The holy trail is dotted with big realty brands as 17 big malls and hotels are under construction, write Sanjay Bumbroo and Ashok Sethi
Golden growth

Construction work in progress on a mall in Amritsar.
Construction work in
progress on a mall in Amritsar.

The coming years will witness a transformation in the skyline of the holy city of Amritsar as a large number of malls and hotels are set to come up for the 12-lakh plus population.

This trend has been spurred by the interest large retail chains have evinced in opening their designated stores across the city and in the suburbs. At present, 17 malls and hotels are in different stages of construction throughout the length and the breadth of the city and are likely to be completed by 2010.

Mega mall chains like Omax, Ansal API, Emmar MGF, Celebration, Alpha One and Today Homes have already started construction in a big way to complete the projects on time.

The floor rates offered by these prestigious malls range from Rs 10000 to 15000 per square feet, depending upon the location and floors of the commercial complex.

Vishal Mehra, a leading property consultant and a hotel owner, says that all the chains are vying with each other to get the best brands, including food courts, to be part of their mall and have offered competitive rates. He says that the city has emerged as a hot property zone, in the hope that one day Indo-Pak border would be opened, giving free access to trade and travel.

Mehra says that the city of the Golden Temple has been rated as the sixth-most visited place in the world with a large number of tourists flocking here from all across the country and abroad. According to a survey conducted by various NGOs, 50,000 to 70,000 people visit the city to pay obeisance at the holy shrine and visit the Attari/Wagah joint checkpost.

The devotees and tourists have given a big fillip to the retail, food and other segments of business and today, the city has emerged as a throbbing commercial centre, likely to regain its old glory of pre-Partition days.

The major malls under construction are on the Airport -Ajnala road, the Mall Road and Batala Road, besides a major mega project being in progress on the Amritsar-Jalandhar GT Road. The 17 malls which are underway are likely to be sold out by next year, attracting a number of top international fashion brands and food chains to cater to the upwardly mobile prosperous Punjabis.

Four major hotel chains, namely the Marriot, Raddison, Holiday-Inn and Alpha One (a seven star hotel), are some of the hospitality brands that have already started projects likely to be completed by next year to cater to the discerning business travellers and the rich Punjabi NRI diaspora.



City rents travel north
There’s been a rise of over 300 per cent in rents during
the past three years
Pradeep Sharma

Commercial rents
in Sector 17

Year Rent sq feet

2006 Rs 200

2007 Rs 400

2008 Rs 700

Residential property

Dimensions Rent per month (floor wise)

1 Kanal Rs 25,000 to Rs 40,000

10 marla to 14 marla Rs 15,000 to Rs 20,000

7 marla to 10 marla Rs 10,000 to 15,000

Landlords’ lament

Owing to their influential position in society, advocates, policemen and journalists as tenants seem to be the landlords' nightmare. To avoid the lengthy litigation involved in getting houses vacated from them, a large number of landlords, particularly NRIs, prefer to keep their premises vacant. In fact, the 2001 census estimated that
about 20,000 houses in the city were kept vacant for fear of being illegally occupied by tenants.

Commercial and residential rentals have hit the roof in Chandigarh, the architectural wonder created by Le Corbusier. Primarily created for government employees and the common man, City Beautiful is slowly going out of the reach of these very sections as far as rents are concerned.

In fact, the heart of the city and commercial hub, Sector 17, has seen the rentals skyrocket with the entry of big corporates. The readymade garment brands in Sector 17 have particularly contributed to putting the city rentals far ahead of other places.

However, the unprecedented hike in rents is a recent phenomenon. In the last three years, there has been an increase of over 300 per cent. While the rate per square feet was quoted at just Rs 200 in 2006, the figure doubled to over Rs 400 the next year.

Now, the prevailing market rate is quoted at over Rs 700 per sq ft in the plaza area.The renting out of a showroom to a major garment company for over Rs 20 lakh per month recently has taken observers by surprise.

Close on the heels of the commercial rentals, the residential rentals have also recorded a sharp increase, ranging from 20 per cent to 40 per cent over last year.

The spurt in rentals, which is substantially higher than other cities in the region, is on account of the craze of MNCs to have a brand presence in Sector 17, says Amarjit Sethi, a property consultant. The shortage of prime commercial property in the sector in view of the outdated bylaws is to be primarily blamed for the high rentals. Even southern sectors like Sector 43 are high on the radar of corporates. In Sector 43, a showroom was rented for over Rs 7 lakh a month recently.

