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Monday, March 17, 2014

Buy your first home by March 31

NEW DELHI: Those planning to buy their first house should rush and complete the formalities by March 31 to avail of the additional tax benefit against the interest paid on a home loan. That’s because an exemption available to taxpayers will lapse in the current financial year which enables them to reduce the interest paid from the taxable income. The reduction can be up to Rs 1.5 lakh under section 24 of the Income Tax Act and up to Rs 1 lakh under section 80EE against the interest paid on home loan.

The benefit under section 80EE can be availed only to buy the first house of a value of Rs 40 lakh, provided the maximum loan amount is Rs 25 lakh. The second provision is due to lapse. But those who have already borrowed need not worry. The provision was introduced in the 2013-14 budget, although the benefit was available only for a year to provide a much-needed impetus to housing, which has been hit by rising interest rates and falling real income levels.

In the Vote On Account presented on Monday, finance minister P Chidambaram decided not to amend any direct tax provisions, many of which are due to end on March 31, 2014. Although the next finance minister has the option to reintroduce the benefit, it may not be available for the first three-four months of 2014-15. Similarly, the benefit of income tax rebate to companies which are involved in power generation and distribution will also lapse. The provision of lower dividend tax paid by Indian companies on dividend received from foreign companies will also lapse on March 31, 2014.

Executive director (taxation) of PWC India Kuldeep Kumar said that the benefit under section 80EE was very helpful to those who were buying their first house. He said that if the interest payable during a year is less than Rs 1 lakh, the unclaimed amount will be allowed to be claimed in the next financial year. The benefit was also allowed during the construction period.

With this provision, one could avail a deduction of Rs 2.5 lakh from his taxable income against the interest paid on home loan.

After the provision lapses, the first home buyer, falling under 30% bracket, will lose Rs 30,000 and those who are under 20% bracket will lose Rs 20,000.


Residential prices soften in Delhi-NCR

Housing prices have declined by an average 8 per cent in Delhi-NCR during 2013 compared with the year-ago period due to slowdown in property market amid economic and political uncertainties, a study said.

“Delhi-NCR is one of the most sought after property destinations in India. However, the present economic and political uncertainty is getting reflected in capital prices in the region,” property portal 99acres.com said in a report that covers trends on property prices for the housing segment.

The quarter on quarter comparison shows a decline of 2 per cent in Q4-13 as compared to Q3-13 of this year. “Annual comparison (Q4-13 with Q4-12) however shows a decline of 8 per cent in 2013,” the portal said in a statement.

The average rentals for 3BHK flats have dipped by 6 per cent during the fourth quarter of 2013 against the previous quarter. Rentals have fallen by 7 per cent during 2013.

Commenting on the report, 99acres.com Business Head Vineet Singh said: “Delhi –NCR region is witnessing a decline in transactions which is underlined by a combination of factors like slackened demand for real estate, high costs of borrowing and rising inventory of projects by real estate developers.” However, he added that certain pockets in the region have shown a spike in prices like Noida extension, Yamuna Express way and Bhiwadi area near Gurgaon due to the presence of affordable range of new projects.

Removal of toll and launch of schemes by developers like construction-linked schemes would shore up the prospects of real estate in the region.

“Also, the upcoming general elections in April will also ameliorate the situation with lots of policy issues likely to move out of limbo,” Singh said.

In the western region, the capital prices have remained stable in Mumbai showing a rise of 1 per cent during Q4-13 over Q3-13, while Pune saw no change in capital prices.

“The annual comparison shows Mumbai and Pune showing a double digit growth of 16 per cent and 12 per cent in Q4-13 over Q4-12,” the statement said. — PTI

Road ministry explores financing options for Delhi-Jaipur Expressway

The Road Transport and Highways (RTH) Ministry is exploring options like real estate development along the Delhi-Jaipur Expressway to finance it as land cost alone has trebled after the new land acquisition law came into force.

The cost of ~11,750 project that included provision for land acquisition is likely to shoot up by at least ~30,000 crore as the land cost has trebled after the new law .

“The National Highways Authority of India (NHAI) has informed us that the cost of land alone for 272 km expressway would be about ~18,000 crore from the estimated ~6,000 crore,” a ministry official informed.

The development comes barely a month after the Prime Minister’s Office asked the RTH Ministry to move a Cabinet note for the project saying it would be the first such highway to be built by the central government.

“The Delhi-Jaipur Expressway is one of the announcements of the Prime Minister in November, 2013 which has been taken up as a priority project of the government. As on date, there is no expressway built by central government and Delhi-Jaipur Expressway would be the first,” a PMO statement had said.

The official said the Ministry is exploring ways for financing the project which may include development of real estate along the stretch or building it around the existing highway.

The Ministry has sought advise on possible financing modes from stake-holder states – Delhi, Rajasthan and Haryana, before proceeding on the project, the official added.

The Road Ministry has estimated the project cost for the Delhi-Jaipur Expressway at ~11,750 crore, including land acquisition and pre-construction activities.

RTH Minister Oscar Fernandes had earlier said that unless a major portion of the land is handed over in the construction of the proposed Delhi-Jaipur expressway, financial institutions could shy away from funding the project. — PTI


Tuesday, March 4, 2014

C-21 lands in trouble, admn to slap notice

INDORE: Indore Development Authority (IDA) has decided to serve notices on commercial complexes including C-21 in connection with violation of land lease agreement in Scheme 54. Also, the decision has been taken to cancel the lease of four plots given to tea and grocery traders for not paying the lease amount even after eight years of allotment. As per the rule, traders had to pay lease amount within three years of allotment.

A report submitted before IDA board found a portion of the mall constructed on plots given to tea and grocery merchants and Mayur Hospital constructed on a residential plot. In 2006, IDA had allotted plots to tea traders and grocery shops on no-profit-no-loss basis for shifting the market from Siyaganj to ease out traffic flow in the city. At least 123 plots were allotted to tea traders, of which, no construction has been done on 52 of them. Similarly, 176 plots were given to grocery shops, of which, 92 plots are without any construction work so far.

Over the year, malls, restaurants and other commercial units developed over it violating the lease agreement. The issue was raised before the IDA board meeting, following which, a committee was constituted to investigate the matter.

IDA chairman Shankar Lalwani said they are only concerned with violation of land deeds. “The report states that plots are not being used for purposes for which they were allotted. We will serve notices for cancellation of lease agreement,” said Lalwani. “We have sought details of the plot on which the mall was constructed,” he added.

Indore Municipal Corporation (IMC) and town and country planning are also under scanner in this case. IMC is in spot for sanctioning map of the mall and other commercial units on the plot. Town and country planning is under scanner for joining small plots allotted to traders for construction of the mall, thereby violating rules.


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