How about investing in Goa property?
There are lots of option. You can buy plot, flat, villa. If we buy a 2 BHK flat in panaji it will cost you 10 lacs. If you opt for a beach side flat then the SFT price increases to Rs2500/- to 3000/- per SFT because of tourist. Most of the appt, villas are given for rent when they are near to beaches. Not all the beaches are famous. We found Baga and calagute beaches are the most famouse among all other beaches.
Calangute comes under gram panchyat and the roads are very narrow. In the evening you can experience the traffic jam.
2 years back prices were less but it's totally different now. When you buy a appt / villa near beach there would be huge maintenance cost due to humid weather.
At this moment we are really confused whether we should invest in Goa or not?
One taxi driver was telling recently Govt has decided that people only from Goa can buy land in Goa. In that we can't buy land in Goa. The same is in Himachal Pradesh. This is really stupid. When we pay tax, some part of it goes to these state also. Then as an India we should be able to buy land in all the places in India.
What do you think? please share your though with us.
Friday, March 28, 2008
India Goa Real Estate Update March 2008
Thursday, March 13, 2008
FAQ's-House Property
1) What are the deductions available for the house property income?
There are only 2 deductions available on the income from house
property. The 1st is a flat deduction of 30% on the net annual value
of the house and the second is in respect of interest paid on the loan
taken for the house.
Besides this, in the case of let out house property, municipal taxes
paid can be deducted.
2) If a fresh loan has been taken for repayment of the original loan
taken for purchase, construction etc., would the interest payable in
respect of the second loan also be allowed as a deduction?
Yes. This has been clarified by the CBDT circular no. 28 dated 20-8-1969.
3) Is outstanding interest allowable as a deduction?
Yes, outstanding interest is allowable as a deduction.
4) What is the tax treatment for two self occupied properties of an assessee?
If the assessee owns more than one house meant for self occupation,
then the income from any one such property at the option of the
assessee shall be treated as self-occupied property and the other is
treated as "deemed let out property".
5) Can the option available to the assessee to treat one property as
self-occupied and the other as deemed let out, be changed every year?
Yes, the option can be changed every year in a manner most beneficial
to the assessee.
6) If in a house, one room / portion is let out and the rest is
self-occupied, how would you calculate income from house property?
In this case, the portion let out is treated separately as "let out
property" and the self occupied portion is treated as another property
and the income is computed respectively.
7) Where the assessee owns only one house, but is unable to occupy it
due to reason of taking up employment, business or profession, carried
at any other place, what will be the tax treatment of such property?
In this case the computation will be the same as that of a self –
occupied property.
8) What is the tax treatment in respect of unrealised rent recovered?
Unrealised rent recovered shall be treated as the income in the year
in which it is received and taxed under the head 'income from house
property'. No deduction is available on such income and it is taxable
even if the assessee is not the owner of the property at the time of
recovery of such amount.
9) In case two or more people jointly own a property and if their
shares are definite and ascertainable, then what is the taxability?
In such a case, the share of income of each co-owner is determined
separately and included in his individual assessment.
Capital Gains, Short / Long Term, Income from House, let out, self occupied property
House Property Income
Tax is on the annual value of the house property after allowing
certain deductions. House Property consists of any building, flat,
shop etc., and the land attached to the building.
Computation of income from Self Occupied property
Income is computed after giving certain deductions from the annual
value of the property.
* Computation of annual value of self occupied property
The annual value of Self occupied property is taken as NIL if
the property is fully utilized for own residential stay during the
year or if the property is not actually occupied as owner and is also
not let out. If a property is let out for only a part of the year,
proportionate annual value will be calculated.
* Entitled deductions for self occupied property
The only entitled deduction is interest, if any payable, on loan
taken for the purchase or construction of the house property. The
maximum deduction on this account is Rs.30,000/-; However, for
properties acquired or constructed between the 1st April 1999 and the
1st April 2003 out of borrowed funds, maximum limit is Rs. 1,50,000/-
Computation of income from let out property
Income is computed after giving certain deductions from the net annual
value of the let out property.