The proliferation of retail chains like Subhiksha, 6Ten and Spencer in various sectors, fast-food joints and restaurants in Sector 26 and commercial firms in Sectors 22, 34 and 35 are responsible for the spiralling rentals in the city.

It is surprising that despite the Rent Act being heavily loaded against the landlords, the rentals have been going up in different parts of the city, particularly the posh localities. However, there is a wide variation in the rentals, depending upon the location, floors and quality of construction of the houses.

A random survey has revealed that each floor of a kanal house is available from Rs 25,000 to 40,000 per month. While the rents for 10 marla to 14 marla houses were quoted between Rs 15,000 and 20,000, the 7 marla and 10 marla houses are available from Rs 10,000 to Rs 15,000.The northern sectors were obviously costlier than the southern sectors though the rents are often negotiable, Tarlochan Singh Bittu, chairman of the Chandigarh, Mohali and Panchkula Property Consultants Association, says.

Another property consultant Inderjit Singh informs that the entry of the big corporates had pushed up the rental values up to 50 per cent in certain northern sectors where the companies feel privileged to accommodate their top executives.

While the higher income group prefers the northern parts, the southern parts from Sector 30 and beyond are a favourite with middle and lower classes. Thousands of Chandigarh Housing Board (CHB) flats are also a hit with these sections for their affordable rents.

In fact, better designs and location in sprawling complexes make the scores of group housing societies the new favourite the middle class. Sources say a Category "A" flat (four bedrooms) is fetching about Rs 10,000-12,000 as monthly rent. Similarly, the rental value of a Category "B" flat (three bedrooms) was quoted between Rs 5,000 and Rs 9,000, depending upon the location and quality of construction. The two-bedroom flat (Category "C") fetches between Rs 3,500 and Rs 4,500 per month.

Observers, however, say there is still a shortage of affordable accommodation in the city.This holds particularly true in view of the fact that over 21,000 persons applied for 1,976 dwelling units for the Sector 63 scheme floated by the Chandigarh Housing Board recently.This, despite the high prices and stringent conditions for applying for the dwelling units under the schemes.



High jump to slump
The real estate business in Dehra Dun, capital of Uttarakhand, is today passing through a severe recession. According to real estate dealers, the current situation is extremely bad and there are hardly any buyers.
Umesh Dewan takes a look at the reasons behind this recent slump and finds that the BJP government's decision to reduce the permissible limit for outsiders to buy property, from a maximum of 500 sq m to 250 sq m, has proved disastrous.

Nestling in the Himalayan foothills close to the hill station of Mussoorie, Dehra Dun, a premier educational and institutional centre, with its serene environs has always been a favoured destination.

After attaining the status of the capital of Uttarakhand, property (both commercial and residential) started selling like hot cakes here and land prices witnessed a drastic increase of five to six times. In view of the property boom, many people dealing in real estate from Punjab, New Delhi and Uttar Pradesh headed for Dehra Dun to have a share of the realty pie.

In the posh residential and commercial Rajpur Road area in Dehra Dun city, the circle rate witnessed a hike from Rs 13,000 per sq m to Rs 50,000 per sq m. The rates induced a steep hike in the property prices in other city areas and in the rural areas as well. Further information gathered from those dealing in the sale and purchase of property revealed that till early last year, the real estate business was going extremely well and land prices were appreciating at constant intervals.

"The boom in property, however, suffered a major jolt after the Khanduri government took over the reins in Uttarakhand and reduced the outsiders’ limit to buy property from 500 sq m to 250 sq m. In the aftermath of this announcement, the sale and purchase of land in Dehra Dun, which was unprecedented till then, came to a virtual halt, with nobody showing an interest in purchasing land here," says Balbeer of Nanak Associates, a real estate consultant.

Likewise, the restriction imposed by the BJP government that for those hailing from outside Uttarakhand, only one member of a family would be allowed to purchase agricultural land measuring 250 square metres had an adverse effect on the sale of farms as well. "Though there is not much dip in the land prices, the fact is that there is no buyer. If at all the government wants to restore buoyancy in the real estate market, it should review some of its decisions", asserts S. Rawat, a real estate agent located on the Rajpur Road.

