The interim budget 2019 has offered some unexpected benefits for owners of property. We look at the three main announcements that are likely to bring tax relief to home owners.

1. Exemption of notional rent on second self-occupied property:

Tax payers who own and occupy more than one house have to pay tax on notional rent, which the property might fetch. This used to put many tax payers under undue monetary pressure as these tax payers may have a second house in a native place or one that is used by their parents for which no rent is received. Until now, they had to pay notional rent on the second property, as one can claim only one owned house as self-occupied. Now, tax payers will be able to claim two owned houses as self-occupied, without having to pay any tax on such notional rent, provided the same is/are not let-out.

2. Exemption on long-term capital gains when the same is invested in two houses:

Presently, you can claim the tax benefits with respect to long-term capital gains on the sale of residential house, if the indexed long-term capital gains are invested for buying or constructing another one residential house, within the period specified. The interim budget 2019 proposes to expand this benefit to buying or constructing two residential houses, for the purpose of claiming the exemption under Section 54, provided the amount of capital gains does not exceed Rs two crores. Once a tax payer claims the exemption for buying or constructing two house, he cannot claim the exemption for the same year or the subsequent years.

3. Increase in TDS limit for rental income:

The third benefit for property owners is by way of increased limit for rent on which the lessee will deduct tax, before paying the rent to the landlord. Against the present limit of Rs 1.80 lakhs, the lessee will now have to deduct TDS, if the annual rent exceeds Rs 2.40 lakhs. The tax is required to be deducted, if the lessee is other than an individual or an HUF. An individual or an HUF lessee will deduct tax while paying you rent, if and only if he is engaged in business or profession and their books of accounts were subjected to tax audits in the previous year.

Brihanmumbai Municipal Corporation (BMC) had sent them several reminder notices and disconnected services for not paying the tax.

MUMBAI: Property tax defaulters in the city will now not be able to sell, transfer or take a loan against the property. Brihanmumbai Municipal Corporation (BMC) had sent them several reminder notices and disconnected services for not paying the tax.

Earlier this week, its assessment and collection department created a charge on property tax cards of defaulting premises. Civic officials said the first charge on property card of a defaulter for a vacant plot in Deonar.

Officials said they approached the district superintendent of land records and a request was made to the city survey officer of Ghatkopar division, as Deonar falls under it. With this, any financial transaction, such as purchase, sale, transfer and borrowing against property will be unlawful. “Deonar Industrial Premises Co-Op Society owes the civic body Rs 2.18 crore as property taxes. Despite repeated notices, they failed to make the payment, so the assessment and collection department of M/East ward executed the warrant of attachment and sought to create a charge on the property card,” said assistant municipal commissioner (assessment and collection department) Devidas Kshirsagar.

Civic officials said they had to take this step as the total outstanding is Rs 13,000 crore. Kshirsagar said out of this, Rs 3,500 is recoverable, which means it is not stuck in any legal dispute.

“The remaining Rs 9,500 crore will be a challenge for us to recover. Similar action is proposed against other defaulters,” he said.

BMC’s property tax collection till January-end for the existing financial year has picked up. Officials said that till January 31, 2019, the property tax collected has been Rs 3,495 crore, while last year, in the same period, the amount was Rs 3,457 crore.

BMC had set a target of Rs 5,400 crore for collection of property tax for the year. Officials said extra efforts would be needed to meet the target.

While the government has brought in laws such as RERA, over 80 percent of consumers are of the view that there has not been much change in the property buying experience.

The Indian real estate sector is expected to contribute 13 percent to the country's gross domestic product (GDP) by 2025, according to the 'Indian Real Estate and Construction: Consolidating for growth' report by National Real Estate Development Council (NAREDCO) and Asia Pacific Real Estate Association (APREA).

In 2017, the realty sector contributed about 6-7 percent to India's GDP. The sector is expected to touch $1 trillion by 2030, becoming the third largest globally.

Apart from its contribution to India's GDP, the growth of this sector holds significance as it is the third largest employer, after agriculture and manufacturing, in the country and presently employs over 50 million people.

When it comes to investing in a property, most buyers think of putting their money in an apartment. We look at whether it may be financially more prudent to invest in a plot, rather than an apartment.

Purchasing a house is an important financial decision, particularly for first-time buyers. Home buyers have to be careful as they invest their hard-earned money for a secure future. Nevertheless, a good investment can earn handsome returns. As explained in the words of Russell Sage, “Real estate is an imperishable asset, ever increasing in value. It is the most solid security that human ingenuity has devised. It is the basis of all security and about the only indestructible security.”

