REAL ESTATE
 

 

City of babus to get sporty spots
Horse riding project, motor sports park, water theme zone and commercial area will dot south of City Beautiful, finds out
Sanjeev Singh Bariana
Complaining of a comparatively lopsided development in comparison to the area of the “affluent North”, the residents of the southern belt of Chandigarh will soon be host to several hot spots for varied entertainment avenues. A horse riding club, a motor sports park and water theme park will be only a part of the total development activity in the southern sectors.

NGO seeks redesign
Chandigarh realty and building bylaws need some major overhaul keeping in mind the demographic and socio-economic changes.

Fashion Technology Park Construction begins at Fashion Technology Park
Construction activity has commenced at the Fashion Technology Park, Mohali, whose foundation stone was laid last month by the Punjab Chief Minister, Capt Amarinder Singh. The Fashion Technology Park (FTP) is Spread over 14 acres.

Patiala becomes colonisers’ paradise
Builders rule Punjab CM’s home town, notes Chander Parkash
Patiala has been witnessing massive urbanisation over the past few years. Known for educational, sports and cultural facilities, besides less polluted environment and close proximity to Chandigarh, the town has become a favourite place for the private colonisers. During the past few years, though the government agencies made a token effort to develop new residential colonies and commercial complexes, it failed to produce desired results and left the field of real estate, including the development of new colonies open for private entrepreneurs, who cashed in on the situation and minted money by developing authorised and unauthorised colonies on every vacant patch of land.

ESTATE TALK
Ansal API targets Tier II cities
Ansal API Group, one of the leading players in real estate, has chalked out a plan to enter the Tier II cities like Amritsar, Jalandhar, Meerut and Lucknow.

GREEN house
A colourful saving grace!
When the garden is bereft of colour, shrubs make the most suitable presence in a garden, writes Satish Narula

Stock market potential largely untapped
Even as the Indian real estate sector is towering new heights, its capital market growth potential has remained largely untapped so far.

Investors pensive as realty stocks plunge
Sensex in red leaves many with burnt fingers, says Manoj Kumar

Builders try to be different!
In the race for one upmanship, Ludhiana realtors vie to offer facilities on a platter, observes
Shveta Pathak.
Real estate boom in Punjab is not restricted to coming up of numerous malls and large-scale projects. Middle-level projects too, particularly residential, are passing through a phase of stiff competition with builders vying to offer facilities that makes them “different” from each other.

TAX tips
Opinion varies on date from which capital gains are calculated from the sale of property
Q. I was allotted a property in 1999. The details of the payments made were as under: 1999 — Rs 47,954 2000 — Rs 39,962 2001 — Rs 99,000 2002 — Rs 99,000 2003 — Rs 39,962 2004 — Rs 40,000 2005 — Rs 40,000 Total Rs 4,05,878 before possession. 2005 Rs 34,000.00 after possession on September 30, 2005.

Buzz on Bourses
Mariners society eyes Chandigarh
Chandigarh: The Mariners Welfare Society (MWS) a Delhi-based real estate company specialising in housing projects dedicated to the seafaring community, has planned the launch of its project, Mariners Ville in Gurgaon on 100-acres.

 

 

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City of babus to get sporty spots

Horse riding project, motor sports park, water theme zone and commercial area will dot south of City Beautiful, finds out Sanjeev Singh Bariana

Complaining of a comparatively lopsided development in comparison to the area of the “affluent North”, the residents of the southern belt of Chandigarh will soon be host to several hot spots for varied entertainment avenues. A horse riding club, a motor sports park and water theme park will be only a part of the total development activity in the southern sectors.

The Urban Planning Department of the Chandigarh Administration is learnt to have identified at least 30 acres of land for a water theme park between west of Palsora colony and Maloya. At least 40 acres of land has been identified for a motor sports park and another 30 acres for a horse-riding park in the same area, sources said. A senior official said: “The Administration is consciously working for an overall development of the city. The South has come in for a little extra attention now. It is very pertinent to point out that besides the development of sites, elaborate programmes are also being made to handle the extra traffic expected on these roads”.

A detailed map has been etched out by the Urban Planning Department with regard to the developmental activity in the new area identified for the car racing, horse riding and amusement park projects. The area identified for special growth adjoins Mohali. One special belt has been specified between Sectors 48 and 53 and another on the areas adjacent to the stretch of road dividing Sectors 47 and 39.