Falling for flats

While the real estate sector is passing through slump these days, the residential development in Dehra Dun, which till few years back had only seen growth in plots, is now witnessing an apartment boom with a number of local and outside builders actively engaged in the construction of multi-storeyed flats. According to information, HIG and MIG flat apartments have come up in various city areas, including Mohini Road, Balbir Road, Old Survey Road, Shastardhara Road, Kalidas Road etc.

Besides, at the moment, more than a dozen projects of luxury apartments are under construction. "The flat culture is picking up in Dehra Dun. Nowadays, people prefer to own a flat considering that it is more secure," feels Inder Raj Kohli, a property dealer. For instance, the Dalanwala locality, which was very quiet a few years back, today has several apartments like Green View Silver Rock Apartment, Ganga Apartment and Windlass Residency. Almost all flats in these apartments have been sold out.



Simply Spanish in Chennai
Arup Chanda

The Alliance Group, a Bangalore-based real estate developer with over Rs 2,250 worth of projects in hand, has announced its entry into Chennai with the launch of Bougainvillea, an upmarket 300-villa project at Porur, on the outskirts of the city. Spread across 25 acres and situated strategically close to the Porur junction off Poonamalle High Road, the Rs 200-crore project will have tastefully-designed Spanish style villas with a fully-equipped clubhouse offering an exclusive, contemporary and luxurious lifestyle.

These include leisure facilities like a swimming pool, gym, health club with sauna and steam baths, squash and tennis courts, billiards and snooker rooms, children’s playing area, table tennis, chess, party hall, barbecue area and amenities like grocery store and ATM.

The chairman and managing director of Alliance Group, Manoj Namburu, says these “villas with a warranty” will be the first of their kind in Chennai. Set amid lush, well-manicured gardens and landscape, Bougainvillea’s airy Spanish villas will redefine the finest in urban living in Chennai.

As it is located in close proximity to L&T’s headquarters and DLF’s SEZ project on the only approach road to the bustling industrial hub of Sriperumbudur that houses MNCs like Nokia, Saint Gobain, Flextronics, Schwing Stetter India, Hyundai, this gated villa project is expected to meet the growing demand for international lifestyle living from Chennai’s corporate world, he points out.

Bougainvillea is planned as an amalgamation of good architecture, perfect designs, impressive aesthetics and world-class lifestyle. The highest quality materials will be sourced for its construction along with the best quality finishes and fittings, Namburu said. The plot sizes of the villas in the fully-secured gated community of Bougainvillea range from 2,000 sq ft to 3,500 sq ft in three to five-bedroom configurations. The cost of the villas range from Rs 65 lakh to Rs 2 crore, he adds.

A well-structured payment plan has been put in place for the project, which has been pre-approved for loans by the ICICI, HDFC, Bank of Baroda and Alllahabad Bank, said A.R.P. Raman, vice-president, marketing and sales.

Namburu said Bougainvillea was the first of the three mega projects that Alliance had planned in Chennai. It would be shortly launching a 20-acre integrated township project, Orchid Springs, at Padi, near Anna Nagar. The project consists of 1,100 ultra luxury apartments, a 2.5 lakh sq ft of software park, a mall and a four-screen multiplex, and it would cost Rs 500 crore.

Alliance is also poised to launch a 4 million sq ft IT-specific SEZ near Pallavaram off the OMR-GST junction, which would be put up at a cost of Rs 1,400 crore. “We are in Chennai for the long term with upmarket real estate products that will forever change the city's lifestyle living,” Namburu says.

K. Sriram, head, Corporate Communications, and PR, Alliance Group, said the first phase of the Bougainvillea project would comprise 150 units which would be ready in 24 months’ time. H.S. Chandrasekhar, CEO, said Chennai had shed its conservative image and was keen on promoting aesthetically good projects. The company will also take up a project in Coimbatore (on a 13.5 acre site) in association with Lakshmi group. In Mysore , it will take up the task of building an integrated township on a 250-acre site, providing for low-rise apartments, Namburu adds.



Realty Trusts will ring in transparency: Assocham

In a bid to bring transparency in real estate industry and put a leash on spiralling prices, an early introduction of Real Estate Investment Trusts (REITs) is required.

Industry body Assocham has communicated this to the Securities and Exchange Board of India (SEBI), stating that REITs can also help develop Commercial Mortgage Backed Securities (CMBS) market and create a source of cheaper debt for commercial real estate.

