Change of fortune
Malls, multiplexes and housing projects worth over 2,000 crore have turned the 10-km-long stretch along the left side of the four-lane NH 1 from Ludhiana to Sutlej bridge into a virtual goldmine for realtors, reports Jupinderjit Singh 

The wheel of fortune seems to have made a full circle as from being a virtual “desert road” as far as the value of property and development were concerned, the 10-km-long stretch along the left side of the four-lane National Highway 1 from Ludhiana to Sutlej bridge, has now turned into a virtual goldmine for realtors.

Almost a decade ago, an acre of land was available in the area for around Rs 5 lakh per acre, but surge in the realty sector in the year 2000 pushed up the prices and over the past few years the price of land has shot up to a whopping Rs 10 crore per acre from Rs 30 lakh per acre in 2003.

Not too long back land on the left side of the GT road from Jalandhar bypass chowk to Sutlej bridge, lying between the highway and the railway line, was considered unsuitable for realty projects following devastating floods in 1988 and 1993.

“Water had risen so high that time that for many days boats had to be used in the area, a sight still etched on the minds of old timers and property dealers,” reveals Parminder Singh of Ludhiana-based Raj Estates. However, with no major flood occuring after 1993, people began gaining confidence that money invested in property here will not be ‘drowned’. A tamed Sutlej, which flows like a quiet nullah now, seems to pose no threat to several dream projects. Yet, till sometime ago a majority of the people investing in the area were farmers who were attracted by the fertile land.

The property prices skyrocketed due to the influx of private players. And post 2002 realty boom it became a prime location. Now the total worth of the projects that will come up on this 10-km-long stretch is estimated to be over Rs 2,000 crore.

If AerenR brought the 25-acre Festival City project termed as Punjab’s first theme destination mall, near the city opposite Amaltas, its other project Gold Souk was planned to be built right on the banks of the once mighty river.

The Festival City, which is coming up fast, will have a five-star hotel, a world class theatre and many other state-of-the-art facilities. Apart from these two projects, AerenR and Aeren has bought a 175-acre stretch of land besides another 17.5 acres for their future projects.

The Punjab and the Centre governments too played a vital role in generating interest in the area by announcing that the city Industry would be relocated to this stretch and that tourism potential of the area would be exploited. The major fillip, however, came when the state and Centre governments announced that an international airport would be established here.

Though all these plans were shelved in the initial stages only causing massive losses to many investors, yet several big players came into the picture. Bharti Mittal and Reliance talked about developing a fruit and vegetable park in the area.

Talking about the strategic location of the stretch Parminder Singh says, “With no fear of floods, at least in the near future, the stretch has become highly important. Firstly, the belt is close to the rich NRI-dominated Doaba region. NRIs use this road and after crossing Haryana area there is no major international standard mall or stopover point for them along the GT Road, hence several malls are being built here.

“Secondly, the concept of theme malls too is catching the fancy of people. The Gold Souk eyes clientèle from Ludhiana as well as Jalandhar apart from the NRIs.

As the area is pollution free, the realtors are developing colonies as well, ELDCO company is setting up a residential colony over an area of 100 acres. Apart from that Reliance is also coming up with a major project related to farming. A 300-acre sprawling farm of fresh fruits, vegetables owned by the Rakesh Bharti Mittal group is already functional”.

Pardeep Dhall, a Ludhiana-based property dealer-cum consultant, said the turnaround on this stretch bears testimony to the realty boom in the state, “No land is available along the road now. Even the areas located near the railway line, at the end of the stretch are priced at Rs 1 crore or more per acre. Omaxe Ltd is coming up with a big shopping mall close to the Festival City. Amitabh Bhattacharya,vice-president, Corporate Communication, Omaxe, feels this is the best location for such a mall. “It would provide ideal outing to city residents. At the same time, it would be a great stopover for travellers along the GT road. Not only NRIs but foreigners visiting Punjab also travel along this route.

The 125,000 sq ft built-up area of the Omaxe Mall will be completely air-conditioned and inside will be a triple-multiplex, various food courts, and dedicated areas for ATMs and speciality and multi-cuisine restaurants.

A drive down the highway reveals hectic construction activity going on at several projects that will soon make this stretch of the highway truly rocking for the realtors as well as for commuters



Paradox of Peer Machchala
Ruchika M. Khanna

In a strange paradox, just 500 meters from the multi-storeyed buildings of Sector 20 in Panchkula, the rates of flats are almost half in the Peer Machchala area of Punjab.

