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RBI shocker for easy-payment plans
area watch: baghpat
real view: impact of ban on sand mining from river beds
realty bites
launch pad
decor trends Ground Realty
pick of the week
tax tips
loan zone
vaastu wisdom
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RBI shocker for
easy-payment plans
All those prospective home buyers who were checking out the attractive subvention schemes being offered by developers over the past few months and were gathering courage to finalise a deal by paying just 20 or 25 per cent of the cost in the beginning and the rest 80 or 75 per cent at the time of taking possession of their home three to four years later, have been forced to retreat once again into their ‘cocoon of caution’. The reason is the RBI’s recent notification to banks to link disbursal of home loans with stages of construction. The target Slowdown in the sector due to the absence of investors and the increasing inventory overhang had made several developers offer attractive and innovative payment plans. Through these schemes, backed by banks, the builders generally offered to pay the interest component of a housing loan sanctioned to a buyer till the time the possession was handed over. The buyer, thus, was required to pay just 20 or 25 per cent of the total cost to book an apartment and didn’t have to grapple with the burden of an EMI on the home loan taken from a bank. The banks made upfront disbursal of loan amount to the builders and this was not linked to the different stages of construction of a project. RBI justified its advisory by maintaining that such home loan products were likely to expose banks and borrowers to additional risks. While the buyers who have already availed of these schemes are in a quandary because of the confusion over the fate of their funding plans, the builders are also at sea. For builders these payment options served the dual purpose of boosting the sales as well as ensuring a steady flow of funds and that too at a lower rate of interest (as home loan interest rates are much lower). Markets,too, reacted sharply to this news as the shares of real estate firms fell by up to 8 per cent soon after the announcement earlier this week. The stocks of Sobha Developers (7.93 per cent), DLF (5 per cent), Unitech (2.46 per cent), D B Realty (1.71 per cent) and Godrej Properties (1.57 per cent) took an immediate hit and the BSE realty index was the top loser for the day. Positive take However, the reactions to this move from different stakeholders have been mixed. Calling it a step towards greater transparency Jones Lang LaSalle Managing Director-Capital Markets, Shobhit Agarwal, said, “This move is aimed at protecting the interest of property buyers who are not aware of the long-term financial implications of such and similar schemes. It is definitely meant to advance the cause of greater transparency in the Indian real estate sector, and also to protect the financial institutions that provide funding in it.” National Real Estate Developers’ Council Vice-president Sunil Mantri, said, “This move aims at protecting the interest of consumers, banks and developers simultaneously in the long run. It will also reduce the risk of customers and banks as money won’t get diverted to other projects. So, the ongoing project will not be affected.” Pradeep Jain, Chairman , Parsvnath Group, also welcomed the notification by saying, “It will help streamline the sector and will curb delayed deliveries of projects. This will also restrict developers from diverting the 80 per cent of loan amount to other project. The developer will have to maintain timeline for construction in order to get the next instalment from bank. Now buyers can also easily avail mortgage loans on construction-linked plans. On the other hand, it will help banks reduce their Non-Performing Assets burden. Overall, it is a welcome step and will boost market
sentiment.”