“Since the purchase and sale of real estate assets would form part of the activity of REITs, the presence of a large number of REITs can enhance liquidity in the secondary market for commercial real estate,” Assocham president, Venugopal N. Dhoot said in a statement issued in New Delhi recently.

The increase in liquidity would make the sale of assets, if necessitated in the CMBS structure easier, thereby improving the attractiveness of CMBS, he added.

The chamber has further pointed out that principal repayments to CMBS investors are made through refinance or sale of property, hence the enhanced liquidity in commercial real estate will make CMBS more viable, in terms of availability of refinance and quicker sale of property.

However, in the case of CMBS originated by a REIT, the REIT would own the property. As a financial investor, the REIT would be more inclined to let the CMBS trust enforce the mortgage and sell the property.

The REIT’s franchise with its unit holders would improve if it cuts its losses from a property that did not provide adequate returns.

CRISIL expects the legal risks associated with taking possession of and selling mortgaged properties to reduce considerably in case of properties owned by REITs.

REITs typically own a variety of real estate properties, often even across geographies. Thus offering a pool of well-diversified properties of CMBS. “This, results in a better spread of risks as compared to a regional developer who offers mortgages on a few similar properties often located in the same market space. Diversification will rescue the investors’ overall market which will therefore improve the investment characteristics of CMBS and provide REITs with easier access to lower-cost debt funds,” the statement from the chamber said.

Globally, the REIT industry has grown dramatically in size and importance. Tax benefits, and the ability that REITs give to small investors to access the real estate market, have been instrumental in REITs becoming increasingly popular in the USA.

An important feature of US REITs is that they do not have an upper limit on leverage. To provide leveraged returns to unit holders, REITs borrow both in the form of unsecured debt and CMBS, the statement added.

“REITs can play an important role in the development of CMBS. One of the main risk factors in CMBS is the legal process involved in enforcing mortgages on defaults by developers. The repossession and sale of property involves a legal process, which, in Indian conditions, may delay repayments to CMBS investors. This risk becomes even more pronounced when developers also own the property mortgaged,” the statement said.

Developers may be influenced by franchise-related issues, and may not want to alienate the property even when unable to repay debt; they may then resort to legal means to stall the sale process, it added.

The US still accounts for over half of the global REIT market (53.2 per cent) although this percentage has been declining as a result of conversion of public REITs to private REITs in the US and REIT IPOs elsewhere.

The growth and increased profile of REIT markets has led to an increased level of specialist Global REIT funds being launched. — UNI



Choosing chinaware for bathrooms
Sink your money, but in the loo
Jagvir Goyal

Vitreous chinaware is the universally used material for bathroom fixtures in view of its characteristic of remaining perfectly clean and sparkling even after years of use. However, the presence of countless manufacturers of bathroom fixtures who are never short of innovative ideas has made it difficult for the user to finalise a fixture or its brand. Well, here are a few guidelines to help you:

Check glazing: The most important item to check in vitreous chinaware is its glazing. Always choose ‘first quality’ products. Don’t go for ‘commercial quality’ products. All chinaware products carry first quality/commercial mark on their backside. No visible difference can be seen in first quality products and commercial products. But the glazing of commercial products fades soon. Saving 10 to 15 per cent cost by using commercial products proves dear at a later stage. Top- bracket chinaware fixtures include Keramag, Geberit, RAK, Duravit, Hindware. Parryware, Liberty and Cera.

Sink styles: Earlier, the practice was to use wash basins of 25”x18” or 22”x16” size only. Their availability itself was a novelty and no artistic presentations were expected. These days, wash basins of all sizes, shapes and colours are available in the market. These can be divided into three categories: Wall hung, pedestal supported and counter supported.

Further, among the counter supported ones, it can be an under-counter or an over-counter wash basin. In under-counter wash basins, the counter overlaps basin rim. In over-counter ones, the rim projects above the counter. In under-counter basins, any liquid spilled over the counter can be easily mopped into the basin. The present trend is of counter- top wash basins. The round and oval shape bowls are the best to fit in counter tops as their lipping rests on the counter top easily and firmly.

Washbasin basics: While choosing wash basins, see that the manufacturer is a reputed one. Choose a shape and size suitable for the bathroom size. Rectangular wash basins remain the preferred ones. Even triangular wash basins are available now to fit in a corner if less space is there. For wall-hung basins, look for stud holes at the back of basins for their secure fixing over brackets. See that there are no cracks or scratches. The waste hole should be of 2.5" diameter at least.