Earlier, the area was intended to be developed as only a site for institutional land. Under the new plan, a portion of Sector 43, adjoining the Inter State Bus Stand, will be developed as a commercial area. The commercial area is expected to be an important development in sharing the extra burden on the big markets of the city, including Sectors 17 and 22, besides certain others. The institutions will now be housed in the area opposite the ISBT, Sector 43.

The Administration plans certain more big projects in the area. The city will soon have its second grain market near Sector 39. The city will have a five-star hotel in Sector 53. The new Transport Area will also be coming up in the area near Sector 39. The Industrial Area, Phase III, is being planned near Raipur Kalan.

The skyline of the City Beautiful is in for a massive change with the Chandigarh Administration approving a 10-storeyed housing scheme in Sector 63. Chandigarh Housing Board has completed all exercises for shortlisting an architect and a formal nod is expected soon. The CHB had invited ‘expression of interest’ from all over the country. As many as 63 parties responded following which the CHB shortlisted 26 architects. As many as nine parties submitted the design and the CHB selected one of the qualifying architects. The name needs a formal approval from the Administration.

Tall buildings will need extra facilities, which will mean ensuring a 24-hour power supply. An effective power back up is likely to be provided. Taller buildings will mean more area for green space in a housing society which can be utilised for providing additional facilities, including green belt and parks.

“The new infrastructure and markets mean a changed lifestyle”, the official added.

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NGO seeks redesign
Peeyush Agnihotri

Chandigarh realty and building bylaws need some major overhaul keeping in mind the demographic and socio-economic changes.

A change in floor area ratio in the northern sector, structural changes in government houses, making Sector 17 totally commercial to effectively utilise the space and categorisation of violations are some of the suggestions that Samadhaan, a Chandigarh-based NGO, has to make.

Established in 1999, Samadhaan is a pressure group for social justice

Talking to The Tribune, Rampaul Malhotra, a Chartered Engineer and President, Samadhaan, suggested that floor area ratio (FAR) should be revisited in the northern sectors for proper utilisation of space.

“It’s time for vertical growth in Chandigarh. The government houses in a few sectors have been planned such that there is a vast courtyard between adjoining houses. This space cannot be utilised properly under the present circumstances. Rather, it is a source of nuisance as wild vegetation covers the area . The problem is rampant in old government houses in Sectors 7, 22 and 23. The UT Administration should go in for multi-storeyed houses in such sectors, including construction of penthouses so that a few more families can be accommodated in less of space,” he says.

Adding that Sector 17 has lost its relevance under the present circumstances, he says that all government offices should be shifted out of Sector 17 to lessen the congestion and the sector should be made fully commercial. “There is a vast stretch of unutilised ground space in parts E and F of Sector 17. Similarly, there is a lot of land space near GPO towards Jagat theatre. Parking slots can be freed if government offices shift from the sector and the UT Administration can rake in a moolah by redesigning,” he says.

Pointing out that all major and minor kinds of violations are being measured with the same yardstick, he says violations can be sorted into three categories — need-based alterations, ornamental changes that do not change the façade and serious violations, like tampering with dimensions.
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Construction begins at Fashion Technology Park
Chitleen K. Sethi

Fashion Technology Park Construction activity has commenced at the Fashion Technology Park, Mohali, whose foundation stone was laid last month by the Punjab Chief Minister, Capt Amarinder Singh.

Spread over 14 acres, the Fashion Technology Park (FTP) presents a unique eco-industrial model where a community of manufacturing and service businesses in fashion industry would collaborate to improve their economic performance in every possible aspect.

Designed by Hafeez Contractor, the park will have a residential area, an amphitheatre, retail and business areas other than the knowledge centre.

“We have incorporated all components to ensure zero emission/ discharges to the environment and maximum benefits for a sustainable environmental development in Mohali. The prominent features of the project includes in-house sewage treatment plant, rainwater harvesting scheme, water treatment and recycling scheme, energy efficiency through architectural design, CNG based co-generation sets, solid waste treatment units, extensive landscaping and plantation,” says CEO of the park J.S. Kochar
The park will have a residential area, an amphitheatre, retail and business areas other than the knowledge centre
The park will have a residential area, an amphitheatre, retail and business areas other than the knowledge centre

The park, in form and intent, integrates four domains of the intellectual, commercial, industrial and collective endeavour.