And also brickbats A number of experts and developers on the other hand have criticised this notification. CBRE South Asia Chairman and MD, Anshuman Magazine, however, called it a regressive step that would hurt buyer sentiment in the market. “The RBI’s decision will adversely affect the sale of projects where such schemes were prevalent. No doubt banks should do their due diligence and assess risks before agreeing to fund these schemes. However they should be allowed the flexibility of such schemes which encourages more people to own homes.” Calling it a counter- productive move R K Arora, CMD, Supertech Limited says, “It would push the entire real estate industry into an unprecedented financial crisis. The customer for whose interest the decision is aimed at, is going to be the greatest sufferer as the only source of funds so far available to the developer, is sought to be denied which would leave many real estate projects in the lurch. Debarring upfront loans have made the situation adverse to the cash-strapped real estate sector which is already facing adequate liquidity problem.” “RBI’s move is discouraging for buyers and developers specially for those projects which are in phase of completion and offering possession in coming 10-14 months”, Vijay Kumar Jindal, CMD- SVP Group said. RBI also got flak for creating confusion by issuing such mid-way policy changes. CREDAI chairman Lalit Kumar Jain said, “Abruptly issuing such circulars, advising bank against established practices only harm the sentiment and disrupts business plans. This will create setback for projects, affecting the end consumers.” “The coming of this decision at a time when already high home interest rates and increased property prices due to high cost of raw materials, has further added to the woes of the customers. It was a path to own a dream home with the minimum investment for the buyers which too has been doomed now”, Arora added. Intensity of impact With less than 10 per cent of projects having such offers and just a handful of banks offering these schemes, the intensity of the impact of this notification may not be much. “As it is just an advisory banks are not bound to follow it to the T, so the discretion of clearing loans to buyers of a particular project or builder still remains with the banks. Therefore, such payment plans are not going to be completely scrapped”, says a senior official of a major nationalised bank. According to Anil Kumar Sharma, President, CREDAI-NCR, “This will have negligible impact on the existing projects as banks have already barred giving home loans on such types of down payment schemes for the past couple of years”. “It is early days yet to comment on the exact impact of this move. However, it will certainly hit sale volumes in major cities as these schemes are being offered in several projects there due to huge inventory overhang there”, says Anshuman Magazine. The current economic scenario, rising cost of construction material and liquidity crunch are already crippling the realty sector and with this move the buyer sentiment is certainly not going to be upbeat. What it says * In view of the higher risks associated with such lump-sum disbursal of sanctioned housing loans and customer suitability issues, banks are advised that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project/houses. *
Upfront disbursal should not be made in cases of incomplete/under-construction/green field housing projects..
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area watch: baghpat
In spite of the overall slowdown and tepid market sentiment, NCR properties have not lost their Midas touch. However as we take stock of different NCR towns it becomes obvious that development has occurred only in selected areas such as Gurgaon, Ghaziabad and Noida. Other towns like Hapur, Meerut, Bulandshahr and Baghpat have a lot of catching up to do. Unfortunately enough, the lack of coordination between states and poor enforcement of rules has made integration within the NCR cities a pipe dream. Once known as the citadel of Jat leader Chaudhary Charan Singh, Baghpat, which is a part of NCR, has not yet seen much movement on the real estate front. Experts opine that this town would see a healthy growth soon because of factors like proximity to Delhi and the availability of land. It is not more than 35 km from the Shahadara Metro Station and is on the Delhi-Saharanpur National Highway. If you are driving your own vehicle, then you can reach Baghpat within 45 minutes from ISBT in capital. Even during rush hours you would not take more than one hour to be there. Haryana also only 15 km from Baghpat and the proposed Eastern Peripheral (Kundli, Ghaziabad, Palwal) also connects Baghpat to Delhi via Haryana. Moreover, there is enough land available here to be developed. Given the fact that land is not easily available and that too on cheap rates in Noida, Gurgaon, Greater Noida or for that matter in any other NCR city situated, Baghpat is sure to come up as a major NCR city. However, unfortunately Baghpat has never got its due from the policy makers even though it was included in the NCR club way back in 1997. “Baghpat is strategically located in the sense that it is close to both Delhi and Sonepat. It has a huge potential to make a mark provided the Delhi and state governments make sincere efforts in this regard,” says Kokab Hamid, a former MLA of Baghpat. He, however, agrees that no government has done enough to make the town an attractive option for developers or the home buyers. As property prices in Delhi, Gurgaon, Noida and Greater Noida are touching the sky, Baghpat is virtually the only option left to own a home at very affordable price. Due to its location Bhagpat can be an excellent option for those working in East or North Delhi and wanting to own a home of their own. “India’s first Signature Bridge at Wazirabad will go a long way in easy connectivity between the national capital and Baghpat. So, things are coming up here,” says Sanjay Khanna, director of Kailash Nath projects. The group is keen on starting residential projects in this town. Though the property market here is stagnant at the moment and not many projects are lined
