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Private colonisers
ignore quake threat Private colonisers on the periphery of Chandigarh are blatantly
ignoring warning by experts that the seismic activity in the Chandigarh
region - falling under seismic zone IV - has already entered its ‘return
phase’ and an earthquake could strike anytime.
The guidelines of the National Building Code 2005 and implementation of
the UNDP disaster risk management, supported by the Ministry of Home
Affairs, are best being implemented on papers, lament experts dealing in
designing of seismically-safe buildings. There is also a government agency
working to enforce the guidelines on ground.
Architects are adding features like swimming pool at the rooftop,
parking at the ground floor, large windows and not enough space on all
sides of high-rise buildings. “These additions make building unsafe. None
of the architects or civil engineers has been trained to design
structurally safe buildings strictly within the ambit of the National
Building Code. Efforts are being made to train architects through various
courses now,” said Mr Jeet Kumar Gupta, a retired Senior Town Planner
(STP) with the Punjab Town and Country Planning Department.
It may be mentioned that experts from the IIT Kanpur have pointed out that the city and its neighbouring towns of Mohali and Panchkula were within few kilometres of the fault lines passing in the lower Shivaliks. Some of the fault lines pass beneath an inhabited area in Pinjore. Architects and civil engineers, who designed and constructed the buildings, had no formal training in the subject. While designing buildings in Chandigarh, Mohali and Panchkula no attention was paid to make these resistant to earthquakes. Due to this reason, the buildings, especially the high-rise buildings should adhere to the building code. A number of towns of Punjab also fall in the seismic Zone - 4, which, is considered to be facing highest danger of earthquakes in India after the Zone-5, comprising certain areas of the Himalayas. The past record of seismic activity of the region indicates that an earthquake strikes after a gap of 500 years. As many as 600 years have already passed since the last major seismic activity. Putting lot of steel alone does not make a building safe. Certain compromises have been made about the safe designs for the sake of aesthetics, feel experts. Though seismically-safe buildings are in vogue in the region after increased awareness about vulnerability of the area to deadly quakes during the past about four years, but when it comes to designing a building a number of compromises are made. It is high time that the respective state governments sit together and implement the UNDP disaster risk management programme. Under the programme, the state governments have to conduct a study of the earthquake-resistance capability of the important buildings and conduct drills of the disaster management plans. Experts, who have been monitoring the seismic activity in the region, say there is an urgent need to upgrade the capabilities of the professionals through continuing education. The Indian Institute of Architects (IIA) has been playing a key role in the implementation of the disaster risk management programme. Under the disaster risk management programme, the state governments
have been asked to identify the buildings, including heritage monuments,
which could be damaged due to an earthquake. Under the seismic zoning, the
shapes of buildings and structural designs had been well defined but
ignorance among the professionals delayed the implementation of the
specifications. The level of ignorance on “behaviour” of buildings during
an earthquake was high among the professionals. According to new zoning,
there are Zones II, III, IV and V. The last zone, V, is most prone to
calamity and the unsafe zone.
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Rate hike to prick
housing bubble, says RBI
Ahead of its quarterly policy review, the Reserve Bank has expressed
doubts on the efficacy of “pre-emptive” raising of interest rates to prick
a housing bubble.
“...There is a need to carefully evaluate consequences of monetary
policy actions, specially when the housing market is seized by price
bubbles. Raising interest rates more than what is required for overall
price stability purposes may prove to be counterproductive,” the RBI said
in “Occasional Papers.”
Such a policy could also be potentially damaging for other sectors in
the economy, the central bank said in a chapter on “Identifying Asset
Price Bubbles in the Housing Market in India-Preliminary Evidence.”
The papers have been issued at a time when several commercial banks
have expressed the view that there should not be any further hike in
short-term rates to contain inflation, which has crossed five per cent
mark.
The bankers argue that with oil prices falling and seasonal factors
tapering off, the Reserve Bank should not hike rates as it may impede
high-growth momentum.
The RBI study said direct measures taken for demand compression may be
less worthwhile than sectoral measures such as withdrawing or reducing
regulatory accommodation.
As a pre-emptive measure, the RBI, in its annual policy statement for
the current fiscal, had increased general provisioning for residential
housing beyond Rs 20 lakh and commercial real estate from 0.40 per cent to
1 per cent.
The banks will now have to set aside Re 1 for every Rs 100 loan given
for the housing sector beyond Rs 20 lakh against the earlier requirement
of 40 paise.
The risk weight on bank exposure to commercial real estate had also
been increased from 125 per cent to 150 per cent.
The study sounded a word of caution on the dangers of building up of
systemic credit risk and the instability of the financial system as a
whole from the rising level of loans taken by families in India for
housing and other retail finances.
The study said concerns regarding the sustainability of increasing
growth in housing and other retail financing by financial institutions now
appear to be arising given the increasing load of household debt.