One has to bear in mind that any erroneous or hasty decision while making a big-ticket purchase, for example, during the course of purchasing a property, might yield results that one could regret. Moreover, investors may also be faced with the dilemma of having to decide whether one wants to invest in a plot of land or opt for an apartment, to reap better returns on investment.

Buying an apartment is not the same as purchasing a plot of land. Although both the asset classes are highly lucrative in nature, there are several pros and cons dividing the two types of purchase. Here are some key merits of investing in a plot of land, which could help a buyer to arrive at a final decision.

The developers are facing problem as they cannot market their project without procuring a RERA registration number as per the law.

JAIPUR: The state government is continuing to sit on the proposal of constituting authority and appellate tribunal of the Real Estate Regulatory Authority (RERA), Rajasthan much to the chagrin of home buyers and developers.

Almost one year and 10 months after the RERA was enacted, home buyers and builders still do not have a clear road map.

The RERA was introduced with an aim to bring more transparency in the existing system and protect the interests of home buyers. However, in absence of half-hearted attempt of the state government to implement the law, both developers and buyers are facing inconvenience.

Government of India had enacted the Real Estate (Regulation and Development) Act 2016 and all the provisions of the Act came into force on May 1, 2017 in Rajasthan. However, as the state government failed to constitute full-fledged committee over 650 complaints related to issues over flats and housing schemes in Rajasthan are waiting to be heard.

A senior official at RERA said, “Since May, no case was heard at RERA. Rajasthan government had earlier appointed additional chief secretary (ACS) of urban development and housing (UDH) department as the head the RERA. But as per the act, it is mandatory that after one year complaints can only be heard after constituting full-fledged authority and appellate tribunal,” he said.

It was informed, that court on December 18 has directed to constitute RERA authority in two months and tribunal in three months. The deadline is approaching nearer, however, constitution of authority is no where in sight.

With this , the developers too are facing problem as they cannot market their project without procuring a RERA registration number as per the law.

Gopal Das Gupta, chairman, CREDAI, Rajasthan, said, “The developers cannot give advertisement to sell their project without registering with RERA. We have appeased the minister about the issue and submitted the memorandum. To provide relief to the developers process should be started soon,” he said. As per the mandatory provision, the developers have to register themselves on RERA website.

Once details of all the ongoing projects are uploaded on the website, the aggrieved consumers can register their complaints at RERA office. However, in absence of appellate tribunal that was proposed adjudicate disputes, consumers continue to wait for relief.

For any architectural structure to be sustainable, it should take into consideration its surroundings, the people it caters to as well as its purpose, explains architect Yatin Pandya, founder of Footprints E.A.R.T.H.

Architect Yatin Pandya, the founder of Footprints E.A.R.T.H. (Environment Architecture Research Technology Housing), is a multi-faceted personality. The author, activist, academician and researcher, has to his credit urban design, mass housing, architecture, interior design and conservation projects. Pandya, who holds a masters in architecture from McGill University at Montreal, Canada, worked with the Vastu Shilp Foundation for Studies and Research in Environmental Design as an associate director, before starting Footprints E.A.R.T.H. in 2008. “Today, we are a team of about 18 colleagues pursuing, research, practice and publications. Environmental sustainability, socio-cultural appropriateness, timeless aesthetics and economic affordability, are the key principles of our work,” says Pandya.

How will the linking of Aadhaar with immovable properties impact the property market?

What will happen if the government mandates the linking of Aadhaar numbers with immovable properties? We examine how it will affect property owners and whether it will clean up benami transactions.

Whether it is your bank account, life insurance policy, mutual fund investment, demat account, or mobile connection, linking them with one’s Aadhaar number, is becoming all pervasive. The government, in a bid to deal with the menace of corruption and black money, has hinted that it may consider linking immovable properties with Aadhaar numbers, as well. If such a move is implemented, it will have widespread ramifications and make the implementation of the benami transaction law easier. The Benami Transaction Act was notified in November 2016, at almost the same time as the announcement of the demonetisation drive. This law is administered by the Income Tax Department. After the benami law came into force, the I-T Department has attached around 475 properties worth Rs 1,600 crores, till date.

The benami transactions law has wider ramifications for real estate investments, than other investments. The requirement to link your Aadhaar number with your immovable property, may cover the transactions of registrations that are undertaken after the law comes into force. It may also require the furnishing of the Aadhaar number, for immovable properties already owned by you.