up, “If ever we decide to launch something in Baghpat we may bring in plotted development, villas or low-rise units”, says Nuzhat Alim, director of ILD Developers. While Mahavir Hanuman Group has ready completed one residential project in collaboration with National Building Construction Corporation (NBCC) with 10,000 residential apartments spread over 100 acres, experts believe that other realty players will follow suit sooner rather than later. “I feel that Baghpat will see better times only after Gurgaon and Sohna in Haryana or Indirapuram and Crossings Republik in Ghaziabad have realised their full potential. We will explore options in the new districts only when some infrastructure work has been done, resources are in place and there is progress on ground. I do not see immediate opportunity in the area.,” says Nikhil Jain, CEO of Ramprastha group. “I feel that with better connectivity and infrastructure, Baghpat will attract realty companies in a big way. I only hope that realty companies will think of making affordable homes rather than luxury ones. This town can be an ideal destination for those looking for an affordable home and there is sufficient demand in this segment to give a boost to the realty market here”, says Devinder Gupta, managing director of Century 21. An official of the NCR Planning Board (NCRPB) agrees, “In order to give the necessary fillip to any place, infrastructure facilities such as transport, power, communication, drinking water, sewerage and drainage are key. While one should not expect magic, one can only hope that all the stake-holders will provide such facilities in Baghpat in order to make it at par with other booming NCR towns. While all the districts under the NCR have access to concessional funding, it has been seen that till March 2013, of the ~18,994 crore disbursed by NCRPB, 72 per cent has been availed by Haryana and only 11% by UP. The board offers loans for infrastructure at 7.25% interest with a 0.25% rebate for prompt repayment. It is clear that UP districts have to pull-up their socks in order to stay in the race with other NCR areas in terms of development. It is high time that those concerned wake-up to these challenges.
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real view: impact of ban on sand mining from river beds
This announcement is likely to encourage illegal sand mining even further. When the Maharashtra government had announced the ban on sand mining in 2010, the prices of sand had risen by four times, hitting the government's revenues. Traditionally, sand is used in the finishing process of construction of a building. Considering that sand prices are increasing at the rate of 25 per cent annually for the past three years, the challenges are likely to increase even further. Let's look at some of them in detail. Challenges *
Use of sand can only be minimized: Sand is used in the finishing process of construction. All traditional construction requires sand and the use can only be minimised but not scrapped altogether. *
Illegal sand mining to increase: Currently, illegal sand mining that is prevalent in parts of Uttar Pradesh, Uttarakhand and Madhya Pradesh will now increase further and expand to other states too. *
Rise in construction costs: The biggest hit will be to the construction costs for the developer as the existing prices of sand will increase because the developer will have to pay more royalty to the government. *
Negative impact on buyers: In the short term, the cost of construction is expected to go up while in the long-term, this only spells more political extortion as it will only lead to rise in project costs. The buyer might end up bearing the brunt of this announcement in the form of project delays and increased project prices. Solution *
Alternatives: Although the use of sand can only be minimised and not stopped altogether, alternatives to sand can be crushed aggregate and thin bed mortars instead of 10mm mortar. *
Use of coarse sand: Out of total use in construction, hardly 2-4 per cent fine sand has been used by the developers and technically the sand is only used in plaster which can be replaced by coarse sand. *
Collaborative work: Member of Industries and environment industry should work together for a feasible solution rather than put all the pressure on the developers. The writer is Business Head, 99acres.com
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realty bites
London-based boutique property investment consultancy firm ‘Seer Acquisitions’ unveiled its India Operation with “Seer Realty” in Delhi recently. The official launch was chaired by Hamilton Butcher, General Manager - Middle East, Seer Acquisitions; Barry Lowen, Director UK Trade and Investment at the British High Commission; and Imtiaz Panjwani, Chairman-Seer Realty, India. Speaking on the occasion Butcher said there was a huge potential to provide a clear and transparent service to not only Indian investors living in India who want to invest in the UK real estate market, but also to provide a service to the NRIs based in UK who want to invest back into India. “Our focus at this present time is student accommodation in the UK which over the past few years has comfortably out performed every other real estate asset in its class”, he added. The student accommodation market is maturing as universities and colleges look to the private sector to fulfill their accommodation needs. Subsequently the sector has seen the rise of the purpose built quality residences to meet the glut in supply moving away from the stereotype of below par terraced housing and tired 1970s blocks. Seer Realty will be the first of its kind global facilitator in India to introduce Boutique Residencies — studio apartments for students in abroad at an affordable price bracket.