Look for first quality. Avoid commercial quality. See that the glazing looks good visually and full shine is there. Try the working of a similar wash basin fixed for demonstration and see that water does not splash out when the pillar tap is fully opened. These days, circular or oval- shaped glass wash basins are also becoming popular. As their cost is very high, these can be chosen only if your budget permits.

Supporting brackets: Don't be careless while buying supporting brackets for wash basins and sinks. Choose Cast Iron (C.I.) brackets. See that they have a lugged portion of 4.5" to 5" length and 3" depth with a slot at the centre. This is embedded in the wall. If such brackets are chosen which are to be screwed to the wall, watch for a plate with holes for screws fixed at the ends of brackets.

Prefer embedded brackets for strength. Each bracket should weigh from 1.8 kg to 2.0 kg. Look for IS 775 mark. Look for 12 mm studs of 5mm height at outer ends of brackets for adjusting them into the recess made in the wash basins. All brackets should have a minimum clear length of one foot.

Bottle traps: Choose to provide CP brass bottle traps below the wash basins instead of loosely hanging PVC waste pipes. The chosen bottle trap should have a seal of 40 mm at least. Further , see that it is of detachable type so that it can be removed and cleaned regularly to avoid clogging. Reputed brands of bottle traps like Nova, Essco cost around Rs 550, while those of BSP, Lion make are in the range of Rs. 250.

Indian seats: While choosing Indian WCs, check their make, first quality and IS2556 mark. All colours are available these days to have a combination with chosen tiles. Check that the pans have sufficient slope not less than 150 to the horizontal towards the outlet for easy and quick flushing. Foot rests must be of minimum 10”x5”x1/2” size to provide full bearing to the feet. When the foot rests are not separate but an integral part of the seat itself, the WC is called Orissa pan. Foot rests may be flush with the top of WC or raised ones, as per requirement of the user. Indian seats are also called squatting pans.

For Indian WCs also, P or S traps may be supplied separately or may be an integral part of seat as in case of English seats. Prefer seats with integrated traps. See that the water seal of the traps is minimum 50 mm. If a P-trap is used, it must have a downward angle of 140 to the horizontal. If separate traps are chosen, see that the traps too are IS 2556 marked. That should ensure the water seal and inclination requirements. Note that even for integrated seats, S-trap may be in 2 parts, one part integrated with the seat and second part in shape of a bend to be jointed at site.

Fixing Indian seats: While fixing Indian seat pan in position, always take care that the space between the pan and the concrete base provided below it is fully filled with concrete and no hollow space is left there. Otherwise the pan will develop cracks very soon.

Universal seats: Besides English seats and Indian seats, another type of seats available in the market are Universal seats. These seats combine the benefits of both the Indian as well as English seats and are called Anglo Indian seats also. These seats are raised ones like English seats and also have foot rests integrated with them for squatting over them like Indian seats.

Choose these seats if you want to however using these as English seat is sometimes uncomfortable for people because of the integrated foot rests. The height of these seats above floor level is 380 mm, just 10 mm less than that for English seats. Look for IS 2556 mark for these seats.

Fixtures for kids: If you are creating a special bathroom for children, prefer half pedestal wash basins. Pedestals of half-pedestal washbasins don’t rest on floor, are hung type and yet have a height that is convenient for children. Also use special WC with a concealed cistern. Children have to just press a knob to release water. Choose seat lids in fancy colours and with motifs. Don’t forget to install toilet paper holder and towel rail at a lower height convenient to children. Flushing cisterns and English seats shall be discussed in the next article. Till then, happy building!

The writer is Deputy Chief Engineer, civil in PSEB and can be contacted at



Realty BYTES
Omaxe to build 10 lakh affordable homes

New Delhi: At a time when the burgeoning middle-class and high income people are becoming preferred target for property developers, realty firm Omaxe has lined up a $ 20-billion (Rs 80,000 crore) investment to develop 10 lakh "affordable" homes for low-income consumers.

The company is planning to offer these housing units, to be developed in the next five years, in a price range of Rs 3-15 lakh per flat, sources said. However, these units may not come up in metro cities like Delhi and Mumbai due to high land costs and the company is rather targeting Tier-2 and 3 cities such as Sonepat, Nimrana, Bhiwadi, they added. BSE-listed Omaxe has set up a new subsidiary 'National Affordable Housing and Infrastructure Ltd' to develop these affordable housing units. Omaxe chairman and managing director Rohtas Goel confirmed the development and said: "We will deliver 10 lakh affordable housing in the next five years".