Though India has not so far experienced the pangs caused by bursting of
bubbles in the housing sector, the need to take pre-emptive policy actions
can hardly be overemphasised in the light of the experience in other
countries, the RBI said.
“As part of calibrated policy response, the Reserve Bank has been
gradually nudging financial institutions to exercise due diligence in the
assessment of credit risks for exposures in the housing sector, while
increasing the regulatory risk weights/provisioning for housing and real
estate loans,” the study said.
The papers said the extent of speculation in the housing market is
subdued and is primarily supported by lower interest rates and easy
availability of credit.
On international scenario, the central bank said the strong upsurge in
the housing market in the US is a source of concern, especially for the
global financial market. — PTI
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Malls with a new
dimension With the popularity graph of malls and multiplexes soaring northwards
in Punjab several new projects have been lined up by different companies.
However, the stress now seems to be on futuristic theme-based malls so
that the footfalls do not ring hollow at the cash counters. The Punjabi
jet set is going to be wooed by mega brands through these mega-buck
projects with the developers claiming to add a new dimension to the
shopping and entertainment profiles in ‘sada Punjab’.
Mr Anuj Malhan, director, M/s Spirit Global Constructions Pvt Ltd, the
company that last month announced a Rs 2000-crore project of building 60
malls and multiplexes in Punjab, is keen to bring theme-based malls as
“this is the most effective way of beating competition,” he says. “We plan
to change the themes every four to five months to keep up the uniqueness
and customer interest,” he adds while disclosing that one project in
Ludhiana would be based on a European city theme while the other one will
have a 5-star hotel in it. All these 60 malls will be anchored by Pyramid,
the largest theatre chain in the country.
The cities selected in the first phase of development include Ludhiana,
Kapurthala, Muktsar, Patiala, Nawanshahr, Moga, Zirakpur, Hoshiarpur,
Bathinda, Amritsar, Ropar, Mansa, Jalandhar, Ferozepore, Sangrur,
Gurdaspur and Faridkot.
“Customer profile of each of these cities has been a major factor in
the conceptualisation and designing of these malls,” said Mr Malhan.
The company has already launched its project, Global Mall, located on
the Ludhiana-Jalandhar bypass. “This will be the first mall and multiplex
to be situated on this stretch,” said Mr Malhan. The mall will have a
hyper market, anchor store, 4-screen multiplex, night club on the rooftop
along with shops, restaurants etc spread over an area of 2,30,000 sq ft
and is expected to be completed by early 2008.
The company’s another mall and multiplex project on Ferozepore Road,
Ludhiana, having a total built up area of over 7,50,000 sq ft, is expected
to commence by December 2006. All 60 malls are proposed to be completed by
2010.
Making shopping affordable and exciting for everyone at these malls is
the major USP of Malhan’s project.
On the other hand exclusivity is what another project in Ludhiana has
to offer. “The malls have to do positioning and cater to niche segments in
order to create footfalls and convert footfalls into revenues,” says Mr
Ajay Nayar, director, FMI Developments. And this is the cornerstone of his
Rs 100-crore project, Silver Arc, which is coming up on Ferozepore Road,
Ludhiana. Set to be operational by end of 2007, this has brought the 100
per cent zoned mall concept to the industrial hub of Punjab, he tells,
adding that each floor will have a special purpose.
The mall, designed by renowned architect Sanjay Puri from Mumbai, lays
“special emphasis on positioning, visibility and circulation by providing
a large atrium, and placing the department store at the back of the mall
and the cinemas on top.”
PVR has planned a top-of-the-line six-screen multiplex for this
development, which will include upmarket ‘Gold Class’. Pantaloon will be
situated on three floors over an area of 40,000 sq feet.
Giving details Mr Nayar said, “The total development of over 3,00,000
sq feet will have an optimum mix of national and international shopping,
food leisure and entertainment. International and national brands like
Tommy Hilfiger, Calvin Klein and Fcuk will be brought to Ludhiana for the
first time and other brands like Nike, Pizza Hut, Costa Coffee, Woodland,
Archies, Sensa, Lilliput, Lee Cooper, too, are going to set exclusive
retail outlets in the mall. One floor will be completely dedicated to the
top designers of the country, including Suneet Verma, Tarun Tahiliani,
Kimaya, Rana Gill, Renu Tandon and Ashima-Leena, to name a few.”
It has placed international brands taken Tommy Hilfiger, Calvin Klein,
Fcuk, and French Connection on the ground floor while top Indian designers
mentioned above would be on the second floor.
Multi-level parking for 500 cars is going to take care of the parking
concerns of those visiting the malls. | |||
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Netting a house
through the Net To be able to understand the location of a property vis-à-vis other
facilities and infrastructure in the vicinity requires a lot of legwork,
as well as effort. You want to buy a house or rent it, but the catch is to
be able to locate the right one. In the process you spend hours looking
for your dream house in your dream location, the one that will suit your
budget as well as also has a school, a market place, a hospital, ATMs,
restaurants, movie theatres and medical help close by. Which means that
one Sunday, which you have somehow managed from your hectic schedule, may
just not be enough to be able to do so.