* Computation of net value of let out property
For let out properties the gross annual value will be the
greater of the following three amounts:
o Municipal value of the property
o Actual rent received during the year
o Fair rent i.e. rent of similar properties in the same or
similar locality.
Out of the gross annual value, municipal taxes actually paid
during the year has to be deducted to arrive at the net annual value.
* Entitled deductions for let out property
The deductions available for computing House Property Income are:
o 30% of the net annual value for repair and maintenance and
rent collection expenses for the property
o Interest on money borrowed to build, buy or repair the property
Ownership of property
Besides owning property in own name, a person is deemed as owner in
following three cases:
* As transferor of the property to spouse or minor child for
inadequate or no consideration
* As holder of an impartible estate or a property in part
performance of a contract under the Transfer of Property Act
* As share holder of a co-operative society or a company, which
entitles to hold any property
Capital Gains : If any Capital Asset is sold or transferred, the
profits arising out of such sale are taxable as capital gains in the
year in which the transfer takes place.
Definition of Capital Gains : Capital Asset means all moveable or
immovable property except trading goods, personal effects,
agricultural land other than within municipal areas or within 8
kilometers from it wherever notified and gold bonds. Jewelry and
ornament are not personal effects and their sale will attract capital
gains.
Distinction between short term and long-term asset
Capital Assets are of two types i.e., long term and short term.
Long-term capital assets are assets held for more than 36 months
before they are sold or transferred. In case of shares, debentures and
mutual fund units the period of holding required is only 12 months.
Different rates of tax apply for gains on transfer of the long term
and short-term capital assets. Gains on short-term capital asset are
taxed as regular income.
Computation of Capital Gains
Capital gains are to be computed by deducting the following three
amounts from the consideration money received on transfer of the
asset.
* The actual cost of the asset or its estimated market value as on
1.4.81, if acquired earlier
* The cost of improvement, if any, for the asset
* Expenses incurred on transfer of the asset; and
In case of a long-term capital asset, the costs are increased as per a
Cost inflation index for the year.
Exemptions from Capital Gains
In case of Individuals and HUF, long-term capital gains are exempt if
the sale proceeds are reinvested in certain assets.
Some examples:
* Profits on sale of residential house is reinvested in a new
residential house.
* Long term capital gains are invested in notified bonds
These exemptions are subject to certain conditions and the
reinvestment has to be made within the prescribed time.
Other Sources Income
Any income other than (a) salary, (b) house property income (c) Income
from business or profession, or (d) Capital Gains income, will be
taxed as Income from Other Sources. Examples are interest from
deposits, winnings from lotteries, races, income from the hiring out
of machinery, or machinery compositely with building, royalty,
copyright fees, family pension, dividends other than from domestic
companies and mutual funds etc.
more at mumbaipropertyexchange.com
FAQ Tax Matters / Income from House Property?
What do I state under the head- Income from salary?
Your office accounts department will in due course give you a document
called Form 16. It is basically a summary of your income from all
sources including salaries and the deductions that you are eligible
for. The gross amount of salary inclusive of taxable value of the
perks is to be taken directly from Form 16. Take care to attach form
no.16. Without it the return would be considered irregular.
Just remember to include the deductions allowed. There is the ad hoc
deduction allowed called Standard deduction. The Professional tax that
you pay is also deductible.
How do I deal with Income from House Property?
Now this gets slightly complicated. What you are doing with your
property will determine the tax treatment. If you are living in your
own home, the tax treatment will be different from when you are using
it for business or a profession.
The owner, or the deemed owner of a house property, inclusive of the
appurtenant land, is taxed on the �annual value� of the property under
the head �income from house property�. Where the house property is
used for carrying on any business or profession, the income is not
treated as income from the house property, but as business income.
The annual value of a self-occupied property is taken as �nil�. Where
there are more than one such self-occupied properties, only one
property, as per the choice of the assessee can be taken at nil value.
All others will be treated as let out.
