Tips for Green Living in Your House

 

Most of us crave to re-model our properties in India with different concepts. Few of us would like to concentrate on interior design while few others would like to convert the apartment into a healthy place to live in. One of such concepts is turning your home/apartment eco-friendly. Going green does not literally mean permanently renovating your building but to change your lifestyle and have a positive effect all around.

It does not matter if you own the apartment you are staying in or have rented it, you can still create your own eco space living without hampering the design of the house. All you need to do is follow the below simple steps;

Efficient energy use: In order to get a healthy eco-friendly home ambiance, you should make sure that you unplug all the electrical sockets connected to all your electrical appliances when not in use or not use for few hours in a day. Almost all the electrical gadgets in your home make use of the electricity and are turned off when not in use. When you turn off the equipments, they are in a standby mode and consume tons of electricity. This is more than enough to waste tons of electrical energy each day. In order to avoid this, make sure you unplug all the appliances when not in use. You can also use power strips to avoid the wastage of energy. Also make use of natural light and ventilation rather than the artificial one. If any electrical appliances are not in a working condition, recycle it rather than storing it in your room.

Keep a check on your waste: Restricting the production of waste and recycling them is one of the best options. Most apartments in India lack space, hence you need to be creative enough to store the milk crates, newspapers and other objects in your car trunk or under a closet. Avoid storing up of unnecessary items thinking them to be useful sometime later in life. The more you store such items the more you will have to clean up in future.

Efficient computer use: This is one of the most important ideas to save energy and make your place an eco-friendly one. Make sure to turn off and pull the plugs when you are not using your computer. They consume the maximum amount of energy when compared to other appliances. You can also plug your PC connections into a surge protector.

Replace your bulbs: There are arrays of energy efficient bulbs which are available in the market. Swap your old traditional bulbs with compact florescent bulbs like CFLs, LEDs, strip lights and so on. These bulbs save up to 60%-70% electricity and last 10 times longer than the normal bulbs.

Compost the waste: Every household does produce large amount of vegetable and organic residues. In such cases make a compost pit in your garden or your lawn and make a productive use of it for your flower bed or garden. If you lack space, try doing this in your neighbour’s garden or your friend’s garden.

Going green in Bathroom: Make sure you keep your bathroom clean always and avoid the growth of mould. Try the organic cotton shower or the hemp curtain with a nylon liner. This is hygienic than the PVC coated curtain and can be washed frequently to avoid moulding.

Usage of cold water: You can save up to 80% of energy if you wash your clothes in cold water.
Recycling and reusing: This is one of the most effective ways to go green in your surroundings. You need to stop the excessive usage of various appliances and gadgets. Collect all the used cans, electrical items tins and plastic items and recycle them. Avoid using disposable products and opt for recycled products.

 

Indoor plants: Having potted plants and small lawns inside your home is one of the best ways to produce fresh air. You can either cultivate ornamental plants in pots and place them inside your home or keep plants which do not need much care like bottle planting and so on. Also you can create a small lawn for your pet in your balcony. Proper care and fertilizers to your indoor gardening can make your home ambiance an eco-friendly one.

Cleaning process: Avoid using chemical cleansers all over your home to clean floors, walls, tiles and other places. Instead, use home based cleansers like white vinegar, baking soda, essential oils and so on. Home based natural products are also available in market these days.

Reduce water usage: There are various ways in which you can efficiently use water.  Installing a low flow toilet, an aerator, sink faucet and a shower head can reduce the consumption of excessive water.

Heating and cooling systems: Avoid the usage of the air conditioner during winter; instead make use of the natural air and ventilation. Also switching your room temperature to two degrees can save you a huge amount of money.

Buy organic food rather than purchasing chemical based foods. Also avoid using plastic bags and carry fibre or jute bags.

Henceforth we hope that the above tips are useful to create an eco-friendly ambiance along with a healthy life.

Home and Home Content Insurance in India

Home insurance, also commonly called hazard insurance is the kind of property insurance that offers insurance coverage to the homes. The home owner certainly counts his home as his biggest asset. Home insurance is basically required for the financial security it provides to the property in case of any loss suffered. Home Insurance has two parts—one covers the building, while the other covers the contents of the house.

Home Insurance

The home insurance policy is usually a term contract that is in effect for a fixed period of time. There are mainly two parts for insurance covered. One covers only the building, while the other covers both building and its content.

• Building structure-Insurance covers for a building structure includes compensations paid for losses due to fire, storm, tempest, flood, riot, strike, lightning, explosion & implosion, landslides and rock-slides, bursting or overflowing of water tanks, apparatus and pipes, earthquake and damages to the structure due to acts of terrorism.

• Contents of the home-This coverage is for the loss or damage of the valuables inside the home like the electronic and electrical goods, furniture, clothing, jewelry and any other precious contents inside the home. The contents are covered on the market value of the items and in case of a loss the insurance claim is paid on the value of purchasing a similar new item exempting the depreciation value. This Policy covers your Household contents only and when they are kept in the building but Jewellery is covered against snatching whilst being worn.

 

Content Insurance

Content insurance is the insurance policy that covers all movable goods and personal possessions within your home against loss or damage. Usually the contents insurance policy comes along with the home insurance policy though at times it may be sold separately. This insurance is great for tenant, landlord and property owners.