The intellectual domain — The Business School of Fashion (BSF) — forms the heart of the park.

“Some of the key initiatives of BSF include empowerment of the self-help groups of rural women of Punjab by organising, centralising and integrating the Phulkari skill set at the grassroots level. The initiative targets to provide and sustain the work and employment of the rural Punjabi women practicing the art,” Kochar says.

“We are also establishing back-end manufacturing support in Ludhiana, along with the knitwear and shawl manufacturers club. A formal memorandum of understanding (MoU) with both the entities for mutual cooperation has already been signed,” he adds.

The park has also started strategic alliances with eminent fashion designers. Already MoU has been signed with the ‘House of Valaya’.
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Patiala becomes colonisers’ paradise
Builders rule Punjab CM’s home town, notes Chander Parkash

The boundaries of the city, which was accorded the status of a counter magnet town by the National Capital Region Planning Board, is confined to a dozen historical gates. Now, private players have also introduced the culture of flats in this city.
The boundaries of the city, which was accorded the status of a counter magnet town by the National Capital Region Planning Board, is confined to a dozen historical gates. Now, private players have also introduced the culture of flats in this city. — Tribune photo by Rajesh Sachar

Patiala has been witnessing massive urbanisation over the past few years. Known for educational, sports and cultural facilities, besides less polluted environment and close proximity to Chandigarh, the town has become a favourite place for the private colonisers.

During the past few years, though the government agencies made a token effort to develop new residential colonies and commercial complexes, it failed to produce desired results and left the field of real estate, including the development of new colonies open for private entrepreneurs, who cashed in on the situation and minted money by developing authorised and unauthorised colonies on every vacant patch of land.

The situation over the past four to five years has reached such a point where one can see residential colonies coming up at far away places from this city. All main roads originating from this city and leading to different towns and other bypass roads have been hugely exploited by the agents and developers for carving out townships and commercial complexes. Wedding mall, worth thousands of crores of rupees, perhaps the first of its kind, is fast coming up on the famous mall road of the city.

The boundaries of the city, which was accorded the status of a counter magnet town by the National Capital Region Planning Board about a decade ago, is confined to dozen historical gates built by different descendants of Phulkian dynasty.

The city witnessed different phases of growth in educational, cultural, sports and industrial fields at different times after the reorganisation of old Punjab. Dotted with number of famous gardens and heritage buildings, the first phase of growth was witnessed during the pre-Independence days and the city developed around Qila Mubarak, the official residence of Baba Ala Singh, founder of Patiala state. The main character of this growth was the coming up of clusters of residences and shops separated by narrow lanes and bylanes.

The second phase of development included the expansion of city towards all directions and development of certain colonies by the private persons in the area surrounding the old city. The third phase of growth included the development of colonies by Punjab Urban Development Authority (PUDA) on the Patiala-Rajpura road, Patiala-Sirhind road and some residential pockets by the Improvement Trust on Nabha road.

However, the fourth and current phase of grown brought revolutionary changes in the entire complexion of the city. The real estate agents and developers judiciously and injudiciously cashed in on the situation connected with the shortage of houses in this town, which has been witnessing migration from the surrounding rural areas also, and injected the town with new colonies in every direction under different names.

Not only this, private players also introduced the culture of flats in this city. While the private players showed unusual aggression in the business of development of residential colonies and commercial complexes, the state government agencies including PUDA and the improvement trust could not deliver the goods in proper manner and hence made those, who needed houses, to pay through their noses to the private colonisers, to fulfil their dreams to have roof above the heads of their family. This kind of situation led to an unprecedented hike in the prices of residential and commercial plots in almost all colonies of the town.

Interestingly, the state government agencies also failed on other account. PUDA also failed to check unauthorised construction and development of illegal colonies in those areas falling outside the limits prescribed by local Municipal Corporation.