Where the annual value is taken as nil, all the deductions allowed on
let-out property other than the interest on borrowed capital, are not
allowed.
Where there is more than one house or in the case of let-out property,
the �gross annual value� is the maximum of (i) municipal ratable value
(ii) actual rent if the property is let out and (iii) fair rent. The
�net annual value�(NAV) is arrived at by deducting municipal taxes
actually paid during the year.
From this NAV, the following deductions are permitted :
a) One-Fourth of NAV is deductible, for repairs and rent collection
charges irrespective of the actual expenses incurred.
b)Expenses on (i) Insurance premium (ii) ground rent (iii) annual
charge, not being a capital charge and not being a voluntarily created
one (iv) land revenue (v) irrecoverable rent and (vi) State tax.
c)In the case of a let out property, vacancy allowance is deductible
if it remains vacant during a part of the year. The amount deductible
is that part of the NAV (not annual rent) on a pro-rata basis. This
deduction is however not admissible if the property remains vacant
throughout the fiscal year. It has to be let out for some part of the
year, even for one day.
What about deductibility of interest on housing loans?
If the property has been acquired, constructed, repaired, renewed or
reconstructed with borrowed capital, the interest payable is
deductible. In the case of let out properties, the entire interest
payable can be set off. In the case of self-occupied property interest
is deductible up to Rs. 75,000 but only on capital borrowed after
1.4.99 and if the acquisition or construction of the property is
completed before 1.4.2001. This terminal date has been raised to
1.4.2003 and the amount of interest deductible to Rs. 1,00,000 by the
last Finance Act. The 2001-02 budget raises this deduction further to
Rs. 1,50,000.
Then again, this relief is allowed only when the income from house
property becomes chargeable to tax. In other words, the construction
should be complete, the flat should be ready for occupation and the
municipal annual value is known.
Take care to disclose the address of the property, its nature -
whether let out or self occupied, and the computation of net income by
way of a separate annexure.
I have a side business. How do I deal with this ?
This is fairly straight forward. Remember to attach annexures stating
the computation of income from the business or profession, the profit
and loss account, balance sheet with the relevant enclosures,
including auditor's certificate along with the return. Take care to
suitably modify and adjust any disallowable expenses, claims, brought
forward losses,depreciation etc., if any, to arrive at the accurate
taxable profit or deductible loss if any.
more at in.taxes.yahoo.com/
How home loans help you save taxes
The average age of person/s having own residential accommodation has
come down substantially from about 42 years in the financial year
2001-02 to 31 years in the financial year 2006-07, as per the National
Housing Bank estimates.
Do you know how has this become possible for a vast number of young
Indians to own their dream homes? This was made possible because of
lower interest rates and most importantly tax sops.
Why are tax sops so important?
Over the last few years, the major tax sop available to the employees
was in the form of a standard deduction, which is now withdrawn. There
are virtually no tax sops available to the employees, who are having
significant taxable income and tax liability.
The investment opportunities for the purpose of tax planning are also
limited with a cap up to Rs 1 lakh only. Hence, housing loans have
become an attractive proposition to save taxes, apart from other
equally important aspect like fulfilling the dream of owning a house.
What are the tax sops available through housing loans?
The first and the foremost tax sop is the interest amount that you pay
on housing loans. The interest on housing loans in the initial years
is the major component of the EMI you pay. The interest may exceed the
rental income from house property, resulting in loss from house
property.
In the case of self occupied residential houses, the entire interest
is the loss from such house property. This loss can be set off against
income from other heads such as salaries, business or profession.
The next important tax sop is the installment paid on housing loans.
The installments are allowed as a deduction from the gross total
income on par with other tax saving investments u/s 80C of the Income
Tax Act.
What kind of housing loans are eligible for tax sops?
Housing loan can be taken for the purpose of acquiring or constructing
a property. Housing loan taken for the purpose of repair, renewal or
reconstruction of the house property is also eligible for tax sops.
What kind of house properties is considered for deduction of interest?