But now there is help at hand in the shape of this web and mobile
combine data with maps. The facility will not only help you understand the
location of the property which you want to rent or invest but also the
best way to reach it.
This facility of surfing the net and zeroing on the location with the
help of this website, www.MapmyIndia.com, is available at the ultra-zero
level for Delhi and the NCR region. As many as 163 cities in the country,
including Chandigarh, have been marked with 75 per cent detailing, that is
the street-level. And the company responsible for this first-time effort
in India, CE Info Systems (P) Ltd., is in the process of uploading the
information to make the detailing in other cities 100 per cent as well.
Besides this, five lakh villages have also been marked and 1.7 million km
of road length loaded on this effort, the map and data creation of which
took close to 12 years.
"MaymyIndia.com is India's only map enabled location based portal with
map and locational data of over 160 cities across India and across
5,00,000 villages. We hope to be able to add more and more cities on our
map, " Managing Director of CE Info Systems, founder of MapmyIndia.com,
Rakesh Verma, says.
This website is also designed to throw up the area around the house,
you have seen showcased on the real estate portal or what your real estate
agent has suggested, right on to your computer screen. It will also allow
you to evaluate distances of provided services with the ease of navigating
this information and doing an evaluation without having to step out of
your home.
Verma, says, "Forget point A to point B, Internet-powered maps are
moving from simple driving directions to richly layered landscapes of
living information. Today the question that seems to face real estate
sites, practitioners and the general public is how much impact Geographic
Information Systems (GIS) will have on real estate and other closely
related sectors."
He says that GIS has many applications in the real estate industry - an
industry inherently spatial in nature - enabling real estate professionals
and buyers of real estate both inter-city and intra-city to measure the
true impact of location. This will help make appropriate judgments in many
areas, including appraisal and market analysis, leading to greater
accuracy and timeliness of relevant information.
Drawing a parallel with other interactive map portals like mapquest.com
in the US and now Google Maps, Yahoo Maps, MSN Maps, CE Info Systems
launched MapmyIndia in 2004. "Maps enable extensive information and market
analysis of the surroundings," Verma says, adding "you can actually see
the real world as you understand it."
The website provides the real estate industry the power of locational
view through its zoomable maps." For example if I am looking for
information regarding Sector 17 in Chandigarh all I have to do is search
for it on MapmyIndia. Thereafter, you can search for ATMs, hotels,
restaurants, hospitals etc around the place," he says.
Similarly, if you are considering buying a property or renting it, the
decision process can be expected to become faster and less time consuming
if you have all relevant and usable information at your fingertips at the
click of a button. Apart from understanding the area around the place you
are interested in and its functionalities, the site also allows you to
calculate the textual driving directions with exact number of kilometres
mentioned both inter-city and intra-city.
"This facility will also enable you to know the exact driving distance
and driving route between your place of work and home. It also allows for
providing e-location, a way of letting your friends and relatives know
where you are located and how to reach you with last-mile directions to
your home in the maze of nameless roads and tiny 'galis'," he adds. | |||
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A bathroom is a
room too
Bathrooms are getting a lion’s share of the housing budget, with
accessories like bathtubs costing as much as Rs 6 lakh, says Sheveta Pathak
As emphasis on interiors continues to grow, bathrooms too have not been
left behind. The result is not only increased detailing but also higher
expenditure on bathroom 'essentials and accessories' like bathtubs.
A global company offering bathroom products recently launched a bathtub
costing Rs 5.95 lakh. The company expects tremendous response from this
region and has reportedly sold off quite a few such tubs in this region.
The 'sok with chromatherapy', is 75-inch long having a 34.5-inch deep
basin and comes with a 1.5-horsepower pump with a 4-kilowatt in-line
heater, which powers the whirlpool system. The bath is made of acrylic and
fiberglass with reinforced plastic for durability and easy cleaning. The
ultra-deep reservoir of the sok effervescent bath allows two bathers to
completely immerse themselves in the water as champagne-like bubbles
emerge from 13 ports, aiming at soothing bathing experience.
A company spokesperson said sheet of bath water continuously spills
over the tub's rim into a water channel and is re-circulated back into the
tub, conserving water. Different colours in new sôk bath subtly change the
ambience and mood enhancing colour therapy adds whole new sensory
dimension to every immersion.
