August 2017 Vol 02
Multiple Cap gains investible in one new house
The Income-Tax Appellate Tribunal (ITAT) has held that a taxpayer can invest capital gains for the second or third time towards the same `new’ house property. Tax benefits cannot be denied on this ground, provided the cost of the new house is within capital gains that have arisen to the taxpayer. ITAT also held that as the new property was under construction, it cannot be counted towards the number of houses already owned by the taxpayer.
Various provisions of the I-T Act grant a tax benefit, where long-term capital gains (LTCGs) arising out of a sale of certain assets are invested in acquiring a new house. To the extent of investment in the new property, the taxable component of LTCGs is reduced, resulting in lower I-T outgo. But if the taxpayer owns more than one house, other than the `new’ residential property, on the date of transfer of the original assets, the I-T benefit is not available. It is not uncommon for taxpayers to sell more than one asset to buy a larger accommodation or to purchase one in a relatively more tony area. ITAT Delhi bench’s decision early this month will support I-T deduction claims of taxpayers.
RERA, Demo force Developers to go slow on new launches
Against the backdrop of demonetisation and implementation of the Real Estate (Regulation and Development) Act, 2016, residential real estate is finally tuning itself to end-user driven demand than pure investment. The second quarter of 2017 marked a record low for units launched across India, while sales continued to outdo new units being built in a quarter for the sixth consecutive quarter.
This has resulted in the quarter witnessing the country’s residential inventory overhang dipping to a 10-quarter low, showed data from Anarock Property Consultants. Over 20,000 new units were launched across India’s top seven cities during the quarter ended June, while the corresponding number was slightly higher at over 26,000 units in the first quarter of 2017.
Residential property keeps pole position
The residential property investments accounted for 54 percent (USD 1075 million) out of the total investments of USD 1,990 million flowing into Indian realty sector in the first half of 2017, and reforms like Real Estate (Regulation and Development) Act (RERA), Goods and Services Tax (GST), and Benami Transactions (Prohibition) Act are expected to boost real estate investment in the run up to the festive season, say industry experts.
“RERA will now ensure that only strong, credible developers with transparent business practices and ability to complete projects on time remain in the scene. Simultaneously, the supply pipeline has moderated -partly because non-credible players are forced to withdraw from the market, and partly because developers are being more cautious with their project launches. All indicators point towards a decisive return of buyer interest over the next 18-24 months,“ said Anuj Puri, Chairman, Anarock Property Consultants.
Making a Property Investment: Talk to Real Estate Expert
It has been highlighted time and again that real estate, as an asset, would give you healthy returns. Here’s how you can ensure just that. Make a property investment: To start, you need to select a location, a property and check the prices by comparing similar properties in the same location or nearby areas. Before making the investment, an investor must look at the past and current price trends as well. All these trends will help him assess the future price. It is not always possible to make profits but if you have a good strategy, you can earn big..
Talk to real estate Experts: To get an in-depth analysis about the market, it is essential to speak to realty experts and professionals who constantly invest in real estate. Building such a network will not only help you gain more knowledge but also guide you in making the right decision. Hence, verify facts; don’t fall prey to rumours or misinformation and make an apt choice. Transparent transactions: Often, huge profits can tempt you to indulge in unethical practices and transactions. Now that the real estate market is more transparent than it was before, it will only serve your purpose if you keep your transactions transparent and in accordance with the law. If you are buying and selling ethically, then ultimately, you will head towards the right direction.
Is Realty still the Best bet?
Despite facing tough challenges, real estate still holds out as the best investment option for all segments of buyers for atleast 10 reasons like
Residential property attracts lions’ share of investments in 2017
Investments in Indian realty at $1,990 million first half of the current year; residential accounted for 54% ($1,075 million) of total investments. Residential property remained the most-preferred asset class in Indian real estate during H1 2017. While overall investments in Indian realty touched $1,990 million in this period, the residential sector accounted for 54 per cent ($1,075 million) of total investments. In the same period, investments into commercial realty accounted for 40 per cent ($796 million) and retail received 6 per cent ($119 million) of total real estate investments.
Institutional investors have for long been waiting for greater transparency in the Indian real estate market, which has now arrived with the deployment of RERA and GST. While end-user sentiment is only beginning to revive now as clarity about the new regulatory changes emerges, the pent-up demand for homes is India is beyond question.
Now, obtain your bldg’s occupation cert within 8 days
The urban development department led by chief minister Devendra Fadnavis on Thursday made it mandatory to grant occupation certificate (OC) within eight days, building commencement certificate within 30 days and plinth-checking certificate within seven days. The decision will bring huge relief to people who are waiting for months to secure an OC.
On April 20, 2016, the urban development department had notified public services, along with designated officers, first- and second-appellate authorities and stipulated time limits for such public services. A senior bureaucrat said that in view to provide basic services in a time-bound period, as well as ease of doing business assessment, it was proposed to revise the time limit for providing basic services to people. “We have amended the existing limits and prescribed that occupation certificate be granted within eight days,” he said.
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