In fact, Maharashtra has announced that homebuyers who would use their Aadhaar Card for property registration would not have to produce two witnesses to carry out the transaction. Those who appear at the sub-registrar’s office without the Aadhaar Card would, however, have to come along with two witnesses.

NEW DELHI: Housing demand and supply were higher in Bengaluru, Chennai and Hyderabad as compared to sales and new launches in the north and west regions, property consultant Anarock said.

According to a report, housing sales in the main southern cities collectively rose by 20 per cent as against 18 per cent rise in the north and 15 per cent in the west.

New housing launches increased by 77 per cent in 2018 to 67,850 units over the previous year. National Capital Region (NCR) saw an increase of just 16 per cent in new supply while the main west Indian cities of Mumbai Metropolitan Region (MMR) and Pune, together, saw a mere 17 per cent jump in new residential supply.

Anarock also found out that the collective unsold stock in these southern cities is a mere 19 per cent of the total 6.73 lakh unsold units across the top seven cities. NCR alone has nearly 28 per cent of the total unsold stock.

“This clearly indicates that the housing markets in the southern cities are exceptionally resilient, and were quick to recover from the overall slowdown in the Indian real estate sector,” said Santhosh Kumar, Vice Chairman of Anarock Property Consultants.

The housing market in southern cities are driven by end-user demand, particularly from people working in IT/ITeS sector, while the NCR market is backed by investors, he said.

During all the ups and downs that the Indian real estate market has witnessed in recent years, the southern cities have displayed remarkable strength and resilience even in the worst phases.

“Year 2018 was a mixed bag of highs and lows for the Indian real estate sector. The initial pangs of policy alterations seemed to fade away with each region seeing visible signs of recovery across segments,” Kumar said.

Not only housing, Anarock said the retail and office segments of the real estate sector also increased activities in southern cities.

As per company data, the main southern cities saw collective office space absorption of nearly 21 million sq ft as against just 6 million sq ft in entire NCR.

“All in all, the southern cities had a very clear edge across sectors in real estate activity in 2018. Their inherent advantage stems from the more professional and organised approach to real estate - not just post RERA (new realty law) implementation but also in the pre-RERA years,” Kumar concluded.

Real estate, gold, bullion, bonds and shares are few examples of capital assets. Any gains that you make from the transfer of these capital assets are known as capital gains and attract income tax.

The tax liability depends on the assets and the period for which that asset was held by the seller.

For instance, in case of real estate, if it was held for less than two years, then gains (sale minus purchase price) from the transfer will be considered short-term capital gains (STCG). It gets added to the seller’s other incomes and is taxed at the applicable slab rate.

If the property was held for more than two years, then the gains are considered long-term capital gains (LTCG) and taxed at 20% with indexation.

Similarly, in case of equity shares, if shares are held for less than a year, gains would be considered as STCGs and in case they were held for more than one year, gains are considered as LTCG.

STCGs on shares where security transaction tax (STT) is paid are taxed at the rate of 15% plus cess.

On the other hand, LTCGs of up to ₹1 lakh in a year from shares or equity investments is exempt from income tax, whereas any gains above ₹1 lakh in a year is taxed at the rate of 10%.

Taking strong exception to two prime properties of the embattled Amrapali Group finding no bidders, the Supreme Court has said that it looked like ‘cartelisation is at work’ and sought to know whether banks were a part of the cartels.

The Supreme Court, on February 11, 2019 said that it was ‘shocking and disturbing’ that bankers were not coming forward to finance two prime properties of the embattled Amrapali Group, which remained unsold at an auction. A bench of justices Arun Mishra and UU Lalit said that it was earlier worried over undervaluation of the properties but strangely in the auction held on January 31, 2019, no bidders came to buy the prime properties. “It seems there is a systematic effort that properties go unsold, as no bids have come forward in the auction. Involvement of unforeseen hands cannot be ruled out. Prime facie, it appears that cartelisation is at work. Are the banks part of the cartel?” the bench said.

The top court said that banks are ready to finance projects for National Building Construction Corporation (NBCC) but they are not coming forward to finance the Amrapali properties, being sold by the Debt Recovery Tribunal (DRT) in an auction. A five-star hotel ‘Amrapali Holiday Inn Tech Park’ constructed in Greater Noida and prime land in Vrindavan in Uttar Pradesh, were put up for auction on January 31, 2019, by the DRT but no bidder had come forward to bid.