In case you sell the property during the policy period you can either do an endorsement to the policy changing the Insured premise address or also have the option to cancel the Policy. In case you have rented out your flat and moved out, if your current policy covers only the building then you can continue with same policy However, if your policy covers both the building and the contents then you need to inform the insurer and get the contents removed from the policy. You will be issued a new policy, which will cover the contents and will mention your new address as the “location of risk”.

Insurance covered under policy

• Content insurance policy covers all your Household articles like, Furniture, Fixtures, Clothing, Carpet, Linen, Electrical items like Refrigerators, Air conditioners, Washing machines, DVD players, Television sets, Tape Recorders and Electronic items like Computers are covered under this Insurance.

• Allied perils including Earthquake and Floods along with Burglary, Housebreaking, and breakdown of mechanical / electrical appliance are also covered under this policy.

• The Insurance cover the Jewels worn by your Spouse, Children and Parents or other family members residing with you. The policy covers your contents only and when they are kept in the building but Jewellery is covered against snatching or lost whilst being worn. Policies also include cover in the event of an injury in your home.

• The contents are covered on market value i.e. the cost of buying a similar new item after deducting appropriate depreciation on the basis of the age of the item. Home used for business purposes such as coaching class, Yoga and other commercial activities are not covered under this policy.

Rectification Deed: Rectification of Error

 

Sale deed is a legal document authenticating transfer of right, title and interest in immovable property and evidences devolution of the same from seller to buyer. It is executed on a stamp paper; hence any error may make the entire deal cumbersome and invite litigation. Since it is executed on valuable stamp paper, it is not possible to make fresh sale deed on every detection of error.

Correction at pre-registration stage

(1) Some common errors such as errors in names and addresses of the parties, description of the property, sale consideration etc. may be corrected on the deed itself and authenticated by all the parties.

(2) In case of factual errors such as defect in the title of the seller, measurement of the property, additional rights of the buyer etc, the relevant page should be changed, whatever may be the cost of stamp on that page.

 

Post registration stage

 

Any error detected after registration of the concerned sale deed, can be corrected by a “Rectification deed” only which also has some conditions and limitations.

Conditions

(a) Error must be genuine
(b) It must be inadvertent not intentional
(c) All the parties must agree to the rectification thereof.

Limitations

Rectification deed can rectify only factual errors NOT error of law, such as
(A) Deficient stamp duty
(B) Jurisdictional error of Sub-Registry office
(C) Basic character of transaction e.g. Sale transaction cannot be corrected as Gift
(D) It is meant to rectify defects in the original deed NOT to change the nature of the transaction OR Intention of the parties involved.

Procedure for Rectification by Rectification Deed

 

(1) Rectification deed must be signed by all parties
(2) It is to be executed on stamp Paper as per rates of registration in respective states
(3) Rectification deed also must be registered with the same Sub-registrar’s office where original deed was registered.
(4) For minor mistakes the stamp duty and registration charges are Rs.100/- each
(5) For rectification of major errors viz. names of the parties, measurement of the property, location and any other description of the property, the stamp duty and registration charges apply as per rate of registration of the original Sale deed
(6) It must give reference of the errors in the original deed which is being rectified now.

Why registration of immovable property is important?

A person is considered lawful owner of a property only after s/he gets it registered in his / her name. Section 17 of the Indian Registration Act 1908 makes it mandatory to register the document regarding transfer, sale, gift or lease of a property.

Registration of the sale deed by which the right, title and interest in a property is transferred from seller to the buyer, must be done for legitimate transition of the ownership of the property.

The Apex Court has ruled that transfer of all right, title and interest in a property would be considered invalid unless the sale deed was duly stamped and registered. Under Section 49 of the Indian Registration Act, 1908 sale deed will not have any bearing on the property and will not confer any “right to the property” if it is not registered. Further, section 23 of the same Act states that “Document of Title” must be registered within four months of execution.

However, if due to unavoidable reasons the desired registration cannot be done within the stipulated period of four months, then the buyer can request the District Registrar, for extension of another 4 months by paying a penalty of up to 10 times of the registration fee.

Usually the penalty levied is 100-300% of the registration fee. This extension of time limit for registration of “Document of Title” with penalty is allowed under Section 34 of the Indian Registration Act, 1908.

Sale deed is the only “document of title to a property” and must be prepared very carefully. Any discrepancy and / or error in the sale deed may have very serious repercussions both for the buyer and the seller. It may lead to legal tussle between the seller and the buyer or by their respective legal heirs.However, if there is any genuine and inadvertent but grave error in the sale deed then legally prescribed process is there for rectification of such error(s).

How does the new land acquisition law work?

The new land law,“Right to fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013”, will replace the old Land Acquisition Act,1894. So, how the new law will affect the Land Acquisition by Govt?

Acquisition of immovable property in India is governed and regulated by “The Requisitioning and Acquisition of Immovable Property Act, 1952” (Act 30 of 1952). Acquisition of land is governed and regulated by Land Acquisition Act, 1894. Both these acts are applicable to whole of India except the state of Jammu and Kashmir. Under both these acts the Central Govt. as well as State Governments are empowered to requisition and acquire land and immovable property for public purpose (present or future). Since land is a state matter every state Governments have their own respective land acquisition laws and rules to acquire land in respective states.

However a new bill named and titled “Right to fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013” has been passed very recently by both the houses of Parliament and after getting Presidential assent and notification will replace the old Land Acquisition Act,1894.