Official sources said that about 25 unauthorised colonies have come up on the outskirts of this town. Some of the unauthorised colonies have come up at a stone’s throw distance from the PUDA office. A number of big colonies, approved by PUDA, have also come up in this town and surrounding areas.
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ESTATE TALK
Ansal API targets Tier II cities
Manoj Kumar

Kunal Banerji Ansal API Group, one of the leading players in real estate, has chalked out a plan to enter the Tier II cities like Amritsar, Jalandhar, Meerut and Lucknow.

The surge in economic growth in the small and medium towns, and the growing demand of good housing has encouraged the Delhi-based company to move on the Delhi-Amritsar Highway in a big way.

“Since good land in metros are in short supply, and people across all towns are moving to the outskirts, away from congested areas, the developers are also concentrating towards these areas,” says Kunal Banerji, Vice-President, Marketing & Corporate Communications.

“We have moved to Tier II cities for the development of integrated townships that would have in-built shopping malls, residential apartments, entertainment facilities with assured security and green environment,” he adds, while elaborating company plans.

He says Ansals, which has pioneered in boosting retail business in national capital by building first the Ansal Plaza, has already started work on integrated towns and shopping complexes in Bathinda, Ludhiana, Jalandhar and Mohali in Punjab, besides Karnal and Sonepat in Haryana.

“We have been surprised by so much untapped demand for flats, penthouses villas, and quality commercial property in these towns. Now the company is planning large-scale investment in Punjab and Haryana, besides UP,” says Mr Banerji.

On rising demand in Tier II cities, Mr Banerji says: “In Punjab, our 25 to 30 per cent of properties has been bought by the non-resident Indians (NRIs) as well, who want to have a good and secure property after earning money in Europe or Gulf. Further, the working couples are also buying houses in these towns.”

Mr Banerji says the first set of apartments would be ready in next two years in Bathinda. The company is awaiting government approval to start work in Mohali.

Ansal API, he says, in collaboration with Landmark Holdings, a real estate investment vehicle of Dalmia Group, has also launched Sushant Royale luxury apartments and penthouses at Karnal. Spread over 350 acres, it will be a part of Sushant city coming up on the National Highway.

The company with an annual turnover of around Rs 2,000 crore, is a listed company. It is expected to hit the stock market in the next two–three months to raise over Rs 2000 crore for investments. In Greater Noida, the company is also building an IT Special Economic Zone (SEZ) spread over 75 hectares.
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GREEN house
A colourful saving grace!

When the garden is bereft of colour, shrubs make the most suitable presence in a garden, writes Satish Narula

Some weak-stemmed shrubs, like Clerodendron thomsonii, are also used as light climbers
Some weak-stemmed shrubs, like Clerodendron thomsonii, are also used as light climbers
Mussaenda being deciduous in nature sheds leaves in winter to revive in April when it bears colourful bracts
Mussaenda being deciduous in nature sheds leaves in winter to revive in April when it bears colourful bracts

When the garden is bereft of colour, the shrubs provide the saving grace. There is a time gap during winters and summers when there is no flowering as the annuals are in juvenility, which is the time when judiciously selected shrubs flower to fill the gap.

Shrubs make the most suitable presence in a garden, as the space constraint is always a limiting factor with a gardener. Home gardeners cannot afford to have trees as they give shade and do not let grass or other plants grow in their near vicinity. Shrubs have another big advantage that these can be trained and pruned to suit one’s requirement. These could also be used as mini-trees when required for such an effect.

Shrubs can also be exploited for their potential for dual beauty effect as we see in case of variegated hibiscus. The plant is prized for its variegated foliage as well as contrasting blooms. It is because of this character that it is used as a specimen plant too. The hibiscus comes in many hues red, orange, white, pink, crimson and even blue.

Some gardeners use it as a hedge but that is not a desired status for this plant as repeated pruning is deterrent to the flowering of the shrub. Avoid growing hibiscus at a place, which gets more of moisture, as the plant is prone to collar rot leading to its untimely demise.

There are some weak-stemmed shrubs that are also used by some like light climbers. The glaring example is that of Alamanda and Clerodendron thomsonii. Both these shrubs are known for their spectacular bearing and bloom quality. The latter bears a big white calyx tube out of which protrudes deep red bloom with perfect contrast. As the stem of both shrubs are weak, they need support.