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launch pad
KUL Couture Mumbai-Pune- based developer, Kumar Urban Development Ltd (KUL) has announced the launch of their high-end, luxury residential project based on anthropological engineering. Located at Worli in Central Mumbai, this 400 ft high-rise tower called KUL Couture is designed to have just 40 exclusive units, with two flats per floor. Anthropological Engineering involves the study of human behaviour as a science. Anthropologically engineered homes offer special features such as earth energy advantage, sun path application, character building amenities like gardens, yoga auditorium, gymnasium, etc. KUL Couture offers the high standard of luxury living in 3BHK flats,4BHK flats and ample parking space for residents and visitors.
Mixed-use project in Gurgaon Paras Buildtech recently launched 'Paras Square project in Sector 63A, Gurgaon. This project is a mix of studio apartments, besides retail and commercial areas. Spread over an area of 2.2 acre, the ground and first floors of the project will be dedicated to retail and second to Fourteenth floors for fully furnished Studio Apartments, making it one-of-its-kind in Delhi-NCR. The project is located adjacent to the Golf Course Extension Road The size of the retail spaces will range between 310 sq. ft. to 1000 sq. ft . The studio apartments consist of two sizes 870 Sq ft and 1225 Sq ft. The fully furnished studio apartments will be equipped with double-bed, sofa, centre- table, curtain drapes, wardrobe, air-conditioner, kitchen-cabinet, microwave, refrigerator, HOB, chimney and LCD TV etc.
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Lively lights Rajan Vashisht Crystal chandeliers have been embellishing palaces and mansions since ages but now they are no longer limited to royalty. Thanks to the growing popularity and affordability of these beautiful pieces, they are adorning modern homes. These lighting fixtures not only serve the purpose of illuminating a specific area but also add elegance to any kind of interior decoration. Most home owners are conscious about the interior décor, since it reflects their taste as well as personality. However, it is important to analyse the requirements of the particular space prior to picking a light fixture. Start by choosing a look that will compliment not only the space but the house as a whole. The key for incorporating a chandelier to the interiors is to find a piece that suits the size and architectural style of the home. In fact size also plays an important role in illuminating a home. A huge chandelier in a small space will end up looking odd and out of place. However, when placed in a massive hallway the same fixture will add elegance. As a result carefully analyse the space available for making the most of a light piece. The height of the ceiling should also be taken into consideration while choosing a chandelier. If the room has a high ceiling, choose a dangling chandelier, whereas for lower one, pick a chandelier closer to the ceiling. Most importantly keep in mind whether these are ornate or simple. Chandeliers need a dimmer so that the intensity of light can be controlled. Bedroom chandelier lighting has taken a popular fixture from dining rooms and entryways and moved it into the sleeping quarters. The style has gained popularity in recent years as homeowners turn their bedrooms into luxurious suites. But chandeliers should not be restricted to the master bedroom, children's or guestroom. Since they come in such a wide variety of styles, experiment with chandeliers beyond the usual space. Hang a streamlined, contemporary style chandelier above the island of kitchen or add a mini chandelier to the bathroom for a more sophisticated look. Subsequent to determining the size of chandelier, focus on the predominant colour or material of the space. Also ask yourself what type of statement you would want to make with the light fixture. For a more traditional look, choose a chandelier with more ornamentation or decorative details. If the room's look is more modern, a fixture with simple lines and fewer details can be a stunning. Variety fair Chandeliers come in a variety of styles, from the ornate ones to glamorous options like pendant lights. Formal brass and antique chandeliers suit the ethnic décor perfectly. The two most common varieties in chandeliers are crystal and beaded chandeliers. They provide the most classic feel and also look marvelous in a living room. For bedrooms, single-toned drum or dome-shaped chandeliers are perfect whereas for smaller spaces like kids rooms or powder rooms, a miniature or decorative chandelier is the best suited. For larger spaces like dining rooms or living rooms, try modern or traditional chandeliers that make a dramatic impact to the decor. These days chandeliers have also sized up to accommodate the soaring foyers and sweeping two-story spaces of larger homes. So, get ready to add a royal touch to your homes and make every day special with beautiful chandeliers.
The writer is working for Emaar
MGF.