The product features eight hues that are sequentially transmitted via
four LED light ports positioned within the inner walls of the bath. A
simple touch of the button starts the colour sequence. The progression
starts with neutral white and goes onto relaxing purple, indigo and aqua
blue followed by green providing the balance and ultimately the
stimulation of yellow, orange and red. Each colour is displayed
approximately eight seconds and washes over the bather in a faded hue,
turning solid, and exiting again as a faded hue, giving way to the next
colour, the company said. | |||
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Vipul
Infrastructure to invest Rs 5,000-6,000 crore
New Delhi-based Vipul Infrastructure Developers Ltd, which had
developed Global Business Park and Millennium Plaza (in partnership with
Unitech) in Gurgaon, will invest Rs 5,000-6,000 crores in real estate
projects in various states, in the next 3-4 years.
The company has multiple projects under various stages of development
in Gurgaon, Faridabad, Ludhiana, Maharashtra and Hyderabad, which call for
investments to the tune of more than Rs 5,000 to Rs 6,000 crore in next
three to four years.
Among all projects, the biggest is 150-acre Vipul World, an integrated
township on Sohna Road, Gurgaon, where it has developed a Tech Square for
IT company Dell.
“We have already started work on this project with an initial
investment of Rs 450 crore ,” company’s Senior G Mr (Sales and Marketing)
Brijesh Bhanote said.
The company also has integrated townships in Ludhiana (120 acre),
Faridabad (115 acre) and Hyderabad (400 acre).
Work on the township in Ludhiana will begin only after January 2007,
when the company expects to obtain the layout approval, whereas the
Faridabad project is set to complete by December this year. A Rs 175-crore
hotel-cum-mall is under construction in Amritsar which, Mr Bhanote said,
the company had planned keeping in mind the huge demand for hotel rooms by
tourists.
Also, the company has received an in-principle approval from Haryana
Government to build a 150-acre ITeS SEZ in Gurgaon and is looking for
suitable land near Sohna Road. — UNI | |||
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Courting harmony
with Vaastu Though Vaastu, cannot change our destiny but it certainly can change
the course of the destiny and put one in a better position. It is a
science of balancing various energy fields of five elements through
specific directions. The proper proportions of these elements in a
structure keep the inmates healthy and their mind in perfect harmony. This
enables them to think better and take right decisions at the right times
with a balanced mind and to get over problems and live in peace and
happiness in a dwelling that is in harmony with nature.
The invisible magnetic energy currents in the environment surround us.
These waves have a positive effect on our mind and body. Therefore we
should make sure that the places where we live and work are properly tuned
to avoid failures, frustrations, financial losses, sickness and mishaps in
our lives.
The mind is the most active and creative organ of our body. It needs
regular charging from the continuous flow of invisible flow of energy
currents for its healthy and positive performance. In case the natural
flow of various energies is blocked at our place of residence or work, it
will fail to revitalise us. As result our mind, the central force becomes
sick and dull. One takes right decisions at wrong times or wrong decisions
at right times, in both the cases it results in failures. Therefore, it is
very important to know if these invisible forces are flowing in a proper
proportion to give us positive results or are blocked and distorted
causing mental anguish, financial losses, confusion, frustration, failures
and mishaps in our lives.
A casual observation of a structure will reveal the effects of these
forces on the human beings residing or working therein. This will clearly
indicate that various energy fields, represented by the five elements,
surround us. On an open ground these energy fields operate freely in an
equilibrium and harmony. This equilibrium is disturbed when a structure is
raised on a particular plot. So with the help of Vaastu principles we
restore this proportionate energy to the plot of any measurement.
When this is achieved in a proper manner, it will regulate a harmonious
flow of energy in the building. This harmony will provide a trouble-free
happy and healthy life to the inmates by taking right decisions at the
right times to get the optimum results.
Whereas a defective construction obstructs these forces that results
distortion in the field for the inmates. The auspicious and inauspicious
effects can be assessed in the existing structures through the science of
Vasstu which will convince anyone that Vasstu works on set rules and the
effects are always the same.
lIf young couples have any problem in having children or the adult
males in the family are suffering from any ailment or facing setbacks n
their career advancement then look for the defects in the Eastern side of
the house.
lAny defect in the South-East corner causes disharmony in the
husband-wife relationship and can escalate from petty bickering to
altercation depending upon the profundity of the defect.
lAny fault in South of the house gives health problems, financial
losses to the family head putting the family under financial constraints.
Much exertion with little achievements, crises in the family, possibility
of thefts etc. It can cause bilious disorders.
lThe deficiency in the South-West will impede the rise in fortunes of
the inmates. It creates the conditions of inability to concentration,
insomnia and feelings of extreme sadness, commits vices and face
punishments up to imprisonment. Illness leading to acute or chronic
disease resulting in premature deaths depending on the gravity of the
problem in this corner.
lAny malfunctioning in the West side creates health problems for
habitants and is inauspicious for the progeny being opposite to East. It
causes strife resulting from lack of agreements amongst family members or
business partners. Deviation from moral ideals. It causes genital
problems.
lThe defect in the North-West turns the friendships into enmity and
loss of influence. It adds to the liabilities while failure in the
recovery of loans from the debtors leading to bankruptcy. Wastage of money
through unproductive expenditure on the useless ventures. The delay in
marriages of adult members of the family. Unnecessary involvement in court
cases or lawsuits.
lThe faulty North side is inauspicious for the sources of earning. The
gains do not match with the hard work one puts in. It gives rise to the
problems to the females and brings sorrows in the family. Losses in
property etc.
lNorth-East is considered an auspicious direction as the head of the
Vasstu Purasha lies face down in this corner where God himself is standing
on top of it. It is the corner where North and East Directions meet
together. These two sides hold special positions because the Sun - rises
from the East and North is the roof of the world and the magnetic pole
too. Any defect in this corner ruins the overall prosperity of the family.