All kinds of house properties are considered for allowing the
deduction of interest on loans. The gross annual value from house
property is considered for the purpose of allowing deduction of
interest on loans.
How is gross annual value from house property determined?
If the house property is let out, the fair rental value of such house
property is considered as gross annual value.
*
Tips for the first time home loan borrower?
If a person occupies a house property for her/his own residential
purposes, such residential property is considered as self occupied and
there is no income chargeable as 'income from house property'.
If a person occupies more than one house property for her/his own
residential purposes, only one house is considered as self occupied,
according to her/ his own choice. The other house/s are deemed to be
let out and the gross annual value is determined on the basis of the
municipal valuation for such house property.
If a person occupies a house property for self occupation for part of
the year and lets it out for another part of the year, she/he will not
be eligible for the benefit of self occupation and the gross annual
value will be determined as if the house property is let out.
If a person has a residential house, comprising two or more dwelling
units, out of which one is self occupied and the others are let out,
the gross annual value is determined on the basis of fair rental value
for the dwelling units, which are let out. The gross annual value will
be nil for the dwelling unit, which is self occupied.
Net annual value
Net annual value is derived after deducting municipal taxes actually
paid from the gross annual value of the house property, which is let
out. In the case of self occupied property, there will be no deduction
towards municipal taxes.
Interest on housing loan
Interest on housing loan is allowed as a deduction from the net annual
value of the house property. The following major points in connection
with the allowance of interest on housing loan need to be considered:
~ Interest is allowable up to a maximum of Rs 1,50,000, provided the
loan is taken on or after 1st April 1999 for the purpose of
construction or acquisition of house property.
*
The 'smartest' home loan EMI solution
~ Interest is allowable up to a maximum of Rs 30,000 only, if the loan
is taken before 1st April 1999 or if the loan is taken for the purpose
of reconstruction, repairs or renewals of a house property is taken
before or after the cut off date, ie, 1st April 1999.
~ Interest is allowed as an expenditure on accrual basis, ie, if such
interest becomes due but is not paid during the year.
~ Interest is allowed as expenditure even if the property is self
occupied and there is no gross annual value.
~ Interest is allowed as expenditure only if the house property is
acquired or constructed within 3 years from the end of the financial
year, in which the loan was taken.
~ The person extending the loan shall issue a certificate to the
borrower about interest payable during the financial year.
~ Interest payable during pre-construction period will be allowed in
five equal annual installments, commencing from the financial year, in
which the house is acquired or constructed.
~ Interest on unpaid interest is not allowed as a deduction.
~ Interest is allowed even if there is charge on the house property.
Standard deduction
In the case of properties which are let out, there will be a standard
deduction @ 30 per cent of net annual value, irrespective of any
expenditure incurred towards the house property. In the case of self
occupied property, there will be no standard deduction.
Loss from house property
There may be a loss from house property, after allowing the deductions
towards municipal taxes, standard deduction and interest on housing
loan.
*
Home loan terms you must KNOW
This loss from house property can be set off against income from other
heads of income, such as income from salaries, business or profession,
capital gains and other sources.
If the loss from house property cannot be fully set off against income
from other heads of income, it can be carried forward and set off
against income from house property in the subsequent years. This can
be carried forward up to a maximum of 8 assessment years.
Thus, if there is a loss of say, Rs 1 lakh from house property, after
setting off against income from other heads, during the financial year
2006-07, it can be set off against income from house property up to
the financial year 2014-15.
Installments paid on housing loans
Installments paid on housing loans are allowable as a deduction u/s
80C on par with other deductions allowed u/s 80C. Thus the maximum
limit of deduction u/s 80C along with other deductions u/s 80C, 80CCC
and 80CCD is Rs 1 lakh.
The installments may be towards the amount due under any self
financing or other scheme of any development authority, housing board.
The housing loan may be taken from the housing finance institutions,
banks or even the employer, where such employer is a public
company/public sector company/university/co-operative society.
The installments actually paid during the financial year only will be
allowed as deduction unlike the interest on housing loans, which is
allowed on due basis.