Mixing of materials and styles within one fixture is now a common design trend. It is not unusual to find a rustic cast-iron fixture with crystals hanging from it, or different metals and types of glass all incorporated into one fixture. Chandeliers no longer feature just one metal or just one finish. The latest looks offer multi-tone finishes created by painted or chemical processes. While sparkling clear crystal refracts and reflects light, chandeliers are now also available in a rainbow of shades to complement decor. Coloured crystal can combine with clear to create a prism of hue. Smokey quartz, rock crystal and amethyst offer an antique feel. A trend towards smaller and mini-chandeliers makes it possible to incorporate these fixtures into smaller rooms or areas in the home. These compact chandeliers are nine-12 inches in diameter and slip easily into tight spaces. For added impact, consider grouping them. At some places, mini-chandeliers are being grouped together, while at others these are being treated as sconces. “Chandelettes”, or mini-chandeliers, add a distinct sense of intimacy to small rooms and to corner spaces.
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Avoid painting pangs Jagvir Goyal Choose the painting work gang: If the house builder is able to choose a good painting work gang, he has won the battle. The skill and experience of the work gang is the secret behind the beautiful, marble like finish of walls. One must not compromise here or be too conservative as a good painting gang, may charge more but can save a lot of money by making judicious use of paints and preparation work materials. One must visit a few houses finished by the painters to assess the quality of work. Not only this, the painters should be interviewed by the architect or some expert engineer to know the wall preparation methodology to be adopted. Selecting the supplier:
Painters take a long time in finishing the paint work. A 5 to 6 months time is normal for them. During this period, they will be continuously demanding different kinds of paint materials. It won't be possible for you to go to the market and buy these items everyday. So look for a good hardware and paint store, known for its integrity and rate reasonableness. Talk to the supplier about sending the materials as and when ordered by you on phone from time to time. However, during the supply of materials, keep a check on the rates applied by the paint shop. Often, the materials are supplied at a good discount initially and once the confidence of the house owner is won, the rates are jacked up by the supplier under the pretext of an increase by the company. Brands watch: Choose the paint material brands carefully. One or two brands are ruling the market but other brands of equally good or even better quality may be available at much lesser cost. The painting work materials can be divided into four categories - preparation work materials, internal finish materials, external finish materials and polish work materials. My personal experience tells that the best material under each category belongs to a different brand. So don't go after the companies indulging in excessive marketing or advertisement but look for really good and durable materials after seeking expert guidance. Perfect timing: Check if the time has really arrived for the painting work to begin. See that all the door and window frames have been installed in position. See that all the door and window shutters have been fabricated by the carpenter. These are to be installed in position after being painted or polished but before final coat application. See that all the electrical conduits, their boxes and fixtures have been embedded in walls and the walls have been finished smooth. See that any plaster finishing required over and along the conduits has been completed. See that all plumbing and sanitary pipelines have been embedded in walls, their chase cuttings filled and finished. Also see that drain pipes for split ACs have been embedded in the walls and made leak proof. See that POP work and false ceiling work has also been completed by the respective gang. For external painting work, avoid monsoon season as rains often interrupt the external painting work. Choose the sand paper: Right use of sand paper on the walls and the woodwork plays a vital role in the final finish and smoothness of walls and door and window shutters. Painters will ask for sand paper of different numbers from time to time. These include 80, 120, 180, 220 and 320 number sand papers prominently. Higher is the sand paper number, the finer and costlier it is. Some sand papers are supplied in rolls while others are supplied in A4 sizes. Sand paper cost varies from Rs 30 per metre to Rs 80 per metre. One should look for good quality sand paper which is available in imported variety only. Application of sandpaper is an endless and most patient job and a good painter knows it. The gleam, the shine, the smoothness are all a result of endless application of sandpaper but in a methodical manner. An imperfect application will eat into the wall or the wood. Choose the feature wall: The rooms like nice and decorated when one wall of each room is chosen as the feature wall and is given special treatment. Generally, the wall at the back of double bed in the bed rooms is chosen as the feature wall. This wall is provided with texture paints or wall paper while the other walls have a matching or contrast colour decided carefully in consultation with the architect who can show how the combination will look like, on his PC. There is immense choice available in wall papers and some having 3D effect add mesmerising effect to the rooms. Keep a record: You can be in control of things if you keep a record of the materials bought and used. There are scores of materials to be purchased including plastic emulsions, sealers, hardners, thinners, exterior paints, enamels, polish, sand papers, putty, POP, chalk mitti, fevicol, kerosene oil, metallic paints, primers, brushes, rollers, tape rolls and so on. If you keep a date wise record
of their demand and arrival, a check on wastage, consumption and increase in rates can be easily maintained besides having a smug feeling of having a total control over the painting work. Follow the tips, go ahead and colour the walls of your dream house!