It affects the health, wealth and progeny of the habitants hence blocking
the worldly progress of the family. Any fault in this corner can cause the
chronic diseases like cancer etc.
lBraham Sthan is the middle of the house which if cluttered, can be
harmful and if damaged badly, can prove fatal to the head of the family.
Structures, looking alike, may differ in terms of Vaastu. Only a Vaastu
expert can diagnose the predicament and its extent. He then prescribes the
remedical measures which should be economical within the means of the
inmates, structurally possible and suited to met the equipments of the
inmates concerned. The process of correcting is complicated and should not
be attempted without the help of Vaastu expert. There are mainly four
factors for analysing the defects in the structure.
Elementary defects: These defects exist in the particular
direction, corner or part of the building that manifest the specific
problem experienced by the inmates. It is the strong factor, responsible
for the manifestation of the problem.
Cumulative defects: These defects lie on the opposite side of
the elementary defects making elementary defects more powerful and add to
the gravity of the problem and its manifestation.
Additional defects: these are located within the above two types
of the defects and have a bearing on them such as gradients of the plot,
placement of the household items in residences or laying out of the
machinery or plant in the industrial unit etc.
Compensatory factors: In case the opposite side of the
elementary defects is strong with the benefic effects and there is absence
of additional defects in the premises then these factos can resist the
perplexity of elementary defects and help in diluting or delaying the
manifestation of the related problems.
The gravity of the problem can be assessed by taking the above factors
into consideration. Therefore it is advised to seek the help of Vaastu
expert for proper analysis of the defects that create particular problem
in the house or place of work.
(The writer is a Vaastu expert) | |||
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TAX
tips by S.C. Vasudeva Q. We would like to address our query on possible capital gain to your expert panel on taxation in relation to out-of-court settlement the details are as under: Ours is a society registered with the Registrar of Companies, however, the society is not registered with Income tax Department as a charitable institution or for any rebate etc. The society entered into an agreement dated 20.02.2003 for purchase of 9.5 acres of land at the rate of Rs 27.40 lakh per acre. A sum of Rs 5 lakh was given as advance money. At a later stage, however, the seller entered into a separate relationship with another buyer who bought 4 acres out of total 9.5 acres at the rate of Rs 67 lakh per acre by bypassing our agreement. We appealed to a court, which then passed an interim stay in our favour. An out-of-court settlement was made between our society and the new buyer whereby Rs 95 lakh was given to the society by the new buyer, along with 2.4 acres of land, for which payment is to be made by the new buyer but the registry charges will be borne by our society. The expected market price of the land is Rs 50 lakh. We request you that the name of our society be withheld from being printed. Aakash Khandelwal, Amritsar A. The query does not indicate the full facts of the case. Accordingly, I have replied to your query with certain presumptions. It has been presumed that 5.5 acres (the remaining portion) of the land was acquired by your society on the agreed rate and there was no dispute in that regard. It is further presumed that the land of 2.4 acre, which is being transferred to your society by the new buyer, is out of those 4 acres, which had been agreed to be sold to you at the rate of Rs 27.40 lakh per acre. The reply is therefore based on these assumptions. It is therefore the dispute with regard to the 4 acres, which has been taken into consideration for determining the effect of the transaction. The market price of the land of Rs 50 lakh per acre indicated in the query, in my opinion has no relevance for deciding the effect of the transaction as the land having area of 2.4 acres is being given free of cost to the society along with a sum of Rs 95 lakh. In my opinion, the amount of Rs 95 lakh should be considered as having been paid towards the relinquishment of right in respect of 1.6 acres of land (4 acres - 2.4 acres) which would be taxable as a long-term capital gain in case the period of three years have expired from the date of agreement to sell i.e. 20.02.2003. Otherwise it should be treated as a short-term capital gain. The cost of 2.4 acres of land would be the amount of registration charges paid by the society. House building must for tax
exemption
Q. I was allotted a flat in 1990, the possession of which was
taken in 1992 and a consideration of Rs 2,36,000 was paid. Now I have sold
this flat at Rs 13 lakh in 2006 and have purchased a plot for Rs 9.3 lakh
in 2006. Could you kindly let me know my capital gains tax liability?
Could this liability be reduced in case of senior citizen?