Once the competent authority formed for the purpose of acquisition of immovable property decides to acquire any immovable property they must send a notice of requisition under section 3 of the said act (Act 30 of 1952) to the owner of the property in this regard.

Opportunities of protection and fair compensation

1. After issuance of “notice of requisition” under section 3 and before issuance of “notice of acquisition” under section 7 of the said act, the acquiring authority gives an opportunity to the owner of the property to explain why the said property should not be acquired and after considering the causes the authority passes order as it deems fit and proper.
2. If in spite of valid reasons the authorities insist to acquire the property then the aggrieved owner may appeal to the central Government within 21 days from the date of order.
3. No property or any part thereof can be acquired which is being used by the owner as residence for himself or his family member(s) or which is used for religious or public purposes.
4. If a property is not acquired within 5 years from the date of notice of requisition, it will be released and restored to the owner.
5. Compensation for the acquired property will be paid to the owner and quantum of such compensation may be decided by mutual agreement of the owner and acquiring authority.
6. If no agreement is reached arbitrator will be appointed, the owner of the property has right to state fair amount of compensation.
7. If the owner is satisfied with the award of the arbitrator regarding quantum of compensation, he may appeal to High court having jurisdiction over the area.

Would you Prefer a Ready-to-Occupy Flat?

Most of us would like to live life the easiest way by occupy a well-furnished flat with no hassles of arranging or being impatient while waiting for a home to be completed. The latest trend of buying properties in India has experienced that most of the people prefer buying ready-to-occupy flat for innumerable reasons.

• The recent research shows that most of the serious home buyers opt in for ready-to-occupy homes. This is beneficial to them in various ways like they will not have to pay ounces of money as rent and can live in a place with all the required facilities rather than waiting for months for a project to be completed. Also, according to an investor’s point of view, a ready-to-occupy flat will get him lower returns on investment when compared to the flats under construction.

• The current generation of home buyers are much smarter than the previous generation when it comes to home buying. They know the consequences and the benefits of staying in a ready-to-move flat and an under construction flat. With the invent of various methods and rules, property buyers make sure that their investments are done at the right place which is safe and productive. It is always important that a thorough check is done before opting for a property. Other aspects like the inspection of the past projects of builders, the history of the builders and the promised facilities and quality by the builder also should be considered.

• People these days opt for a ready-to-move in apartment because there are various risks involved with other forms of properties like; An under construction project can experience a delay, difference in the planned layout, price fluctuations and many other legal issues. These issues on the other hand, have an advantage of the investors having a higher probability of returns and most of the investors buying a second home look for higher returns by investing in under construction flats.

• When it comes to property buying, most of the home buyers are keen to buy ready-to-move in flats and are the locals of the city. This shows that the mind set of people has changed who have decided to stay in areas which were disliked earlier.
• Perhaps, on the other side, depending on the stage of a project’s construction, there is an increased demand for the under construction projects when compared to ready-to-occupy apartments. Apartments/flats which are ready-to-occupy are extremely priced without considering the average middle class families which form one of the important parts of the real estate sector. The maximum numbers of people present in the real estate sector are the ones which fall in the middle class category list.
• Since the ready-to-occupy properties are quite expensive the buyers would like to opt for other forms of properties as well. In such cases the buyer is offered with subvention schemes wherein the buyer can also enjoy a pre EMI holiday. This is helpful for people who stay in a rented home.
• Other advantages of opting for a ready-to-occupy home is that the investor need not fret about paying the rent once he starts staying in a ready flat. Also the flat owner gets an immediate income through the EMIs paid by the investor. Also it gives a clear idea about the structure and the complete design of the flat.

What is a Sale agreement?

 

Property sale agreement or Sale agreement is a document in writing executed, signed and delivered by the parties to the agreement i.e. Seller and Buyer and witnessed by at least two witnesses. It is prepared on non-judicial stamp paper. In a buy /sale transaction for immovable asset, till the final sale deed is registered, sale agreement is the most important, legally valid and enforceable document.

When the seller and buyer conclude negotiations and finalize a deal, the entire gamut of the terms and conditions for the particular deal are recorded in this document which becomes the basis for subsequent actions by both the parties.

What does it contain?

This document contains the complete identification of the parties and the property, area and measurement of the property, amenities and facilities available to the buyer, details pertaining to the quality of construction, agreed consideration payable by the buyer, mode of payment of the consideration, time frame for conclusion of the deal and handing over possession of the purchased property to the buyer, penalty clauses for delay in completion of the project, registration of the final sale deed and possession by the buyer and all other relevant terms and conditions agreed by and between the buyer and the seller.

Execution of sales agreement

After due execution and delivery of the sale agreement the parties are bound to act in terms of the contract and unilateral violation of any of the terms mentioned in the agreement makes the defaulter liable to compensate the aggrieved party by proper legal adjudication. Though the sale agreement is not a “document to title” but it confers right to the buyer to acquire the property after compliance with the terms of the contract. As provided under section 10 of “Specific Relief Act,1963” party to a contract has to perform in terms of the contract and failure to act makes the defaulter liable to compensate the aggrieved party for all the losses, cost and damages.
A sale agreement may or may not be registered, however if agreed by the parties it may be registered by paying ad-valorem stamp duty and appropriate registration fee pending registration of the final sale deed. In such cases at the time of registration of the final sale deed the stamp duty and registration fee already paid is deducted from the actual payable stamp duty and registration fee. Thus it is clear from the foregoing that it is a very important document and must be prepared very carefully by competent legal professionals.