What is more interesting is the fact that while the apartments and penthouses in Peer Machchala are fully furnished, complete with modular kitchens and 24-hour power back-up, the more expensive flats in Sector 20 are ‘raw’.

While a two-bedroom flat in Peer Machchala would cost anything between Rs 30 lakh to Rs 35 lakh, a totally ‘raw’ flat in Sector 20 is not available for less than Rs 50 lakh. No wonder, the USP of all realtors who are coming up with their projects in Peer Machchala is that the location of their project is near Sector 20, Panchkula.

Jagdish Goyal, managing director of AP Shresth Colonisers, which has named its project Panchkula Heights, said the USP of most housing and commercial projects in Peer Machchala was not just the proximity to Panchkula, but also the excellent services they were offering to customers. “Most builders are coming up with luxury apartments which will have an all-weather swimming pool, electronic surveillance, 24-hour power and water back up, earthquake resistant RCC frame structure and lush greenery within the complex. All this is available at half the cost and we will surely have a better, if not a similar response to the projects in neighbouring Panchkula,” he added.

The difference in rates, say realtors, is only because of lack of basic infrastructure in the Peer Machchala area of Punjab. Whereas Sector 20, Panchkula, boasts of excellent road infrastructure, community facilities like dispensary, police station, schools and a well established commercial area, Peer Machchala which is now witnessing a boom in realty development has no road network, sewerage or any community facility. The only road leading to the village from Zirakpur is too narrow, while the other connecting road of the village from Sector 20 is disputed as the Haryana government has termed it illegal.

However, Ajayvir Sehgal, CMD of Chandigarh Colonizers, which is coming up with Opera Towers in Peer Machchala, says that it is indeed unfair that the rates of property should be so low here. “We have requested the Punjab government to expedite the infrastructure work in this area,” he added.



TAX tips
What is meant by capital gain... 
By S.C. Vasudeva

The Income Tax Act, 1961 (the Act) contains provision with regard to the taxability of capital gains. Section 45 of the Act provides that any profit or gain arising from the transfer of a capital asset affected in the previous year shall be chargeable to Income-tax under the head “capital gains” and shall be deemed to be the income of the previous year in which the transfer took place.

The chargeability to capital gains is, however, subject to certain exceptions. The provisions in this regard are contained in various Sections of the Act. These Sections contain provision which, if complied would entitle the assessee to claim exemption from the leviability of capital gains tax.

What is a capital asset?

Section 2(14) of the Act provides that the term ‘capital asset’ means property of any kind held by an assessee, whether or not connected with this business or profession, but does not include, inter-alia:

(i) Stock-in-trade, consumable stores or raw materials held for purposes of business or profession

(ii) Personal effects such as wearing apparel, furniture, motor car, air conditioner, refrigerator, etc.; held for personal use by the assessee or by any member of his family dependent on him.

(iii) 6 ½ per cent Gold Bonds, 1977, 7 per cent Gold Bonds, 1980 and National Gold Bonds, 1980.

(iv) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999.

(v) Agricultural land in India, not being land which is situated within the local limits of any municipality, notified area committee, town committee or a cantonment board and which has a population of not less than 10,000 or which is situated in any area up to a distance of 8 kilometres from such limit or up to such distance from such limits as specified by a notification in this regard.

The term “capital asset” also includes jewellery although held for personal use. The jewellery covered for this purpose is defined as under by the relevant Section:

(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel.

(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel. From assessment year 2008-09 onwards archaeological collections, drawings, paintings, sculptures and any work of art have also been included in the term capital asset even though they are in the nature of personal effects.

The transfer of such articles would thus attract capital gains tax.

What is meant by transfer of a capital asset?

In accordance with the provisions of Section 2(47) of the Act “transfer”, includes the sale, exchange or relinquishment of the asset or impingement of any rights therein or the compulsory acquisition thereof under any law or in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment or the maturity or redemption of a zero-coupon bond.

The term ‘transfer’ for the purpose of capital gain tax also includes

a) giving possession of immovable property under part performance of a contract.

b) Any transaction which has the effect of transferring the immovable property. This clause is subject to the satisfaction of following conditions.

(i) The transferor is a member of a cooperative society/company/ association of persons

(ii) An allotment of immovable property is effected by virtue of the membership or allotment would be made by virtue of such membership.

(iii) The membership right is transferred which has the effect of transferring or enabling the enjoyment, of the aforesaid immovable property.

What is a short term and a long term capital asset?