Ground cover

Let me introduce you a plant for use in a different way that you are using at present. It is the most commonly used duranta. The golden duranta is presently being used as ground cover plant in combination with other such plants. Leave it to grow as a shrub and you will get abundance of blue tiny flowers that are amply visible due to the contrasting golden yellow foliage.

While making selection, you can also make combinations for continuity in flowering. For example, a combination of Poinsettia and Mussaenda can give you a continuity of bloom almost throughout the year. Mussaenda being deciduous in nature sheds leaves in winter to revive in April when it bears colourful bracts, though the small yellow flowers are insignificant. The bracts are, however, magnificent and cover the whole crown beginning with end of April to the end of November. A few shrubs put together give a mass effect of soothing pink. At the end of November when it sheds bracts, Poinsettia starts putting deep red bracts that continue to give colour to the garden all through the winter, till the end of April.

Fragrant shrub

If you are looking for a fragrant shrub, then nothing can beat Francisia also called Yesterday, Today and Tomorrow. The plant derives its name from the fact that the colour of the blooms changes with ageing and thus at any given time you may get white, blue and yellow blooms growing together. The shrub blooms profusely. Other fragrant shrubs are Gardenia and Raat ki Rani.

To get blue flowers go in for Menia erecta, for sky blue colour flowers, grow Plumbago, for white blooms, Chandni, Bougainvillea, for yellow mass Gamphimia, Ixora and so on. Some of these shrubs are available in a range of colour too. Under sub-montaneous conditions like Chandigarh, Ropar, Hoshiarpur, Pathankot and you can even try the much loved hilly shrub, the Hydrangea. Unlike almost all other shrubs, however, it needs a semi-shade condition. Be sure, it does give blue or pink bunches of blooms here too.

Shrubs are not costly and most of these are available within a range between Rs 15 and 40 apiece. In case you find any good shrub growing in a friend’s garden, you can get seeds or cuttings and make your own plants.
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Stock market potential largely untapped

Even as the Indian real estate sector is towering new heights, its capital market growth potential has remained largely untapped so far.

The public equity stake in the industry stands at a dismally low level of 0.2 per cent, while more than 98 per cent of the overall Indian commercial property market remains in the owners’ hands, global equity research major Deutsche Bank said in a special report on Indian real estate market.

A majority of the overall stock market presence of the real estate sector in India, as estimated by the Deutsche Bank study, is privately held, while the publicly traded component of the industry is still in its nascent stage with a market share of less than 0.5 per cent.

For the investors’ willing to invest in the sector, options are limited to only a handful of listed companies.

Even among the publicly traded real estate companies, promoters hold the majority of the stake.

The situation is likely to improve once DLF Universal, a leading player in the market, enters the capital market. The company is planning to raise more than Rs 12,000 crore through its public issue, which is likely to be the biggest ever initial public offer (IPO) in the country’s capital market.

According to the data available with stock exchanges, a staggering 65.27 per cent stake is held by promoters in Ansal Properties and Infrastructure Ltd, a major real estate player in the country.

A similar pattern is seen in the shareholding chart of Unitech Ltd, which has seen a sharp rally in its share price over the past few months. The promoters hold a huge 60.28 per cent stake in the company.

With the absence of Real Estate Investment Trusts (REITs) and Real Estate Mutual Funds (REMFs) the real estate investor doesn’t have too many choices.

The introduction of REITs and REMFs is expected to provide investors with a comfort zone, while improving transparency and reducing liquidity risks. This will also provide a wider choice range for investors to invest in the sector, the report said.

The Security Exchange Board of India had approved the Real Estate Fund (REF) in 2005, but this is presently open only to high net-worth individuals (HNIs), institutional investors and global investors.

Deutsche Bank expects the country’s growing economy to lead to significant boost in demand for retail, office and logistics space, which will eventually drive further growth in the commercial real estate sector.

A strong capital market base would augur well for property financing, while introduction of REITs would provide global investors a familiar investment vehicle, the report added.

Currently, private investors are playing an important role in the country’s real estate investment market. The total private equity volume stood at $1.6 billion, or 40 per cent of the Indian real estate capital market at the end of 2005, the report says. According to Deutsche Bank report, India’s institutional real estate market is also under-developed and the investible stock, the market component that is or could become an asset of institutional investors, is no more than $83 billion.