Vastu location for your kitchen door and windows

Vastu Shastra is the science of architecture, which can be applied for good construction. Vastu approved design recommendations are grounded on directional placements. These directions are applicable too for the kitchen alignment. According to Vastu recommendation,the kitchen alignment must be done maintaining some specific rules, which is relevant for kitchen door and windows positioning.

In olden days, kitchen vastu guidelines were maintained in accordance to sunlight intrusion as well as availability of wind circulation within the room. However, with the changed concept of architecture, living style, modern way of living, designing of kitchen has become compact, energy efficient, so that the place remains comfortable to work and cook. Positioning of doors and windows in the kitchen matters a lot for channeling of positive energy as well as for reversal of negative energy.

There should be a single door for a kitchen and never should have two doors in opposite direction.

In case you found two doors in a kitchen keep the north or west facing door open. Keep the other door closed. There is one additional requirement in setting the best position for the kitchen door and windows.

The kitchen door should open in a clockwise manner and never in anti-clockwise direction.

Easy maneuverity for right hand direction is the architectural reason behind this rule perhaps, however, according to vastu, doors that are opening in clock-wise direction brings prosperity and good luck for the habitants of the house. On contrary doors opening in anticlockwise manner may induce slow progress in work, delayed result, and bad result out of whole input and these results are not desirable for a kitchen.

The door of the kitchen should be placed in the north-east, north, or in the east position.

According to Vastu recommendation, the entrance of a kitchen should be from west or north side. As per Vastu this is the most auspicious alignment for an ideal kitchen entrance. In case the north entrance is not available, next vastu recommended kitchen entrance is from the south eastern side.

In the kitchen the larger window should be placed at the eastern side.

Morning sun rays are always beneficial for health and UV rays are natural germicide. Kitchen is a place where healthy foods are cooked. Therefore, maintenance of healthy ambiance in kitchen is a pre-requisite. According to vastu, bigger window of the kitchen should be placed on the eastern side. In case eastern side is not available, the second best option for placing bigger window in the kitchen is eastern –southern side of the wall from where wind and sun rays may enter the room at ease.

Small window should be placed on the opposite wall for cross ventilation

As per Vastu, the small window of the kitchen should be placed on the opposite side of the bigger window. The best option for placing a small window in the kitchen is on the southern wall of the room, or on the opposite side of the bigger window of the kitchen.

Following these tips will help in making a Vastu compliant kitchen for over all well being of a house.

Tax benefits from an under construction home

 

Taking a home loan for an under construction apartment is quite beneficial as the customer can avail the deferred deduction on the interest payable during the pre-construction period. The loan seeker can avail the entire amount as deduction in equal installments starting from the financial year up to five years and till the construction is complete.

Tax exemption for an under construction property:

The pre-construction phase is the period which starts from the date of the borrowing and ending when the construction is completed. The Indian Income Tax Act states the conditions under which an employee with salary can claim the tax rebate on the interest payment for the housing loan. The Section 24 of the Income Tax Act states that if a property is still to be constructed, there will not be any deductions on the interest payment all of those years. The interest for the pre-construction period can be availed for the deduction in the 5 equal installments from the year the construction is complete.

 

How can one avail tax benefits from an under construction property?

• The Section 80C allows tax benefit for the amount paid towards the Stamp Duty and the Registration process. However, the tax rebate on principal repayment may not be allowed when the property is under construction.
• If there is a delay in the project and the possession doesn’t happen on the given date, one cannot get the tax benefit for the principal and the interest.
• One can avail the tax benefits at the time of filing the income tax returns.

Explanation of the Section 80C:

This Section states that, for the purposes of purchase or construction of a residential house/property the income from which is chargeable to tax under the head income from house property (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head), where such payments are made towards or by way of;

•  Any installment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or
• Any installment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or
• Repayment of the amount borrowed by the assessee from

(1) The Central Government or any State Government
(2) Any bank, including a co-operative bank
(3) The Life Insurance Corporation
(4) The National Housing Bank

How to stop benami transactions of property?

Benami property ownership means ownership of a property in the name of a person who has not actually paid the consideration for purchase of the property. Benami owner(s) only lend their name(s) for purchase of a property where consideration is paid by some other person. Such lending of name is done for some gain and the property is held by the owner on behalf of some other person who has actually paid the consideration. A person lending his name for such transaction is called “Benamidar” and such transaction is called “Benami transaction”.

Ostensible ownership and Beneficial ownership Ownership

Ownership of the property standing in the name of a “Benamidar” is “ostensible ownership” but the “beneficial ownership” of the property does not vest with him, rather it vests with the person who has actually paid the consideration money.

Purpose of benami transactions

Benami transactions are a conduit to channelize black money earned through corrupt and illegal practices. This route is also used to circumvent certain socially beneficial acts such as Land ceiling act and to conceal assets disproportionate to the known source of income. Property is purchased in the names of family members, relatives, friends and sometimes in fictitious names. Such transactions are very common and rampant in real estate sector. Very recently it has been alleged in 2G scam that even some telecom companies which got 2G license, were in fact merely acting as front face hiding the actual investor behind them. The scam in Adarsh Housing, Mumbai has also revealed that a good chunk of properties therein was “Benami property”.