Capital asset is classified as a short term or long term capital with reference to the period of holding of the asset by the assessee or the previous owner under certain circumstances. The period of holding of the asset is computed from the date of acquisition to the date immediately preceding its transfer.

The relevant periods in this regard are: Nature of asset Short term capital asset Long term capital asset

(i) For assets being share in a company or any other security listed in a recognised stock exchange in India or unit of the UTI/administrator of the specified undertaking/specified company or a unit of mutual fund specified under Section 10(23D) of the Act or from assessment 2006-07 a zero coupon bond. Held for not more than 12 months. Held for more than 12 months.

(ii) For assets other than these specified above held for not more than 36 months. Held for more than 36 months.

Short term/long term capital gain and taxability of such gains?

Long term capital gain means capital arising from the transfer of a long term capital asset.

Short term capital gain would be a gain arising from the transfer of a short term capital asset.

The long term capital gain arising on the sale of a capital asset other than the shares etc. referred to herein above is taxable at the rate of 20 per cent plus the applicable cess and surcharge. The long term capital gain arising on shares etc. as referred to in

(i) above is exempt from tax provided the sale of such shares etc. has been subjected to Securities Transaction Tax.

The short term capital gain except in respect of share etc. referred herein above is added to the total income and is taxable at the applicable slab rate plus applicable cess and surcharge.

The short term capital gain arising from the transfer of a short term capital asset being equity share of a company or a unit of an equity oriented fund and where such transfer is subjected to Securities Transaction Tax, the tax payable on such short term capital gain would be at the rate of 10 per cent plus applicable cess and surcharge. 



Revision of circle rates in Uttarakhand
Realtors heave a sigh of relief
Raju William

The recent rollback of circle rates for evaluating stamp duty on land deals was expected as it was perceived to be having an adverse bearing on the flourishing the real estate business in the state since it came into being seven years ago.

Alarmed over the slowdown of the realty sector in the state following an unprecedented enhancement of the circle rates from November 1, 2007, the BJP state government has reversed its decision in deference to popular demand.

Land in Dehra Dun city had become the costliest in the country after the government increased these rates from 25 to 300 per cent for different areas. In the posh residential and commercial Rajpur Road area in Dehra Dun city, the circle rate witnessed a vertical hike from the earlier Rs 13,000 per square meter to Rs 50,000 per square meter. Similarly the rates induced a steep hike in the property prices in other areas in the city and in rural areas as well.

Sensing widespread resentment that may have had a bearing on the popularity graph of the government, the Chief Minister said, “On public demand we have decided to rollback the circle rates from 10 to 150 per cent of the enhanced rates of different rate slabs”. The circle rates would be reduced by 150 per cent.

As per the Stamps and Registration Act, the state government gets stamp duty on the registration of property. Stamp duty is calculated as per the real market value of the property concerned. Since the issue of real market value has remained a bone of contention, the state government announces the circle rates of various areas of the state for the evaluation of the stamp duty. These circle rates are revised every two years.

After the enhancement of circle rates in Dehra Dun in November, anyone buying property in the Rajpur Road area locality had to pay stamp duty of 10 per cent on a minimum of Rs 50,000 per square meter of land purchased. A buyer buying a 100 square meter land, thus, had to pay a minimum stamp duty of Rs 5 lakh. A buyer purchasing one bigha land in the area had to pay Rs 40 lakh as stamp duty as the land was valued at Rs 4 crore. The state government had a target of earning Rs 465 crore from stamp duty. But the decision triggered panic and disappointment among the builders and realtors.

As expected, the rollback would once again restore buoyancy in the real estate market, the step has for sure given the public as well as market insiders a peep into the government’s mind vis-à-vis its policies regarding the real estate.

Another much talked about rule that the BJP government made after coming to power in the state should serve as a pertinent instance. The government had tightened the prevailing land laws by curtailing the right of the outsiders to buy property from the earlier permissible 500 square meters maximum land to 250 square meters. Despite legislation to stop the sale of land in this hill state to outsiders, the revenue facts and figures show that real estate has remained the fastest growing sector in the state. The figures of the past five years, since the new state came into being, reveal that the sale and purchase of land has been unprecedented.

Although, the state has been in overall debt, the records of the land registration and land revenue show a marked increase in the amount of revenue earned. In the past four years there has been an increase of 233 per cent in stamp and registration fee and 235 per cent in land revenue. This has been despite the fact that most of the land deals are undervalued by the buyers and sellers to save stamp and registration duty.