Rajkumar Verma, Sangrur
A. The facts given in the query are incomplete; as it is not
indicated on which date/dates the instalments aggregating to Rs 2,36,000
were paid towards the acquisition of the flat. In view thereof, the
indexation benefit has been considered from the financial year 1992-93
onwards in respect of the total amount of Rs 2,36,000. The indexed cost on
that basis would be Rs 5,49,256. The capital gain on the said basis would
be Rs7,50,744. The same would be a long-term capital gain, taxable at the
rate of 20 per cent plus education cess at the rate of 2 per cent on the
capital gains tax so computed.
The purchase of plot in itself would not entitle you to any exemption
from the levy of capital gains tax. The exemption would be available only
if you construct a residential house on such plot within a period of 3
years of the date of transfer of the flat. In case you are not able to
appropriate the entire amount towards the construction of the house, the
remaining amount of the capital gain should be deposited in a separate
bank account to be opened under the capital gains scheme before the date
of filing of return of income for the assessment year in which such
capital gain was to be included for the purpose of computing the total
income. DA part of salary; hence
taxable
Q. My query is: whether salary includes dearness allowance (DA)
or not for the purpose of calculating taxable house rent allowance in term
of Section 10 (13A) of Income Tax Act in case of Haryana Government
employee where DA counts for gratuity but does not count for pension.
Reference of Section/Rule/Instruction if any in this regard may kindly be
quoted.
Jagmindar Aggarwal, Haryana
A. For the purposes of computing house rent allowance in terms
of Section 10(13A) of the Income-tax Act 1961 (The Act) it has been
clarified that salary shall have the meaning assigned to it in clause (h)
of rule 2 of part A of Fourth Schedule to the Act. Fourth Schedule deals
with the provisions regarding to recognised provident fund. Clause (h) of
rule 2 of the said schedule defines salary as under:
“Salary includes dearness allowance, if the terms of employment so
provide but excludes of other allowances and perquisites.”
This in my opinion means that in case the dearness allowance is being
included in the salary for the purposes of provident fund contribution,
the same should also be considered for the purposes of computing the
amount under Section 10(13A) of the Act. Deduction allowed on royalty
on books
Q. Kindly give answers to my questions about income-tax
calculations. My particulars are as under: I am a senior citizen.
I understand that house tax is deducted from the rent from property.
How much more deduction is allowed for the repair and maintenance of the
property?
Out of the income from royalty from books, how much deduction is
allowed to me as author, when I have to spend a part of it on relevant
books for the preparation of my own book. Is it sure percentage of the
amount of royalty?
D.R. Mehta, Jalandhar
A. Your presumption as to the deduction of house tax paid from
the annual rental of a property is correct. From the amount so arrived at,
a deduction to the extent of 30 per cent of such an amount is allowed for
calculating income from house property.
In case of an individual being a resident in India who is an author and
his income includes any income, derived by him in exercise of his
profession, on account of any lump-sum consideration for assignment or
grant of any of his interests in the copyright of any book being a work of
literary, artistic, scientific nature, or of royalty or copyright fee
(whether receivable in lump sum or otherwise) in respect of such book,
there shall be allowed a deduction in computing the total income of such
an assessee, which shall be equal to the whole of the income referred to
herein above or an amount of Rs 3 lakh whichever is less. The above
deduction is subject to a proviso that where the income, by way of such
royalty or the copyright fee, is not a lump-sum consideration in lieu of
all rights of the assessee in the book, so much of the income, before
allowing expenses attributable to such income as is in excess of 15 per
cent of the value of such books sold during the previous year shall be
ignored.
Section 80QQB of the Act which deals with the above deduction also
provides that in respect of any income earned from any source outside
India, so much of the income shall be taken into account for the purpose
of this section as is brought into India in convertible foreign exchange
within a period of six months from the end of the previous year in which
such income is earned or within such further period as the competent
authority may allow. Capital gain applicable on
investment made for NRI
Q. My son has been serving in USA in a software firm for the
last six years against an H-1 visa. He wants to invest his savings in
India by purchasing immovable property, in mutual funds etc. He has opened
an NRE saving account for the purpose. Kindly advise: -
1. Whether I can invest his savings on his behalf and how?
2. Whether profits so booked can be credited to his NRE saving account?
3. What will be his tax liabilities on profits booked against property
and other instruments?
R.C. Pahuja, Yamunanagar
A. You can make investments on behalf of your son provided you
hold a valid power of attorney to do so. It would be better if a general
power of attorney is executed by your son in your favour in USA, which
should be registered in India also.
Schedule I of Foreign Exchange Management (Deposit) Regulations 2000
permits amongst others, the following credits in the said account:
(g) Maturity proceeds of government securities including national
plan/savings certificates as well as proceeds of government securities and
units of mutual funds sold on a recognised stock exchange in India and
sale proceeds of units received from mutual funds, provided the
securities/units were originally purchased by debit to the account
holder’s NRE/FCNR account or out of remittances received from outside
India in free foreign exchange.