Benami Transaction (Prohibition) Act, 1988

To tackle the menace of black money, benami transactions and corruption, this Act was enacted in 1988. The act has provisions of imprisonment of up to 2 years and/or fine or both, but the act has never become effective because rules to make it operational could not be framed. Central Board of Direct Taxes was the implementing authority for the law and was supposed to frame the rules.

Benami Transactions (Prohibition) Bill, 2011

The Government proposes to replace the earlier act with enactment of the new law for stricter control over benami transactions by plugging off the loopholes in the existing law. This Bill has provisions for confiscation of benami property by the Adjudicating Authority after the person concerned has been given due opportunity of being heard.

Gift and relinquishment deed for transfer of immovable property

 

Of the various methods for transfer of ownership rights in a property “Gift” and “Relinquishment” are two such methods. Both the aforesaid terms serve the same purpose of transfer of property, have similar implications, but the circumstances in which these are executed are different.

Gift of immovable property

Gift is defined under section 122 of Transfer of Property Act, 1882 being voluntary transfer of ownership rights in a property, without any material consideration, where natural love and affection to a living person is the only consideration. It must be free, voluntary, absolute and unconditional except where it is given for any specific purpose such as educational, charitable and /or religious. Generally gift is irrevocable but in case of gift for specific purpose, the property reverts to the donor when the object fails due to events not depending on the will and pleasure of the “donor”. It must be made through a written document called “Gift deed”, duly accepted by the “Donee”, witnessed by two witnesses and the deed must be registered with Registrar/ Sub-registrar of assurances as mandated under section 17 of Registration Act, 1908. If the gift is made to spouse, blood relation of either of the spouse, lineal ascendant or descendant of either of the spouse, any family member then there is no tax implication except the cost of the stamp paper on which the gift deed is prepared. Though there is no restriction on gift to non-relatives but such gift is taxable.

Relinquishment of right

Relinquishment of right is referred to the surrender of one’s ownership rights and claims in a property in favor of another person. It is not defined under Transfer of Property Act. but is an established practice. Relinquishment of right is not without any consideration, the consideration may be in the form of money, exchange of property or arrangement between family members. Relinquishment of right in immovable property also needs to be done only through a written document called “Deed of Relinquishment” which must be signed by all the parties, witnessed by two witnesses and must be registered. Unlike gift relinquishment does not enjoy tax benefits and is taxed for capital gains.
In both the aforesaid cases the “Donor” and the “Relinquisher” must not be a minor, must be mentally sound and capable of taking rational decision pertaining to disposal of property and must be capable to contract.

How can a second home reduce your tax burden?

 

Buying a second home for various reasons is one of the latest real estate trends. It is a source of pride for the second home owners to own another home with sufficient income and unsullied credit. Although a second home might serve you as a great asset, it is wiser to know the advantages and disadvantages before going for a second home. One has to know the reasons to buy a second home and should know if it is for investment purpose or for personal purpose.

Most people who own two homes are confused and fret on how to repay the home loan with the high interest rates. However, there are certain situations wherein they can reduce the tax liability if they avail the deductions on home loans in case of a second home.

 

Benefits of a second home:

Having a second home can result in the exemption on interest rate:

• If a home loan is taken for a self-occupied property, the principal amount repaid will be qualified for the deduction.
• However, if a loan is taken for a second home, the interest payment will be eligible for the deduction.
• If the second home is given for rent, the loan taken for the second home will not have any limit for the deduction for interest payment.
• In case the home is yet to be constructed, an amount of interest paid during the pre-construction period will be used for tax deduction. This rule is effective for five years from the time of construction and the complete possession.
• Having a second home can increase your net worth. After buying the second home, the home appreciates the value and increases the total net worth.
• Apart from just an investment aspect, a second home also serves as a luxury medium. This also provides you peace and solace away from your regular residence.

 

The deductions will be allowed on the income from the second home:

• If you have a second home and is lying vacant, you will still have to pay the rental value. The notional or the deemed income will be added to your taxable income.
• The home owner can deduct expenses, such as municipal or property taxes paid from the deemed income.
• Also around 30 per cent of the net annual value will also be allowed for deduction.
• In case you incur any loss after the deduction of expenses from the income that you earn from the property, you will have an option to set the current year’s loss against the income from property. In case your balance continues to be low, you can proceed with the loss for about eight years.

 

Save on tax:

Having several homes will give you an option to choose a particular home for the living. However, the income from this property will be treated as nil and exempt from tax even if the home is on rent. This home will have the limit of 1.5 lakh to be deducted as loan interest. Whereas, the interest on the loan taken for the other houses will have your income deducted as tax. It is advisable to choose the house with the highest loan as the non-exempt one in order to maximize the savings.

Essential terms of purchase and sale contracts for immovable property

The transactions involving sale or purchase of immovable properties need to be handled with utmost care, transparency, honesty and dignity. If these are followed, a lot of heartache and drainage of investment can be avoided. However a common citizen may not be aware of the legal stipulations or obligations while transacting in immovable property.

Section 55 and sub-sections of the “Transfer of Property Act, 1882” confer certain Duties, Rights and Liabilities on the Seller and the Buyer. They’ve been listed below and they should be taken in to account while entering into any deal of immovable property.