At the time of the formation of Uttarakhand in 2000-01 a total of Rs 89.45 crore were earned from stamp and registration duty and Rs 3.28 crore in land revenue. This rose to Rs 207.80 crore for stamp duty and registration in 2004-05 and Rs 7.74 crore for land revenue. During, 2003-04, the state government earned stamp duty and registration fee worth Rs 168.94 crore and Rs 12.64 crore as land revenue registration.



REAL talk
Vipul group to invest Rs 600 cr in Punjab
Punit Beriwala, managing director of Vipul, shares his company’s plans for Punjab with Ruchika M Khanna

Vipul Limited, a flagship company of the Vipul Group, is now entering the real estate market in Punjab. Other than coming up with an integrated housing project, the group has big plans for expanding its hospitality business in the state.

What will be the main features of housing project in Ludhiana?

We are coming up with a mega housing project in Ludhiana, at an estimated cost of Rs 400 crore. The integrated township project, Vipul World, is coming up on the Ferozepur Road and will be formally launched in April. The group has already acquired 120 acres for the project, which will come up in well manicured gardens. “This will have plots, lifestyle villas, premium apartments, high end commercial complex, a fully equipped shopping arcade, club house and a five star hotel. We are presently involved in further land acquisition for this project.”

What are the features of your group’s foray into hospitality sector?

A sum of Rs 250 crore has been earmarked for our hospitality business. In this sector we are in collaboration with Sarovar Hotels and Resorts. We will be building four star business hotels in Mohali, Amritsar, Ludhiana, Siliguri and Bhubaneshwar. Sarovar Hotels would manage the hotels whereas the ownership would remain with us. The arrangement would be on the basis of a management fee and would not involve any equity participation.

How will these projects be funded?

The group has an annual turnover of Rs 200 crore and investments in all these real estate projects will be made through internal accruals and through an equity stake (propriety stake) of 14. 9 per cent from an American bank. 



Parsvnath, Indiabulls to bid for rlys’ land

Parsvnath Developers Ltd and Indiabulls Real Estate have come together to bid for 10 prime location plots being offered by the Indian Railways for commercial development across various cities. The two companies have already submitted the request for qualification (RFQ) for the 10 plots offered by Rail Land Development Authority (RLDA) in the first phase. According to sources, Parsvnath and IBREL have entered into an understanding for the submission and bidding for the land offered by the Railway Ministry through RLDA and under the agreement, the RFQ for 10 locations have been submitted. The objective under the agreement would be to design, develop, finance and to market the developed property, they said. The 10 sites which have been selected for commercial development in the first phase are located in Delhi, Kanpur, Gwalior, Visakhapatnam, Kolkata, and Bangalore.

According to sources, both the companies have decided to join hands to bid for railway plots as IBREL is strong financially, while Parsvnath Developers has project execution capabilities. There is about 700 acres of railway land in 107 sites across the country that has been shortlisted by the railway ministry for commercial development on public-private partnership basis. The report of the feasibility study for commercial development of the 10 sites spread over 265 acres of land has been submitted to the RLDA. — PTI



Blooming bounty of bulbous plants
If adding a distinct touch to your garden is your goal then opt for bulbous plants and floor everyone with some exotic-looking flowers, says Satish Narula

When we talk about planting flowering plants we normally mention the summer or winter annuals. One of the less exploited options for landscaping and garden designing is the use of bulbous plants. ‘Bulbs’ is the common term used for the modified underground stems that bear excellent flowers. Whether it is a rhizome, a tuber, a corm or a bulb, they are all referred to as bulbs.

Nature has given these plants a mechanism to fight adverse weather conditions as they preserve food in their succulent parts and ‘sleep’ to wake up again in favourable weather. Bulbs can be used for a varied kind of locations and purposes. They can be used with effect for edging, for mass effect, for magnificent blooms, for indoor cultivation and display or for outdoor planting.

There is a wide range of species that can be grown here. With the new found love for flowers in general, a few bulbous species have found favour with commercial growers too. Now as the time for planting for winter bulbs is over, let us talk about a few summer plantings.

During early May, one comes across giant trumpet-shaped flowers borne at the top of deep green strap shaped, about a foot and a half high plants. This is amaryllis lily. It is available in a wide range of hues like pink, red, snow white, creamish, pale pinkish red, orange scarlet and many more. It is also an excellent bedding plant and cut flower.