Choose the colour scheme of your house carefully. Some people prefer a uniform off-white colour for whole of the house while others may go for different colours in different rooms and areas. Whatever be the choice, in India, one should look for pastel colours as dark shades don't look soothing to the eyes during summers.
This column is published fortnightly
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pick of the week
The price range of Pergo Total Design (AC4) Barcodes Black silver and Barcodes white silver is
Rs 250 sq. ft. Flooring solutions company Square Foot has launched a range of laminate flooring — Church. Inspired by the old colonial floors, this range of laminate flooring comes with chiselled edges along with different styles and finishes. The flooring comes with a lot of details which gives this laminate flooring a similar look that can be achieved by a reclaimed hardwood floor. Price:
Rs 180 per sq ft onwards
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Is land acquisition compensation exempt from tax? S. C. Vasudeva email your queries to realestate@tribunemail.com ...
A. Capital gain on compulsory acquisition of urban agriculture land is exempt if the following conditions are satisfied: *
The assessee is an individual or a Hindu undivided family. * He or it owns an agriculture land situated in urban area mentioned in Section 2(14)(iii)(a)(b) of the Act. *
There is transfer of the agriculture land by way of compulsory acquisition under any law, the consideration for which is determined or approved by the Central Government or Reserve Bank of India. *
The agriculture land was used by the assessee (and/or his parents if the land was owned by an individual) for agricultural purposes during two years immediately preceding the date of transfer. *
The asset may be long-term capital asset or a short-term capital asset. *
Capital gain arises from compensation (and/or additional compensation) or consideration which is received by the assessee after March 31, 2004. In case you satisfy the above conditions, the capital gain arising on the acquisition of your agricultural land would be exempt from tax.
Q. I sold my house in Gurgaon and purchased another house in Faridabad immediately. The house sold by me was a long-term capital asset and, therefore, I was able to claim the exemption from the taxability of long-term capital gains arising on such sale. I intend to sell the new house too. What would be the position in respect of the exemption of capital gains claimed earlier? —
Ashwin
A. If a new residential house is transferred within a period of three years of the date of its purchase or construction, the amount of exemption allowed earlier would be withdrawn. In case capital gain is equivalent to the cost of new residential house, the cost of new residential house would be taken as nil for the purpose of computing the amount of capital gain arising on the sale of new residential house within the period of three years. In case the amount of capital gain in respect of which exemption had been claimed and allowed is less than the cost of new residential house, the cost of the new residential house which is being sold shall be reduced by the amount of exempted capital gain. It can be explained as under by taking into account hypothical figures. The capital gain arising on such a sale being a short-term capital gain would be aggregated with your other income and taxed at normal slab rates.
Q. I own three houses at present. Kindly clarify the following points: a) If I sell one of houses and then purchase a new house by utilising LTCG so earned, will it be tax free under Section 54? b) Does the term residential property in Section 54 applies to residential house only and not to a residential plot. c) In which cases the rate of 10 per cent tax on the total sale proceeds without indexation applies. —
Vijay
A. Your queries are replied hereunder: * In case a residential house is transferred and capital gain arising on the transfer of such a residential house is utilised for the purchase or construction of a new residential house within the specified period, such capital gain will not be assessable to income-tax. *
The term 'residential house' used in Section 54 of the Income-Tax Act, 1961 (The Act) does not refer the purchase of residential plot. However, in case the same has been purchased with an intention to construct a residential house within the specified period, it would be possible to claim exemption under Section 54 of the Act in respect of the capital gain which has arisen by virtue of transfer of the residential house. This would be subject to a condition that in case the entire amount of capital gain is not utilised for the construction of a residential house before the due date of filing the return of the income in respect of previous year in which capital gain arose, the unutilised amount shall be deposited with a bank under capital gain scheme. The amount so deposited is required to be utilised for the construction of a residential house. *
A proviso to Section 112 of the Act (which deals with the rate of tax applicable to short-term and long-term capital gains) provides that where the tax payable in respect of capital gain arising on the transfer of a long-term capital asset such as listed securities, units or zero coupon bonds exceeds 10 per cent of the amount of capital gain before giving effect to the provisions of second proviso to Section 48 of the Act, then such excess shall be ignored for the purpose of computing the tax payable by the assessee on such a gain. In other words, tax rate of 10 per cent would be applicable to long-term capital gain arising on sale of securities referred to hereinabove and where such gain exceeds 10 per cent of the amount of capital gain which is computed without giving effect to cost inflation index, then such excess shall be ignored.