Responsibilities and Liabilities of the Seller

• The seller has to disclose to the buyer any material defect in the property or in the seller’s title.
• The seller is deemed to contract with the buyer that he / she enjoys full rights over the property which he / she intends to transfer to the buyer, and that he / she has authority to transfer the same to the buyer.
• To produce to the buyer all documents of title relating to the property and to answer relevant questions of the buyer in respect of property and the title.
• To execute a proper conveyance of the property, on payment of the due amount, at a proper time and place. Generally, it is the sub-registrar’s office.
• To pay all public charges, rents, taxes, in respect of the property up to the date of sale.
• To deliver, after receipt of the price or as agreed, to the buyer all documents of title relating to the property which are in the sellers’ possession and power.

Rights and Liabilities of the buyer

Section 55 (5) (a) to (d) of “Transfer of Property Act, 1882”, imposes upon the buyer certain duties, while Section 55 (6) (a) and (b) of the “Transfer of Property Act, 1882”, entitles the buyer to certain rights, as detailed below:

Duties of the buyer

• Where the buyer is aware of the seller’s interest in the property of which the seller himself is not aware, then the buyer must disclose it to the seller.
• To pay or tender the purchase price, to the seller or his authorized agent, at the time and place of completing the sale.
• To bear any loss arising from the destruction, injury or decrease in value of the property after ownership of the property has passed to the buyer and such destruction / injury is not caused by the seller.

Rights of buyer

• To the benefit of improvement or increase in value of the property where the ownership of the property has passed to him.
• Where two properties are subject to a common charge and one of the properties is sold, the buyer is entitled to get the charge satisfied out of the other property without affecting the property purchased by him.
• To compel the seller for specific performance of the contract to the extent of the seller’s interest in the property, where he has paid the purchase price

Can a property buyer Own or occupy terrace of a society building?

 

Owning or occupying of terrace of a society building is unfair and illegal practice. 

Builder/developer has no right to sell the terrace.

Some developers of the co-operative housing societies resort to the unfair practice of selling the roof top / terrace. It has also come to light that in some housing societies, owners of the flats at the top floor claim ownership of the terrace and dissuade other owners from using the same. Both these actions are contrary to the stipulations made in law.

According to section 4 (1A), (iii), (viii), (x) and section 10(1) of Maharashtra Ownership Flats Act, 1963, builder/developer has no right to sell terrace. No measure either individually or collectively give any authority to any builder or even the society to sell terrace of a building. As per law all open spaces in a building including the terrace is a common easement for benefit of all the members, who are entitled to enjoy the same as shown in Municipal Corporation records. No single member can appropriate and deprive others of the benefit of common easement. When the BMC sanctions a building plan the terrace is not taken into consideration for the purpose of calculation of Floor Space Index as it is for the use and benefit of all the members (flat owners) of that society.

Owning or occupying of terrace of a society building is not permitted by law and if any body does that it is totally illegal. The law and BMC rules are amply unambiguous and clear in this regard and there is no provision at all under which terrace of a society building can be sold or bought. There has been a landmark judgment delivered by Hon’ble Mumbai High Court in the year 1999 in this regard while adjudicating on writ petition No. 4577 of 1985, in the matter of Smt. Ramagauri Keshavlal Virani V/s Om Walkeshwar Triveni Co-op housing society Ltd & others. Advocate Vinod Sampat an expert in Co-operative Housing Society matters is also of the same opinion and says that no person can own, sell or buy terrace of a co-operative Housing Society building.

Hence any one who indulges in such unfair and illegal practice does so at his own peril because it has got no legal sanction and is always subject to litigation and a person doing so will be on the wrong side of law.

Income tax benefit of a housing loan: Section 24

 

What is a home loan?

A home loan or the mortgage is nothing but the funding for a new home by any bank or a financial institution. The banks disburse the loan to the home owner/loan seeker with few criteria.

Basically a home loan is divided into two parts; The principle payment and the interest.
All the banks disburse full amount of the loan through cheques in the name of the builder or the concerned person. However, the amount given by the banks will be paid by the loan seeker every month by ways of EMI (Equated Monthly Installments).

The principal amount which is covered under the Section 80C and has a limit of Rs. 1 lakh will be available if the person is living in a home which is taken on loan. However, the loan seeker cannot use this exemption if the home is under construction or if he/she is not staying in the home. The only exemption which a loan seeker can avail is if he/she is working in a different city and can claim the exemption on the principal amount of the home loan under Section 80C.

 

The principal repayment towards the home loan reduces the income tax:

As mentioned earlier the income tax has Section 80 under which is mentioned the home loan principal repayment deduction. This states that the loan seeker will invest in any of the avenues prescribed in the section if he/she is eligible for the deduction of a maximum amount of Rs. 100000. This also includes investments like the ELSS, PF, LIC and others along with the principal repayment of the home loan.

Section 24 of Income Tax Act and Its deduction explained:

The Section 24 of Income Tax Act covers the amount of interest payable on such capital wherein the property has been acquired, constructed, repaired or renewed with borrowed capital. The amount of interest which is paid yearly should be calculated separately and should be claimed as the deduction each year. However, the penal interest on housing loan will not be allowed as deduction. Apparently, if the purchase price of the property is paid in installments with the interest, the interest portion of the installment will not be allowed as deduction under the Section 24. In case if there is a fresh loan raised in order to repay the original loan and the new loan has been used only for the purpose of repaying the original loan, then the interest paid on the fresh loans will be allowed as deductions.