The investible stock accounts for only 27 per cent of the total market.

Deutsche Bank estimates the total commercial property market at over $300 billion, out of which the invested stock, the share owned by professional real estate investors, accounts for only $4 billion.

Deutsche Bank’s research report on real estate forecasts that the commercial stock has the potential to grow by $66 billion in the next five years to $366 billion. —PTI
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Investors pensive as realty stocks plunge

Sensex in red leaves many with burnt fingers, says Manoj Kumar

Illustration by Gaurav SoodInvestors, who had invested in realty stocks over the past one year considering that the boom in real estate prices, especially in metros would result in goods returns, have burnt their fingers.

With the downfall in Sensex continuing for the past nearly one month, the stocks of real estate companies like Unitech, Ansal Properties and Prime Properties have fallen sharply.

Taking advantage of the bull run in the secondary market, a number of real estate and companies had tapped investors to mobilise funds from the primary market too. And the stock price of some of these companies has also fallen below their offer price while some are still in the money.

In the last three to four months, stocks of over 50 companies, involved in real estate development or with huge land holdings, had seen spurt in prices. Among others, India Bulls and Mahindra Group had announced to enter the construction business in a big way.

In fact, real estate market experts said, the property prices which had appreciated by 100 to 150 per cent over the past one year in metros and major towns have rather come down marginally by up to 20 per cent in National Capital Region, especially in Gurgaon and Noida.

Consequently, the real estate companies, which were contemplating to hit the stock market this month, have postponed their decision and are now waiting for stabilisation of the market. DLF and Ansal API, Parsvnath Developers, Gammon Infrastructure, and Omaxe Construction are reportedly revising their strategy and premium on the stock price, after sharp fall in realty stocks.

The stocks of Ansal Properties, Lok Housing, India Bulls, Mahindra Gesco fell by 28 per cent, 28 per cent, 12 per cent and 12.9 per cent between May 12, the day the markets started crashing, and May 30. The trend continues.

With the Sensex tumbling, these companies are finding it difficult to convince the investors to stay. The investors should, wait for the time being, market observers say.

According to information available with the Securities and Exchange Board of India (Sebi), real estate as well as construction and infrastructure companies had plans to raise over Rs 20,000 crore from the capital market over the next few months.

Market experts say the investors, who had bought the stocks at a higher price after good reports on realty stocks, should either sell their stocks to minimise losses, or should wait for at least one year.

They add that after some correction in the market, the realty stocks are likely to stabilise considering strong fundamentals, growing demand for housing and government focus on infrastructure. Further, the prices would strengthen following global trends in the European, US and the Gulf markets.

LIC arm plans MF

Mumbai: LIC Housing Finance Ltd is contemplating on setting up a ‘real estate mutual fund’ as part of its diversification initiatives.

Briefing newspersons, its Director & Chief Executive S.K. Mitter said: “With a booming real estate market, there is a great scope for real estate mutual fund (REMF) to succeed in India. REMF have been a great success abroad and as such, we would like to develop one ourselves in the near future.”

That apart, S.K. Mitter said the company has plans of mobilising funds through public deposits. Its borrowals this fiscal is of the order of Rs 6,700 crore as against Rs 5,200 crore last year. As such, he continued, the company plans to go in for ‘public deposits’ as it would help reducing the cost of funds as well as it would be a new source of accessing cost effective funds.

Commenting on the diversification activities pursued by the company, he said the company has floated a subsidiary LICHFL Care Homes Ltd to conduct the business of running `Assisted living community centres’ for senior citizens. In its first phase, the Bangalore project houses 98 independent cottages spread across 10 acres of verdant garden.

With the overwhelming response to its pilot project at Bangalore, He said these centres hold tremendous future. It was also planning to set up residential units in Kochi, Bhubaneshwar, Kolkata, Haridwar and Delhi in the coming months. — UNI
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Builders try to be different!

In the race for one upmanship, Ludhiana realtors vie to offer facilities on a platter, observes Shveta Pathak

Real estate boom in Punjab is not restricted to coming up of numerous malls and large-scale projects. Middle-level projects too, particularly residential, are passing through a phase of stiff competition with builders vying to offer facilities that makes them “different” from each other.