Some important hints for tax planning
~ The house property shall be registered in the name of the person,
who intends to claim deduction towards interest and installment.
~ In the case of working couples having substantial taxable incomes,
it may be worthwhile to register the housing property in the joint
names and take separate housing loans to claim deduction of interest
and installments.
~ If possible, the EMIs may be planned in such a way that the payments
towards principal part of the loan do not exceed the limits available
u/s 80C.
Read more at http://202.54.124.133/getahead/2007/sep/12tax.htm
Monday, March 10, 2008
Express Highway to Hyderabad Airport. THE BIG LIE EXPOSED
You have read in News Papers, the Govt and HUDA claiming that the
Express Highway will be completed before end 2008 so that traffic will
"flow" from Airport to Guchibowli! "Just a few months delay; that is
all!" Do not get taken for a ROYAL RIDE! Read through the Report and
be updated about the TRUTH ON THE GROUND.
Our team tried to carry out an "expedition" today (04.03.2008) from
Guchibowli to Shamshabad, along the route of the Express Highway which
according to the Govt. will be ready, in a few Months. In June 2007,
we had to call-off trip, after Himaayat Sagar, at the Large Hillock.
And we are sure our readers will not be surprised to know that after
almost a year, we had to cancel the expedition again! Its impossible
to cut through the place, even by walk.
The Express Highway is now an incredible mess. Excavation, blasting
and clearance of debris of mammoth scale is pending in large
stretches. Between Rajendra Nagar and Himayat Sagar, gigantic
structures have to be erected to carry the road from ground level up
to the Hills and through that.
Except a few gutters, all bridges/changeovers/ junctions etc are in
very basic state of work. Most have not even seen excavation, yet.
Load-bearing embankments have to be built all along. Several Kms will
be of at least 30 to 40 feet high! Such retaining structures itself,
will take years to build. And work can start only when excavation is
completed. Future looks depressing.
Mr. Piyush Kumar had blamed, in the media, AP Police Academy and
Muralee Mohan for delay. But if we take a look at the condition today,
work progress at APPA, Puppalaguda etc are far ahead, compared to
areas where land was always available. The inefficient director has
been throwing wool over people's eyes, for too long! Its nice to see
that he is relieved of work, on 28th February.
EXCLUSIVE VENTURES VERDICT:
The Expressway from Guchibowli to Airport with just 50% width of road,
will be available for traffic ONLY after 3 to 4 years. DO NOT EVEN
DREAM to travel till 2011!
The work progress is a telling example of a non performing Govt. This
project now has almost gone to dogs.
It will take a very efficient Government years, to put this project,
back on track.
Our Expectation:
* Ready for use by Commuters (with 50% road width) - 2011 or Later
(Let the Govt. prove otherwise!)
* Project Percentage Completion as of March 2008 - ONLY 20%
* To achieve partial completion by 2011, we need a doer! Someone
like Mr. E Sreedharan, the Man who built Delhi Metro and Konkan Rail.
Defenitely not Piyush Kumar!
WE HAVE NOTHING MORE TO ADD, EXCEPT COPY THE COMMENT MADE BY US IN
JUNE 20007 REPORT AND REITERATE THAT THE TARGET FOR COMPLETION, NOW
STANDS AT 2011!
QUOTE FROM JUNE 2007 REPORT
"We found that with just few months away to 2008 March, even
construction team can not travel from APPA to Shamshabad!!. (This is a
10KM stretch and the workers or engineers can not move from one end,
to the other. That summs up the situation!) Miles of hillocks are yet
to be cut and there is no ACCESS, at all! We were able to move from
Guchibowli upto APPA and then for another 2 Km, by bike, through the
mud tracks used by trucks. That is all. It gets stuck there with a
huge virgin hill, looking down and making a pass! We rock climbed and
reached the top. What we saw was heart breaking! Unending rough
terrain, yet to be touched."
"Road building can never be done overnight. It's a very lengthy
process. The road width has to be excavated deep and all soil removed.