Q. I have bought a flat in Gurgaon and it is still under construction. I took a loan of Rs 25 lakh and started paying the interest through EMIs immediately. Till date, I would repaid around Rs 10 lakh. Will this be tax exempt this year? —
Vinod Kumar A. As per the provisions of Section 24 of the Act interest attributable to the period before the completion of construction is aggregated and allowed in five successive fiscal years, starting from the year in which the acquisition/construction has been completed. Since the flat that you have bought is still under construction, the amount of entire interest paid/payable for the construction period to the bank cannot be claimed as deduction in financial year in which flat is completed and handed over to you. Interest paid/payable would be allowed to be deducted in five equal instalments starting from the year in which the flat is completed. If case EMI payment included a portion of the principal amount, the said amount can be claimed as a deduction under section 80C of the Act as and when the possession of the flat is handed over to you.
Q. I am an NRI. After my father’s death, his property was divided equally between me and my sister. Now I want to sell my share. How would it be taxed and how can I get this money from India? —
Amit
A. When you sell your share of the property, you would have to pay capital gains tax. I assume that your father held the property for more than three years and, therefore, such gains would be considered long-term capital gain, which is computed by reducing the aggregate amount of the indexed cost of acquisition and the expenses necessarily incurred during the sale of the property from the sale consideration of the property. The excess amount is the capital gain on which you have to pay tax. At present, the long-term capital gain is taxable @ 20 per cent plus education cess of 3 per cent thereon. Once the tax has been paid on the capital gain arising on the sale of the property, you can approach your bank for remitting the net amount to your bank account outside India. You will need a certificate from a chartered accountant for this purpose.
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Is it difficult to get loan for a resale property? S.C. Dhall ...
A. You can get a home loan to buy a resale property. But the age and valuation of the building will have a bearing on loan eligibility. Certain banks have restrictions based on the age of the property when the loan matures. Most banks give a maximum of 80 per cent of the property value as home loan. Also, banks get the property valued independently and the loan amount is based on this value. Often, the valuation as determined by the bank is significantly lower than the actual cost and, so, your effective down payment goes up. Should I use my savings or go in for a home loan? Q. I bought a flat for ~20 lakh recently. I have paid ~8 lakh from my savings. I have a fixed deposit of ~10 lakh that will mature in September, 2013. Should I use this money or go in for a home loan to pay the remaining amount on the flat? I earn about RS10.5 lakh annually. — KaramChand A. You can consider both options based on how much each of these will cost you in the long term.
Calculate the post-tax interest earned on your fixed deposit (FD) and post-tax cost on the home loan. Assuming you are in the 20 per cent tax bracket (based on the income mentioned) and the interest rate on FD to be 9.5 per cent, net post-tax yield is 7.6 per cent. Compare this with the cost of availing a home loan and the tax benefit on it. The net cost of borrowing might be lesser than the FD rate. If this is so, then it is better to take a home loan.
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Direction of WC madan gupta spatu
A. A school of thought opines that the direction that toilet faces has no relevance at all and it is only the positioning of the toilet seat in a particular direction as per vaastu that creates a certain effect. In this regard, toilet seats from south to north or west to east are approved. Toilets should to be in the northwest of the house/building. Avoid constructing a toilet in the centre or the northeast of a building. When it has to be an attached toilet, let it be on the northwest side of the room. The second alternative is the southeast of the building or room. Logo logic Q.
