loan borrowed for the purposes of acquisition or construction of a house. The said section provides that in computing the total income of an assessee being an individual, there shall be deducted an amount paid in the previous year towards the repayment of loan borrowed from a bank for the purposes of purchase or construction of a residential house property, the income from which is chargeable to tax under the head ‘income from house property’ or which would if it had not been used for the assessee’s own residence, would have been chargeable to tax under that head. The aforesaid section, therefore, permits such deduction to be allowed to an assessee which in this case would be your father. You would, thus, not be entitled to claim such deduction.
Yes, upper limit Rs 1.5 lakh
Q. I had taken a loan for the construction of a residential house. I have been claiming the interest paid for the loan so borrowed as deduction against the rental income from the aforesaid house. I also intend to construct the first floor of a residential house I own at my native place, which is a self-occupied property. Am I entitled to deduction of interest if I borrow additional amount for construction of the first floor of my self-occupied property? — K.K. Suri A. You would be entitled to claim a deduction in respect of the interest paid or payable on the amount borrowed for the construction of additional floor of the self-occupied property. The maximum deduction allowable for such interest is Rs 1.50 lakh, provided the construction is completed within three years from the end of the financial year in which the amount is borrowed.
Invest one-third share of capital gain
— Kiran Roopra A. I assume that each one of you is owner of the residential house to the extent of one-third share. In that case, each one of you can invest one-third share of capital gain arising on the sale of the residential house jointly owned by three of you in the acquisition of three separate residential houses in the name of each one of the co-owners.
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AT the threshold, ask yourself a few questions. Do you need a gate that screens your house from prying neighbour staying in the house bang opposite? Can you achieve the objective by simply modifying the existing gate, or do you need to buy a new one? Is the space around the gate area limited? Do you need a single or a double gate? Should it swing or slide? 
BANKS have started reassessing the value of properties against which loans have been granted out of fear of rising non-performing assets. Bankers are worried that the fall in real estate prices could impact their risk valuation, if asset prices continue to fall. Housing loan outstanding as on December 2008 amounted to Rs 2.78 crore and constituted 11 per cent of all bank loan outstandings.
While human beings are blessed with the prowess of thinking and making provisions for their safety, insects camouflage themselves when faced with the enemy and other small animals hibernate in extreme weather. Plants and seeds have their own safety mechanism — the dormancy. New seeds, when shed in nature and put face to face with unfavourable weather conditions, ‘sleep’ to wake up and sprout only when conditions get favourable.
Q. My friend, who presently lives in Canada, sold a plot he purchased in 1994 for Rs 2.75 lakh in the August of 2008 for Rs 24lakh. Please advise me regarding the nature and amount of capital gain.
Q. I refer to the query by Ms Kanta Devi printed on December 27, 2008. We had exactly the same scenario — upon my father’s death our house was transferred in the name of my mum, my brother and I. Recently, we sold that house and we are planning to re-invest the sale proceeds in the acquisition of three properties save for a small amount of money. We were intending to register these three new properties in the name of our mother, as my brother and I are settled abroad. But your answer to Ms Devi implied that if we register the new properties only in the name of our mother; my brother and I could be liable to pay CGT. Is that correct? Please advise on the way forward.