Football Lily (see picture) is another ‘out of this world’ bulbous plant that is grown both for its foliage and blooms. True to its name the blooms form a perfect round shape as a pleasant combination of red and yellow. They are very attractive and appear before even the foliage. At that time it becomes a thing of curiosity. When once the blooming is over, the foliage, equally ornamental, appears. The stay of the bloom is also very long.

If you are looking for mass effect in the garden or under a tree, may be in partial shade, zephyranthes lily is the answer. The blooms appear in large number and are prized for filling the complete bed simultaneously. The blooms are available in three colours, white, pink and yellow. The plant hardly grows to a height of a foot or so. It is thus very suitable for planting at the window sills as it does not block the outside view.

Hemerocallis, also called Day lily is another important lilies for summers. It is very suitable for planning near the pools or shrubbery. The blooms appear in April-May, the time when there is hardly any other bloom to soothe the eyes.

The flower colours may vary from light yellow to deep yellow, orange purple or red. Hymenocallis is another lily for summers. It is also suitable for planting near lily pools. The plants, however, grow tall, about two feet or so. It is also suitable for planting along paths. It is also grown commercially. Individual flowers are also used in garlands.

One very unusual bulbous plant is Hedychium. It belongs to ginger family and bears creamish white flowers at the terminals of about two feet high plants. They are fragrant too. The plant looks like ginger plant.

The writer is a senior horticulturist with Punjab Agricultural University and can be contacted at 



UAE construction firms in grip of minimum-wage fear

The proposed move of the Indian government to fix minimum wages for unskilled workers in the Gulf Cooperation Council (GCC) states has caused concerns among the construction companies in the UAE, as the budgets for the ongoing projects have been estimated on the basis of the existing wages. India announced 100 Bahraini Dinars (Dh976) as minimum wage for unskilled workers in Bahrain last week and a similar announcement is expected for the rest of the GCC countries (UAE, Oman, Kuwait, Qatar, Saudi Arabia) shortly.

Following India’s decision, it is learnt that the other South Asian countries are also mulling over setting the minimum wage for its workforce in the Gulf.

Construction firms say fixing the minimum wage for unskilled workers would have major implications in the market. However, they cannot go for the other option of hiring workers from other countries due to linguistic and unavailability issues.

N.M Noushad, HR manager of Dubai-based Wade Adams Contracting Company, said, “The construction companies have already calculated the budget for labour wages for the ongoing projects. If the fixed minimum wages are more than those estimated in our budgets, they will have an adverse effect on us.

“It will be difficult for construction companies, especially small companies, to handle the situation. However, we will wait and see what decision that comes up,” Noushad told the Khaleej Times.

Biju Ninan, CEO of Grey Matter Construction Company, said, “The decision to fix minimum wages will definitely affect the budget of many companies. It would be difficult for companies if they are looking for cheap labour from other countries like China, Vietnam or African nations because of non-availability and linguistic barriers.

“Now, companies are forced to revise their provision for wages in their budget. It will impact the cost factors of construction,” he added.

Abdul Majeed, manager of Power Construct, said, “The minimum wage system will have its ripple effect in the market and the cost of construction will shoot up. This will affect the real estate market also. However, I appreciate the decision as it would ensure some standard of living for the workforce.” Meanwhile, the workers have welcomed the move saying that it will assure them of a standard salary which enables them to save some money to send back home. “We are hopeful that the government will fix the minimum wages according to the cost of living. It will ensure we save some money at the end of every month,” said Jissmon, a worker at Al Quoz. — UNI



Realty Bytes
DAMAC roadshows

Mumbai: DAMAC Properties, Middle East’s largest private sector master developer and luxury lifestyle provider, will be showcasing iconic properties through road shows across India. The company, in a release here, said the roadshow which kicked off from Delhi and had a presentation in Ahmedabad, would be held in Mumbai between February 14 and 20 and move to Bangalore in the final lap. DAMAC Properties would be showcasing its luxurious developments from across the UAE at these roadshows. — UNI

Usha group enters realty biz

Kolkata: Kolkata-based business conglomerate Usha Martin Group floated a new company last week to venture into the realty and infrastructure business with an investment of Rs 2.5 billion ($60 million). Usha Martin announced the launch of the newly formed Usha Breco Realty Pvt, a company headquartered in Mumbai, a top company official told reporters here. The company will focus on joint ventures for property development under a revenue sharing arrangement. Usha Breco Realty will implement projects worth about Rs 2.5 billion. The projects include a multi-tenanted IT building in Kolkata for around Rs 750 million. — IANS