It has to be replaced with red earth, layer by layer. Each layer has
to be rolled and cured. The surface preparation with broken granite
also happens layer by layer. There is no short cut at all. Let alone
flyovers, culverts, underpasses, even plain road will not be seen in
several stretches, by 2008 March."
*Read these at exclventures*
Friday, March 7, 2008
Real estate prices in Hyderabad cooling off
IT'S VERY TRUE THAT PRICE IS NOT GOING UP
300% HIKE WAS NOT NATURAL SO THERE SHOULD BE SOME PRICE CORRECTION
PEOPLE CAN'T AFFORD A FLAT AT 1 CRORE. THEY WILL TRY TO LOOK FOR HOUSE
IN OTHER CITIES
IT'S NOT LIKE THIS THAT YOU NEED TO LIVE IN HYD. YOU CAN LIVE IN OTHER
CITIES ALSO.
Now Read the article ....
Real estate prices in Hyderabad cooling off
Higher interest rates, input costs slow growth
Growing demand
Sector shows promise to grow as players get funds for bigger projects
Demand for villas, townships, gated communities expected to grow
Shortage of skilled plumbers, masons, electricians a big challenge
K.V. Kurmanath
Hyderabad, March 5 After a dream run of three years, it is time for
the real estate prices in Hyderabad to mellow down. Prices, which shot
up by up to 300 per cent in most areas, have started cooling off,
witnessing very low growth rates or stagnation.
Several factors have contributed to this. While higher interest rates
discouraged individual buyers as cost of flats went up by 50 per cent
just on this count, steep rise in input costs and stricter rules
shooed away the mid-level builders from the scene. This has led to a
freeze on construction activity for some time.
Despite these negative factors, the sector shows promise to grow as
players with muscle get funds for bigger projects like townships and
gated communities. Rajiv Gandhi International Airport, which is going
to be commissioned on March 16, and over 40 SEZs coming up in and
around the twin cities too would act as trigger for real-estate growth
in the next few years.
"Despite the hiccups in the short-term, there is going to be a time
both for the development and construction segments," Mr Y. Kiron,
Chief Executive Officer of Suchir India real-estate developers, told
Business Line.
Niche products
He felt that demand for niche products such as villas, townships and
gated communities would grow.
"At Rs 3,500-4,000 per square feet, a comfortable flat would cost
about Rs 90 lakh, excluding taxes and budget for extra fittings. This
could prompt people to go in for a villa, which gives them the feeling
of owning a home," he reasons.
Mr Sudhir Reddy, Chairman and Managing Director of infrastructure
major IVRCL, said there would always be demand for certain locations.
The biggest challenge, however, is providing an enabling environment
to support the new projects that plan to develop millions of square
feet, including in some high-rise buildings. "Do we have enough number
of skilled plumbers, masons, electricians," Mr Kiron asked.
"While interest rates on housing loans have eased a bit, large
builders from Hyderabad and across India are launching mega projects
across Hyderabad. However, prices are not likely to go up
significantly as supply is more," Mr Marutish Varanasi, Director of
VRNET Consulting, said.
Mr S.N. Reddy, President of Builders Association of Andhra Pradesh,
said there was lull as transactions came to a standstill in several
areas.
Property lock-ups
Stating that the boom was artificial and that the prices skyrocketed
unreasonably, he said the irrational rise in prices resulted in
default of land deals. "Notional hikes in prices have resulted in
lock-up of properties, with people deciding to keep their properties
in hope of better realisations," he said.
Mr G. Yoganand, Managing Director of Manjeera Constructions, pointed
out that it had become prohibitive for buyers.
"EMI per lakh has gone up to Rs 1,100 from Rs 700-725 a few years ago.
As a result, the repayment burden has gone up by 50 per cent upfront.
Besides, costs of cement and steel have gone up significantly, making
it impossible for buyers," he said.
Extraneous factors such as NRIs losing confidence in investments in
the US and continued encouragement to IT and other sunrise sectors
would drive growth, he added.