 

Tax benefit on the interest on home loan: Section 24:

There are various ways in which the interest on the home loan is treated and the Section 24 contains the tax aspects of the interest on the home loan repayment. However, the maximum limit under the section as mentioned earlier is Rs. 1, 50,000 and one needn’t stay in the home in order to claim the benefit. The amount of interest which is paid is apparently deducted from the taxable income and hence reduces the tax liability. Also, there is no limit on the number of home one can claim. The only limit will be of Rs. 1, 50,000 on the entire amount.

What are the factors affecting taxation in joint ownership?

It’s a very common practice that when a person purchases immovable property the name of his / her spouse is added as co-owner, though the consideration is paid by either of the spouse solely through her/his own resources. In such cases the property becomes joint property and ownership thereof becomes joint ownership with both the owners enjoying equal and similar rights. The sole purpose of adding the name of spouse as co-owner is smooth transition of the property to the surviving spouse after death of the other partner.
However joint ownership does not mean or stand for property in the joint names of spouse only. It may be in the joint names of family members, friends, business partners or rank outsiders, but in most of such cases the consideration is paid by all the joint owners and generally the ownership is in the ratio of respective contribution towards the consideration money.

Taxation in joint ownership

Sometimes this simple and innocuous practice, especially where the property is jointly owned by spouse, causes litigation between taxation authorities and the assessee in respect of capital gains. Section 54 of Income Tax Act, 1961 and it’s various sub sections (54EC; 54F) provide for exemption from payment of long term capital gains tax if the property sold has been held for more than 3 years and the sale proceeds are utilized for acquisition / construction of new residential unit within 2/3 years of sale of the old property. Section 54F of the act states that the new house should be purchased in the name of the assessee. This stipulation is the bone of contention and tax authorities allow exemption of only 50% of the capital gains tax where the property is purchased in the joint names of the assessee and his/her spouse.

Legal interpretation-CIT Vs. Ravinder Kumar Arora

Hon’ble Delhi High Court in the matter of Commissioner of Income Tax (CIT) Vs. Ravinder Kumar Arora has ruled that though the property was purchased in the joint names of the assessee and his wife but the entire consideration including stamp duty and registration fee was paid by the assessee from the sale proceeds of the property owned by him. Inclusion of wife’s name as co-owner is intended to avoid litigation after death of the assessee.

The court further observed that when we are advocating for empowerment of women, acceptance of tax authority’s plea to disallow 50% exemption because the property is purchased in the joint names of the assessee and his wife, would be derogatory step. The Hon’ble court dismissed the appeal of the tax authority.

Checklist for buying your dream home

 

Lately with sky rocketing prices of land in India, plotted units have become luxury and most people are encouraged to purchase builder’s built floor or flats. In today’s consumer market flats are sold by SMS marketing and inbox are filled with property promotional messages. An aware buyer can make most out of this full of choices market. Though your dream house may have a much bigger wish list, these are few ‘should not compromise basics’ from the eye of a sustainable development enthusiast while one negotiates for more important equations like available finances/ date of possession versus maximum built up area or resale value etc. Here is the list:

Location: A builder may try selling you flat in jungle saying that sooner there will be a train/bus station for your rescue, only if you survive till then. Please consider the fact that man being social animal needs a connection with others and you may not always depend on privately owned vehicles. Consider proximity to public transport and day to day amenities.

Parking space: There should be adequate parking available for the residents and for the visitors, at what cost you get it, is secondary though. No column should come in between your dream of parking sedan.

 

Open spaces in the complex: humans have a strong relationship with the environment around. It is important to have greenery and park to walk your kids and dogs. If the property you are buying is planned to be constructed in phases, please monitor the future construction proposal for park not converting into parking later.

Waste disposal / Sewage treatment plant: Think where and how your building’s waste is disposed. Why?? It may be piled in front of your balcony, your street and places related to you, harming your environment. For example, in Pimpri Chinchwad area of Pune, a housing society was planned to have Sewage treatment plant, but the plan was out with builder moving out. Solid waste management became a huge problem for the residents later in the society. Better be cautious than being surrounded by our own waste. And if your waste can be put to some good use after recycling / treating etc.. Why should it not?

Power backup for service area/ preferably renewable energy based: If one wishfully buys a flat on sixth floor and is ready to do without elevator for good health, this may be ignored. Otherwise it is must to have all the lift cores functioning on power backup. Why renewable energy is being stressed on?? One it helps building decrease its environmental impact and other, diesel power is much more expensive in comparison and is eventually to be borne by the occupant. To everyone’s amazement, during the power failure earlier this year, commonwealth games village lifts were working when whole northern region was dark for 3 days since they had back up from solar PV.

Proper and uninterrupted supply of water / Rain water harvesting: Nothing can be worse than waiting for water when you have an important work to tackle with. Ensure regular water supply and check for municipality supply with neighbours. Trusting and respecting wisdom of our ancestors and scientists today, rain water harvesting is not just the mean of storing water for our current needs but also recharging the earth for future to come.

Well lit and ventilated rooms: All the rooms in the house receive their share of sunlight to see shining bright faces of your family. Air circulation in the house is equally valued for good health and prosperity in all sciences whether it be Indian Vastu Shastra or Chinese feng shui.

Observe orientation of your living areas: The room you consider well lit may prove to be an oven. Do check which wall receives maximum heat during harsh summers. Have they been protected with shade or covered with buffer spaces like toilets?? This may significantly impact air conditioning load of that room. Sincere suggestion is to survey the flat at different times of a day.