It is not thus a few hundreds of routine flats. Companies are offering facilities ranging from gas pipelines to modular kitchens, wooden flooring and semi-furnished apartments as well.

Orbit Apartments Private Limited, which is coming up with an Rs 50-crore project on the Chandigarh-Ambala road, has planned modular kitchens, a three-tier security system and pipe gas supply for its apartments. “With real estate prices having increased manifold and large companies venturing into the field, it has become critical for builders here to offer facilities that make them stand out,” says P.S. Grewal, Director, adding: “In our case, besides the required norms and ensuring safety, the complex would be equipped with shopping arcade, ATM, restaurants etc, which would be managed by us and not outsiders so that there is no compromise on quality. In apartments, we are offering modular kitchens and also gas supply through pipe.”

Gas supply through pipe, which the GK Group, too, plans to provide in its ‘GK Valley’ project located in Sangowal on Gill road in Ludhiana, is a new facility on the offer in Punjab. “We have forged a tie-up with Bharat Gas and the cost to consumers would be lower than what they pay for cylinders. There would be a single source and metering of consumption would be done,” says Gulshan Kumar from the group.

Barnala Builders is offering wooden flooring in master bedrooms and semi-furnished apartments in its ‘Maya Gardens’ project. Another trend, that is fast emerging is building penthouses within the complexes developed by builders. Prominent names are Deepak Builders, that would come up with a Rs 50 crore project of six penthouses and 93 furnished flats in Ludhiana, and Barnala Builders, that would have 17 penthouses and 300 apartments.

“With the entry of a large number of multinational companies, demand for high-end flats is on the rise. Main buyers in such cases are MNCs themselves, NRIs and people who come from other cities and look for facilities along with security. Furnished apartments and penthouses cater to the needs of this segment,” opines Deepak Singal, CEO, Deepak Builders.

Semi-furnished flats are centralised air conditioned and complete with household gadgets like refrigerators, washing machines and televisions etc. Builders aver by catering to growing demands of people in housing, they would not only be able to face the competition by large players but manage to emerge winners too.

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TAX tips
Opinion varies on date from which capital gains are calculated from the sale of property
by S.C. Vasudeva

Q. I was allotted a property in 1999. The details of the payments made were as under:

  • 1999 — Rs 47,954
  • 2000 — Rs 39,962
  • 2001 — Rs 99,000
  • 2002 — Rs 99,000
  • 2003 — Rs 39,962
  • 2004 — Rs 40,000
  • 2005 — Rs 40,000
  • Total Rs 4,05,878 before possession.
  • 2005 Rs 34,000.00 after possession on September 30, 2005.
  • Date of Possession: March 7, 2005

I propose to sell the same for Rs.15 lakh. Please let me know the capital gain tax on it and how will it calculated:

  • From the date of allotment letter received?
  • From the date of possession?
  • From the date of registration of property in my name after the execution of deed of conveyance?

Note:- Registration of property and deed of conveyance has not been done because 100 per cent payment is not paid so far.

— Vivek Verma, Chandigarh

A. There is a difference of judicial opinion with regard to the treatment of capital gain on the sale of property on the issue raised in the query. According to one set of opinion the capital gain should be computed with reference to the date of allotment. Another set of opinion is that the capital gain should be computed with reference to date of possession as right of allotment gets merged in the possessory right and loses its significance. The date of registration has no significance in view of the definition of the word ‘transfer’ contained in Section 2(47) of the Act according to which the transfer is effective from the date of possession.

Sections 54EC and 54F

Q. I have a plot (residential). It was purchased in 1971 for Rs 3,000. Now its market price is Rs 5 lakh. I want to dispose it of in 2006-07. Kindly provide me the details of the capital gains with income tax liabilities thereof.

Also suggest how the income tax from the sale of this residential property can be saved.

— Surinder Nath Bagga, Ludhiana

A. The capital gains on the sale of plot, which was purchased in 1971, will be long-term capital gains. It will be computed by deducting indexed cost of acquisition and expenses incurred in connection with transfer from the sale consideration.

In case the land was purchased before April.1, 1981, the indexed cost of acquisition shall be equal to:

Fair market value of plot as on April 1, 1981, or actual cost i.e. Rs.3,000, whichever is higher x Cost Inflation Index for 2006-07

Cost inflation index for 1981-82 i.e. 100

The capital gains so computed shall be taxed @ 20 per cent plus surcharge @ 10 per cent (if total income exceeds Rs.10 lakh) plus education cess @ 2 per cent.