(h) Refund of share/debenture subscriptions to new issues of Indian
companies or portion thereof, if the amount of subscription was paid from
the same account or from other NRE/FCNR account of the account holder or
by remittance from outside India through normal banking channels.
(i) Refund of application/earnest money/ purchase consideration made by
the house building agencies/seller on account of non-allotment of
flat/plot/cancellation of bookings/deals for purchase of
residential/commercial property, together with interest, if any (net of
income tax payable thereon), provided the original payment was made out of
NRE/FCNR account of the account holder or remittance from outside India
through normal banking channels and the authorised dealer is satisfied
about the genuineness of the transaction.
The dividend income from shares and income from mutual funds are exempt
from tax. The interest on debentures or bonds would be taxable at normal
rates applicable to individuals. The capital gain on sale of immovable
property would be taxable. The rate of tax would depend upon whether it is
a case of short-term capital gain or a long-term capital gain. | |||
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Prices crash around
scam-tainted The real estate boom around the City Centre Project - the fourth
biggest project in the world - in Shaheed Bhagat Singh (SBS) Nagar in
Ludhiana has gone bust with the exposure of an alleged scam in the project
deal.
Residents owning properties in the area, who had hit a jackpot till two
months go, are now doomed due to a slump in real estate business. In fact
there are no buyers for land in SBS Nagar and those who had bought plots
worth lakhs some time ago, expecting profits, have started having
sleepless nights.
The government seems to have washed its hands off the controversy by
dissolving the Ludhiana Improvement Trust and ordering an inquiry in to
the scam. The SAD leaders, who had been sitting on dharna outside the
project, seem to be in a no mood to give up till a CBI inquiry is ordered.
Real estate dealers and residents know, if at all, a CBI inquiry is
ordered the project would be in the cold storage for an indefinite time.
Property dealers in the area say that a 100 sq yard plot before start
of the project was being sold for Rs 6 lakh to Rs 7 lakh. But after it was
inaugurated the same plot went for Rs 20-25 lakh.
And now after the alleged scam there are no takers of property at all.
According to Mr Rishi Pal, a property dealer, G and H block of the SBS
nagar has suffered the worst as the rate of property has dropped to Rs
12,000 to Rs 14,000 per square yard as compared to Rs 16,000 in the recent
past. Similarly in F block also the rates have gone down from Rs 17,000 to
Rs 14,000. "And still there are no takers and nobody wants to sell below
this price."
"Those people who thought they would earn in lakhs have instead
suffered huge losses. Nobody is willing to give them the same price at
which they had bought. Nobody knows what would be their fate," said Mr
Arvind Sharma, a resident of the area.
He added people were not sure whether the project would ever be
completed due to its controversial status and the future was uncertain.
The fact that the work has also started going on a slower pace is
making this impression stronger. "Earlier everybody wanted a house near
the project. Now nobody wants to go there saying that the area is far off
and one has to cross a railway line to reach there.
"Suddenly people have started seeing the negative points of that area."
Interestingly real estate companies, who had put up huge boards outside
their offices in the area, have suddenly removed these so as not to fall
in the net of any inquiry committee.
The project had attracted the attention of many investors who had
bought land worth crores in the area. The city centre was advertised to be
having a helipad and a mini golf course on its rooftop besides parking for
8000 cars. It was all set to bring Ludhiana on the international map.
Spread over an area of 26 acres, the project, being claimed as a city
within Ludhiana city, was to come up at a cost of Rs 2000 crore.
Being developed by the Ludhiana Improvement Trust in collaboration with
Today Homes and Infrastructure Private Limited, the mega project was being
popularised as Ludhiana's dream as well as the nation's dream and was to
be completed by February next year. Its fate now hangs in balance. | |||
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RBI tightens
lending norms for housing
Banks say the housing loans have become unvisible at the current rate
of interest because interest rates on home loans are not keeping up with
the rising cost of funds.
Meanwhile, the Reserve Bank of India has also tightens the lending
norms for real estate sector. The RBI has tightened its measures for
checking flow of funds from banks to the real estate sector.
In a communication to banks it has asked them to ensure that credit
disbursed is used only for the purpose it has been processed and
sanctioned there should not be any diversion of banks’ funds of for any
speculative purposes.
It is understood that the RBI has received a number of complaints that
borrowers are diverting their funds for speculative purposes after raising
loans at a nominal rate of interest.
In another move the Delhi High Court has also advised the RBI to issue
guidelines to banks that loans for commercial and housing sectors should
be sanctioned after taking proper precautions. It has to ensure that all
formalities have been completed from the urbank development authorities
and Town and Country Planning department.
Banks should also get approval from their boards for norms
encompassing, ceiling on the total amount of loans to real estate,
single/group exposure limits for such loans, margins, security, repayment
schedules and availability of supplementary finance. Such a policy is
required immediately.