However, he did not wish to comment on the investment figures. "Affordable housing is a big issue in the country. There is a shortage of 24 million housing units in the country, majority of which are in economically weaker section, LIG and Janta flat segments," Goel said. The project cost for developing 10 lakh units would be about Rs 80,000 crore at an average cost of Rs 1,000 per sq ft on land, construction and marketing, sources said.

The Delhi-based company plans to develop one lakh units in the current fiscal on the existing land bank and would start rolling out projects from July this year, sources said. In the first phase, Omaxe would come up with such project in tier II and III cities of north India and would later expand it to other parts of the country. — PTI

Paramount Group to invest Rs 1,100 cr in housing

New Delhi: National capital-based real estate developer Paramount Group is understood to have decided to invest about Rs 1,100 crore in three projects over the next two years. The company is developing a group housing project — Paramount Symphony — in the upcoming integrated township, Crossings Republik, in the national capital region, spread over 360 acres of land.

A company source said here recently that it is likely to invest over Rs 730 crore in developing 850 flats in the 8.5-acre project, which is expected to be ready by 2010. It would construct six towers of 22 storeys each. The Paramount Group is one of the partners in 'Crossings Republik', which is being developed by seven NCR-based real estate players. In the township, the company is also developing another 15 storey residential tower, which is likely to be completed at an investment of Rs
135 crore.

Besides, Paramount Group is developing a 100-acre integrated township at Saharanpur, which could entail an investment of about Rs 230 crore, the source said. The township — Paramount Tulip — would comprise 500 plots and 100 villas and would be handed over to customers in the next 18 months. When contacted, Paramount Group Executive Director Ashani Kumar said: "In all the three projects, we are expecting a realisation of Rs 1,200 crore within next two years. And it is about 10 per cent of our total investment." — PTI

1 pc duty on luxury homes on anvil

Thiruvananthapuram: The LDF Government in Kerala has plans to impose one per cent duty on construction of luxury homes to beef up funds for housing schemes for the poor. Announcing this at a press meet in the town recently, state Housing Minister Benoy Viswam said a legislation in this regard would be brought in. Details like the limit of construction cost above which the duty was to be imposed would be decided after studying various aspects of the proposal, he added. — PTI



Not homes alone
Real estate major, Uppal Group, will be pumping in over Rs 10,000 crore in the next three years into various residential, commercial, hotel and SEZ projects in the region. In an interaction with Ruchika M. Khanna, the general manager- marketing, Uppal Group, Manish Moza, talks about the various projects and how the group is moving from boutique properties to residential complexes for the common man.

Q. What are the main projects of your company?
A. We are coming up with six residential projects- two in Gurgaon and one each in Dwarka, Faridabad, Chandigarh and Mumbai. Besides this, we are coming up with three commercial projects in Gurgaon and one each in Chandigarh and Jagadhri; and two hotels (Chandigarh and Gurgaon).

Q. Tell us about the Special Economic Zones being developed by your company.
A. The SEZs are one of the most ambitious projects being set up by the group. We are developing an SEZ on National Highway 8 in Gurgaon, spread over 269 acres, and another IT SEZ in Gurgaon spread over 26 acres. Besides, we are coming up with a Knowledge Park in Greater Noida and another SEZ in Noida. Together, the group will be pumping in Rs 8000 crore for the four SEZs.

Q. Uppals are known for their boutique properties. Any plans to reach out to the middle class?
A. Indeed, we are now focusing on creating properties for the upper middle class. A group housing project with 700 units is coming up in Faridabad, while another one is coming up in Gurgaon.


Tax tips
Rights and wrong
S. C. Vasudeva

Q. I have a property problem in my family. I am the youngest sister of two brothers. My elder brother became a saint and lives in an ashram. My second brother got married to a woman who’s quite money-minded.

Now my father is living in the house made by my grandfather along with my second brother, his wife, a son and daughter. After his marriage, my brother does not want me to come to that house to meet my father also. He says that house now belongs to his son and I have no right over it. Do I have any right on that property?
— Sweety, Meerut

A. The facts given in the query do not indicate whether the house property inherited by your father from his father was a HUF property or a self-acquired property. In case it is a family property you can claim partition in accordance with the amended provisions of the Hindu Succession Act, 1956.