Is there any relevance in logo designing for a company? Should we consult some expert for it? A. Yes, the design of a company logo is very important for the success of any business. A good design enhances the vibrations, acts as magnet for customers, synchronises auspicious elements, gives preferences over competitors, optimizes growth and success; adds value to your products. Colour combination, too, plays a vital role besides element of business which is also more important. For example a soft drink company that sells black water with a red logo has been doing excellent business in spite of opposition as the logo signifies liquid cash.
Sewage line in front of the house
Q. I have a plot facing east and want to construct a house. But a sewage line is passing right in the front exactly on the boundary line of the plot. Is this a Vaastu dosha or not? —
Avinash
A. Sewage pipes, drains, lines etc are common in modern colonies. If you have a sewage pipe passing right in front of the plot then there is very little that you can do to change it and we can just talk about the remedial measures in this regard. You must take care that your entry point is covered with some solid material.
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All those prospective home buyers who were checking out the attractive subvention schemes being offered by developers over the past few months and were gathering courage to finalise a deal by paying just 20 or 25 per cent of the cost in the beginning and the rest 80 or 75 per cent at the time of taking possession of their home three to four years later, have been forced to retreat once again into their ‘cocoon of caution’. The reason is the RBI’s recent notification to banks to link disbursal of home loans with stages of construction.
Infrastructure woes and poor enforcement of NCRPB’s regional plan have stunted the growth of realty sector in this NCR town 
The reason is poor enforcement of NCRPB’s regional plan that calls for integrated transport, power, water, sewage and housing systems. 
Meanwhile, the UP Awas Vikas Nigam has already acquired 2,700 acres for residential, recreation and commercial infrastructure development here. UP government is constructing a large number of flats in Baghpat under its “Manniya Kanshi Ram Awas Vikas Yojna”. 
The recent announcement of ban on sand mining is likely to hit the real estate sector the most. Not only will the prices of sand escalate due to this, but project completion might also take a hit. 
KDPMGI, group launched an affordable residential project MGI Maple in Govindpuram, Ghaziabad earlier this week. The new project is approved by GDA and honored by CRISIL for state of the art infrastructure. It will be spread over an area of 2 acres and will have 2+1, 3, and 3+1 BHK apartments in the range of Rs 30 lakh to Rs 90 lakh. 
Lighting is one of the most important yet overlooked elements of a good interior design. In addition to functional purpose, it is also essential for the ambience of a living space. When it comes to lighting fixtures, chandeliers are the most dramatic, eye-catching options which create the right mood for any room. Their glittering presence captures the eye, adding charm and drama to a space.
Mixed treat
Mini-appeal
The beginning of paint work is an important stage in the construction of a house. However, a lot needs to be done before the final colours are applied to the walls. One must note that wall surface preparation is much more important than the actual application of paint. Wall preparation takes almost twice the time than that taken for the painting work. Patience shown in wall preparation reflects in the final painting. Walls that have been prepared well before painting look like marble after the final finish. Let's have a look at the way one should proceed in this regard:
Choose the colour scheme
Laminate flooring company Pergo recently launched Total Design, Barcodes Laminate Floor, a design concept developed by Pergo's Creative Director Olaf Leonhardt. The captivating barcode pattern is available in two timeless and stylish variations: white and silver and black and silver. Laminate is a material with nearly unlimited expressive possibilities. The Total Design concept targets floor buyers who are looking for a more imaginative expression from a floor to create a more unique impression of the space. All come in Big Slab format (1236 x 400 mm). 
Choice of Church 
Q. I have some agricultural land within municipal limits. The same is being acquired by the state government for the setting up of an Industrial Estate. I understand that the capital gain arising on the compulsory acquisition of such a land is exempt from tax. If so, kindly elaborate. —
Raj Kumar
Will the rebate on LTCG be valid if I sell the new property?
When is the rate of 10 per cent tax on sale proceeds applicable?
Is repayment of loan interest tax rebate?
How can an NRI get money after selling property in India?
Q. I am planning to buy a resale property in Chandigarh in a few months. But I’ve been told by an acquaintance that it is very hard to get a home loan on a resale property as compared to that for a new purchase. How does a bank evaluate loan eligibility for such a deal? —
Kavita Kalka
Q. My house is facing north-west. Kindly tell me which directions will be better for toilets in the house and specifically for fixing the toilet seat? —
Mridula Puri