Electricity is metered adequately: Electricity meters are provided and you are not paying for the neighbour’s bill. A well designed space as mentioned in above stated two points will help you reduce the electricity bills in any case. Be more careful if you are opting for topmost floor. Cost and technique of the finishing on the roof will be inversely proportional to electricity bill you pay in summers.
Electrical Appliances if provided by the builder: Check for the appliances to be BEE star labelled. More stars, better efficiency and lesser operational cost.

No VOCs are used in interiors: paints and polishes used in the house should be free of VOCs as their presence may negatively impact health of occupants specially kids.

Operation and maintenance: Last but not the least, nothing works as planned if not maintained. Ask who will maintain the services and for how long?

New Project : Palm Crest, Near AIIMS, Bhopal

Belief Buidcon launches their new project, Palm Crest, Bhopal. This 36 3BHK luxurious flat project, is ideally located near AIIMS with all basic amenities in walking distance (Just see the location map below to ascertain this fact). Some new amenities to include smart card based access control systems, anti termite treatment with 10 yrs guarantee and many more have been catered in the project.

A very strong candidate for becoming either an investment avenue or for self residential purpose. Pre launch price starts from 33.90 lacs and super built up area varies from 1257 sq ft to 1363 sq ft.

 

Which home loan repayment option suits you the best?

In competitive market lenders of Home Loans innovate variety of schemes, including repayment schemes, to suit different types of prospective borrowers to attract greater number of such borrowers and fence sitters. Some of such innovative repayment schemes are given below.


Step-up Option:- This suits the “younger generation and new to employment” most. The EMI is lower in the initial stages and increases at predetermined intervals. It substantially increases the loan amount eligibility, and lower EMI matches initial repaying capacity. In assumption of steady growth in the earning of the borrower, the EMI also increases at prefixed intervals.

Step Down Option:- It is reverse of the above and suits the borrowers who are likely to retire in near future. The EMI is higher initially and is reduced at prefixed intervals, when the borrower would have retired, thus reducing post retirement outgo considerably so that he does not feel the pinch of higher EMI.

Telescopic Repayment:- It suits the younger generation having just started their careers when the loan amount to which they are eligible is less. Under this scheme they can avail loan of higher amount by increasing the tenure of up to 30 (Thirty) years. The EMI is less and the borrower has the option to pre-pay the loan when surplus fund is available.

Tranche Based Option:- Buyers of under construction property can opt for it. Generally when there is partial disbursement of loan amount, a pre-EMI interest is charged till the entire loan amount is disbursed and regular EMI starts. Under this scheme the borrower has the option to pay EMI separately for each tranche of loan disbursed and the total loan repayment period is reduced.

Pre-EMI:- To some extent it is reverse of the above but for under construction property only. The loan amount is disbursed in parts as the construction progresses and the borrower is charged simple interest called pre-EMI. It does not include the principal component. After the full loan amount is disbursed, payment of regular EMI commences.

Accelerated Repayment:- It has the flexibility of increase in EMI amount which is otherwise fixed. It suits the borrower whenever there is an increment in salary. The borrower can also make periodic payment of additional amount, over and above the regular EMI, when surplus fund is available. In this way the repayment tenure and interest outgo can be reduced.

Documents you need while purchasing a property

Documentation is an essential part of a property acquisition process. However, it may well turn out to be a complicated one. Different states in India have different requirements. There are many laws that govern the purchase of properties. There are various types of properties that you would want to buy and you’ll require certain documents while buying them. Let us have an overview of the most important legal documents to be verified in case of various properties -

(I) Purchase of freehold residential plot/house:

The main documents to be verified in such a case are -

# Copy of the sale deed through which the seller got his title to the property
# Copies of all earlier sale deeds to verify the chain of past owners of the property
# Registration details of the sale deed
# Agreement to sell the property
# Receipts of payments made by the purchaser to the seller
# Copy of the sale deed for registration purposes

(II) Purchase of property from original allottee of a government authority:

In case you purchase property from original allottee of a government development authority, i.e. DDA or MHADA, the documents you need are -

* Allocation letter
* Allotment letter
* Possession letter
* Receipts of payments made to authority

(III) Purchase of property from power of attorney (POA) holder of original allottee of a government development authority:

Apart from the documents mentioned above, the main documents you’ll need to verify here are -

# Permission to mortgage
# Authorisation letter signed by the seller
# Receipts of payments made by purchaser to seller
# Verification of signature of seller from his bank
# General power of attorney
# Special power of attorney
# Will Agreement to sell the property

(IV) Purchase of flat in a group housing society from an original member of the Society:

With the rapidly growing urbanization, there has been a surge in the number of flat buyers in India. The main documents to be verified while buying a flat from an original member of the apartment Society are -

* Share certificate issued by the society
* Lease deed of society
* Registration details of the society
* Bye-laws of the society
* No objection certificate from the society
* Approved building plan
* Title of builder
* Undertaking from society
* Allocation letter, Allotment letter and Possession letter
* Receipts of payments made to authority
* Permission to mortgage
* Authorization letter signed from seller
* Receipts of payments made by purchaser to seller
* Verification of signature of seller from his bank

(V) Purchase of flat in a group housing society from a power of attorney (POA) holder:

Apart from the ones required while buying a flat from an original member of the Society, the main documents needed here are -

# General power of attorney
# Special power of attorney
# Will Agreement to sell the property