However, if it is a self-acquired property, your father has a full right to dispose the said property in the manner in which he likes. You can claim a share in it after his death, provided the property is not a subject matter of a Will executed by your father.

Taxing task

Q. I am working as lecturer in a college in Punjab. I had purchased a plot jointly in my name and that of my wife (who is also working) for the sole purpose of constructing a house in next 2-3 years. For purchasing this plot, I and my wife had taken a housing loan jointly from the State Bank of India, which we are repaying in instalments. Can we claim a rebate in income tax in this context, and if yes, then under which clause and in what ratio between us?
— Munish Gupta

A. Section 80C of the Income-tax Act 1961 provides for the deduction of the amount paid towards the repayment of the amount borrowed by an assessee for the purchase or construction of a residential property, the income of which is taxable under the head “income from house property” or which would, if it had not been used for assessee’s own residence, have been chargeable to tax under that head.

The above deduction is allowable within the overall limit of Rs 1 lakh provided by the aforesaid section. The repayments made toward the amount borrowed for the purchase of a plot would thus not be deductible under the aforesaid section. In my opinion there is no other section which allows deduction for the amounts paid towards the repayment of loan borrowed for the purchase of a plot.

Retain capital gain

Q. My parents have 2 plots in different locations, bought way back in the 1990s. I want to construct/buy a house worth approximately Rs 50-55 lakh. I am entitled to a home loan of Rs 17 lakh only.

The current value of all above four plots is about Rs 40 lakh and my parents are ready to sell to give me the money. Please advise, what I have to do in this regard, so that I/my parents may save long-term capital gain and the whole sale proceed may be utilised to construct/buy the house.
— Gopal Gopala

A. The capital gains tax on the sale of four plots can be saved only if the net consideration realised on their sale is utilised for the acquisition/construction of a residential house within the specified time. Therefore, in case you desire that your parents should not be liable to pay capital gains tax, the net consideration realised on the sale of such plots should be utilised for the acquisition of a residential house within two years of the date of the sale of plots or for the construction of a residential house within three years of the date of the sale of plots.

Such a house will have to be in the joint name of your parents as the plots, according to the facts given, are held in their names. The balance amount of Rs 10 to 15 lakh required for the acquisition/construction of the house can be financed by you. The residential property so acquired/constructed can thereafter be gifted to you. Alternately, your parents can execute a Will in your favour. Such a Will shall take effect after their death.



Indiabulls Real Estate allots 1.6 cr shares

Indiabulls Real Estate has said it has alloted about 1.6 crore equity shares representing the same number of Global Depository Receipts towards acquisition of London-listed Dev Property Plc.

The equity shares having a face value of Rs 2 each has been issued pursuant to the Scheme of Arrangement for the buyout of Dev Property Development Plc, an Isle of Man registered company, Indiabulls Real Estate said in a filing to the Bombay Stock Exchange in Mumbai.

Following the issue of 1,66,85,580 shares, the paid-up equity share capital of the company has increased to Rs 51,50,41,292 divided into 25,75,20,646 equity shares of face value Rs 2 each. Shares of the company closed at Rs 554.40, up 2.47 per cent on the BSE. — PTI

No change in property tax: MCD

The MCD has said it would effect no changes in property tax rates, rebates and concessions during the 2008-09 financial year. The civic body will maintain status quo on property tax rates which were prevalent during 2007-08, it was announced at a joint press conference by Mayor Arti Mehra, Leader of the House Subhash Arya and Standing Committee Chairman Vijender Gupta in New Delhi on Thursday.

The concessions for property tax-payers will continue during the current financial year, the senior functionaries of the MCD said giving details of rebates for senior citizens, women, physically challenged persons and ex-servicemen as also the necessary terms and conditions for availing them.

They said people willing to avail of the rebates should file the property tax returns manually in the Property Tax Offices of their respective zones. The on-line system can be used only if none of these rebates are required to be availed, they said.

The civic agency has said that if property tax is paid by June 30, the taxpayers will be eligible for various incentives like 15 per cent rebate on lumsum payment of tax, additional 20 per cent rebate for co-operative group housing societies and 40 per cent rebate for government-aided schools. These three rebates can be availed even on on-line system, the MCD said. — PTI