Capital gains tax can be saved in two ways:

1. Section 54EC i.e. by investing the capital gain in bonds redeemable after three years, which are issued by NHAI or REC. The investment should be made within six months of the date of the transfer. The exemption shall be granted under these provisions of the amount of capital gain if the amount of investments in 54EC bonds is not less than the amount of capital gain. In case the investment in such bonds is less than the amount of capital gain, the exemption shall be of so much of the amount as bears to the whole of the capital gain. The same proportion as the cost of acquisition of the aforesaid bonds bears to the whole of the capital gain.

2. Section 54F: If you do not have more than one house in your name at the time of transfer of plot, then you can invest the sale consideration for purchasing or constructing a residential house. The investment can be made for purchase or construction of residential house within a period of one year before or two years of the date on which transfer took place or within three years of the date of transfer. Exemption allowed should be that percentage of the capital gain as the amount invested in the acquisition or construction of the house bears to net consideration. Net consideration means the amount of consideration on sale less amount of expenditure incurred wholly and exclusively in connection with the sale.

Investment by senior citizens

Q. Kindly advise me my income tax liability for 2005-06 from the following particulars:

I and my wife are senior citizens.

1. My annual pension for assessment year Rs 98,000

2. LTC Rs 4,545

3. Income from small saving schemes, MIS & SCS Rs 20,000

My wife, who was self-employed between 1978 and 1982, purchased a residential plot from her own savings at Bathinda for Rs 12,000. During May 1982 (and after that she was no longer self employed) a sum of Rs.5,000 was spent on the plot for earth filing and temporary boundary walls. Now she is dependent on me and I am filing my Income Tax return every year.

The said plot has been sold now in June 2005 for Rs 1,50,000. Out of the said amount, she gave me Rs 1 lakh for investing in the senior citizen scheme, which was put by me in my own name in the bank.

In case any tax liabilities is to be borne please advise the how to save.

— Jaswant Singh, Patiala

A. It would be essential for the purpose of computing the capital gain on the sale of plot owned by your wife to know the cost price of the plot and the exact date of which it was purchased. In case the same was purchased prior to April 1,1981, its market value as on April 1, 1981, will have to be ascertained. The date of purchase of plot being between 1978 and 1982, it is presumed that the same was purchased before April 1, 1981. For this purpose of market value as on April 1, 1981, is required to be ascertained. Presuming that the market value of the said plot as on April 1, 1981, was Rs.12,000, the value thereof on the basis of Cost Inflation Index (CII) applicable for the financial year 2005-06 would be Rs.12,000 x 497/100 = Rs.59,640. The amount spent on earth filing and temporary boundary walls on the basis of CII for 2005-06 would be Rs.5,000 x 497/109 = Rs.22,798-. The total indexed cost would thus be Rs.82,438. The sale price of the plot being Rs.1,50,000, there will be a long term capital gain of Rs.67,562. In case your wife does not have any other income, the amount of long term gain would not be taxable as it is below Rs.1,85,000, being the amount up to which no tax is payable by a senior citizen. Since you are senior citizen, your income being below Rs.1,85,000, no tax is payable by you. The income earned on Rs 1 lakh invested in senior citizen scheme would be treated as you wife’s income under Section 64 of the Act.

Downloading form

Q. I am working for the United Nations and I know being an NRI exempted from tax. But still I want to fill up my returns. So what should I do? I had bought two plots for Rs 13 lakhs and am planning to invest more in India. What tax measures do I have to take in the long run. Can I buy a car on 100 per cent cash? Can I invest on my wife name?

— Satwinder Jit Singh Dhatt

A. The income received by the employees of the United Nations is exempt from tax. If you would like to file your IT return, you can download the return form from the site www.incometaxindia.gov.in. In the return, you should disclose the investment made by you in India so that no difficulty arises as and when you intend to construct the same or dispose of the plots. You can buy the car by payment in cash but you will have to give your PAN as the purchaser of high value items is required to give the information about the Permanent Account No to the seller. You can invest in your wife’s name but the income there from will be taxable in your hands.

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