The court allowed the NBCC to issue advertisement for the unsold flats of two Amrapali Projects – Eden Park and Castle – being constructed by it, so that funds could be raised. It said that interests of the home buyers is at the receiving end, as they are the ultimate sufferers. “There were newspaper reports recently that banks are ready to finance the projects constructed by NBCC but they are not ready to finance the bidders, who wanted to buy the Amrapali properties,” the top court said after being told no interested party came forward to purchase the properties worth hundreds of crores, as banks were not willing to finance them. The bench said that it cannot leave the situation like this and if necessary, it can pass necessary orders.

The court-appointed forensic auditor Pawan Kumar Aggarwal told the bench that he had identified 5,229 unsold flats from where around Rs 6,000 crores could be raised, by selling them. Aggarwal told the court that the Amrapali Group’s liability towards Greater Noida Authority was Rs 3,200 crores, around Rs 1,900 crores towards the Noida Authority and around Rs 2,000 crores towards banks. The bench asked the counsel for the Amrapali Group as to how they were planning to settle the liabilities, as unless they cleared the outstanding, nobody would be coming forward to put their money in the projects. “Home buyers’ interest is supreme. You (Amrapali) also have outstanding towards the home buyers, which you will have to pay. You have taken everything from them,” it said.

The forensic auditors also pointed out that multi-national firm JP Morgan Real Estate fund, which had invested Rs 85 crores in Amrapali Zodiac in 2010 by purchasing its shares and later selling them to the sister companies of the realty firm, had violated several then existing norms. Aggarwal pointed out that the shares purchased and agreement of JP Morgan Real Estate fund and Amrapali Group, were in violation of the provisions of law, as out of Rs 85 crores money received for the Zodiac project, Rs 60 crores was transferred to other projects.

“The shares purchased by JP Morgan were later purchased for Rs 140 crore by Amrapali’s two sister companies – Neelkanth and Rudraksh – which were floated by a peon and one office boy, who were working in the office of the statutory auditor of the Group,” he said.

The bench asked the forensic auditors who was the actual beneficiary in the transaction, as prima facie it did not appear to be a bona fide transaction. The auditors replied that they have written to the JP Morgan but they have not yet shared the name of actual beneficiary. The counsel for JP Morgan said that they could submit the name of the actual financier, who had invested in the Amrapali Group to the court but could not share it with other parties, as it was prohibited under the US laws. The bench listing the matter for further hearing to February 14, 2019.

In a major boost for the National Clean Air Programme, the government has announced that it will collaborate with The Energy and Resources Institute and Bloomberg Philanthropies, which will offer technical assistance on air quality issues.

The Environment Ministry, on February 12, 2019, found supporters in international organisation Bloomberg Philanthropies and Delhi-based think-tank The Energy and Resources Institute (TERI), on resolving air quality issues under the National Clean Air Programme (NCAP). An initiative launched at the World Sustainable Development Summit (WSDS), organised by TERI, would help mitigate air pollution – both at the national level and in a group of Indian cities – a press note issued by TERI said.

The government has collaborated with the TERI, Bloomberg Philanthropies and Shakti Sustainable Energy Foundation, aiming to bring together research and civil society organisations, to offer technical assistance on air quality issues in support of the NCAP. “The joint project will help address and mitigate air pollution, both, at the national level and in a group of Indian cities, by working to develop better understanding and awareness of the sources of air pollution, through emissions inventories and source apportionment studies,” the statement said. It added that the initiative would formulate policy recommendations and action plans, to address air pollution on the basis of data, evidence and consultations and increase capacities of key stakeholders to address the challenge through exchange of experiences and good practices.

Speaking at the event, CK Mishra, secretary at the Ministry of Environment, Forest and Climate Change, said, “We are delighted to be working with Bloomberg Philanthropies, TERI and other partners, on the National Clean Air Programme. Air pollution is a difficult and multi-dimensional challenge and we need to work together across the government, multiple stakeholders and citizens to address this.” Michael R Bloomberg, UN special envoy for climate action and founder of the Bloomberg Philanthropies, said, “Air pollution is one of the biggest global problems of our times. India has the unique opportunity to leapfrog and follow a sustainable development pathway, demonstrating solutions to the air pollution challenge that can have relevance all over the world.”

The initiative will work in tandem with the NCAP that was launched in January 2019, with the goal of reducing particulate matters by 20-30 per cent by 2024 from 2017. Lauding the initiative, TERI director-general Ajay Mathur said, “Region-specific actions are needed and this initiative brings together the interested groups to accelerate these actions.” Bloomberg Philanthropies works in 480 cities in more than 120 countries around the world, in areas including arts, education, environment and public health, the press note said.