This means that prospective borrower can approach a bank after
acquiring land then getting the permissions required from the authorities
concerned.
All banks are also required to incorporate in their lending policy on
real estate aspects relating to adherence to a national building code of
the Bureau of Indian Standards.
The guidelines of the National Building Code (NBC) are now becoming
legally-bound for many states. States are now taking steps for building
laws for their municipalities and municipal corporations.
The NBC 2005 under the Bureau of Indian Standard serves as a National
guidelines document for local bodies, development authorities,
construction departments and builders. It provide state-of-art design,
construction and regulations for the earthquake and other natural
calamities. The RBI has also advised banks to consider incorporating the
NBC code in their loan policies in view of the importance of safety of
buildings, especially against natural disasters.
The Citibank, which is one of the largest banks i terms of assets, is
believed to be shutting down home loans units at small town branches.
Citibank has found it unviable to keep these units afloat because interest
rates on home loans are not keeping up with rising cost of funds.
Several other banks are believed to have become at least selective in
giving home loans.
(The writer is a senior banker)
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DuPont India
forays into construction products biz
Services Company DuPont India has launched a business initiative to
provide building solutions to the domestic construction industry and said
it is eyeing a $ 20-25 million business by 2010 from its building and
construction segment in India.
"Our new initiative 'DuPont Building Innovations' would provide
solutions, products and innovations to the Indian construction industry
and we would offer our services in major centres across the country,"
DuPont India Executive Director Jagdish Kumar said on sidelines of an
International Trade Exhibition for Building, Construction and Interiors in
New Delhi.
The company has identified the building and construction segment in
India as a key sector that would drive its strategic growth in this
country, he said.
"We would commence operations in southern cities and depending on the
requirements of the construction industry take it to other parts of the
country as well. By 2010 we are aiming at a business of 20-25 million
dollars from our building and construction segment in India," Mr Kumar
added.
The company is also looking for channel partners in the country and
would provide training to industry workers through the partners.
"As the industry is localised, the needs are similar yet different and
we are looking at partners who have a good networking and critical mass on
the ground. We would be partnering with around 10 such players in the
construction business and have also identified a few of them," he said
without divulging further details.
Under the new initiative, Du Pont has launched new products keeping in
mind the Indian construction methods and weather conditions, he said. —
PTI | |||
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Parsvnath’s IPO to
raise $220 million
Real estate firm Parsvnath Developers Ltd. has set a price band of Rs
250-300 a share for its revived initial public offering which could value
the company at up to $1.2 billion, banking sources said recently.
The company, which is selling 33.24 million shares, or 18.3 percent of
its post-issue capital, would raise up to Rs 9.97 billion ($220 million)
if the IPO was priced at the top end of the band. Bidding for the offer
will be open from November 6 to 10.
New Delhi-based Parsvnath has a green-shoe option of 3.09 million
shares, which if exercised would take the issue size to 19.67 per cent of
its post-issue capital.
Parsvnath had revenues of Rs 6.44 billion rupees for the year to March
2006, and a net profit of 1.06 billion. Its earnings per share for the
year were Rs 7.21, according to the offer document, which has been
previously filed to regulators.
The IPO would make Parsvnath the second most-valuable listed real
estate firm in India after Unitech Ltd., which is valued at $7 billion.
Although that ranking could be short-lived if DLF Ltd. were to revive its
IPO plans, which if realised would have valued the real estate company at
$27 billion.
DLF put off its IPO plans after an emerging markets ell-off in May,
which sliced off about 30 per cent of the BSE’s main index and foiled many
fund-raising plans, including Parsvnath’s.
The stock market has since recovered, with the main index hitting a
record high last week.
Parsvnath said it has development rights for an estimated 102.11
million square feet of saleable area and is present in 37 cities across
the country. — Reuters | |||
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Despite Chandigarh and its surrounding
areas falling in a seismic zone, builders are not adhering to the safety
guidelines of the National Building Code 2005, says.jpg)
Hundreds of high-rise buildings (as high as
45 metres) are being constructed in peripheral towns like Zirakpur, Dera
Bassi, Kharar and Mohali. “We have made amendments in the buildings bylaws
and the builders have to get certification from an architect,” said an
official in Punjab Town and Country Planning Department.
In real estate the only factors that
really matter are location, location and location, claim experts. After
all, it is the location of a particular property, which decides its price,
premium, buy-ability, future potential and saleability.
Design techniques have undergone rapid
transition due to the belief that the commercial age requires a different
architecture from that of Vedic era. The mass housing compulsions in
cities and towns of the present day human settlements in the shape of
complexes, blocks and skyscrapers, have resulted in man losing his
individuality and identity in the rapidly spreading concrete jungles.
Vaastu becomes more than relevant in the present social scenario to
strengthen the immunity of the mind so as face the evils of the
materialistic age by balancing the five elements according to their
proportion.