CHEQUE ENCASHED BY BUILDER AFTER I-T RETURN DEADLINE? YOU CAN STILL CLAIM TAX EXEMPTION, SAYS TRIBUNAL

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In a relief to many flat buyers, the Income-tax Appellate Tribunal recently held that if a cheque is encashed by the builder after the deadline for filing income-tax return, it will not debar the taxpayer from claiming I-T exemption available on reinvestment of long term capital gains (LTCGs) in RESIDENTIAL PROPERTY.

Tax experts say this does not apply to post-dated cheques. Builders typically ask for post-dated cheques, if a flat is booked during the construction stage.

If a taxpayer makes a profit on sale of a residential house s/he has held for two years (the 2017-18 budget has reduced the holding period from the earlier three years), it is treated as an LTCG, which is taxable at 20% with an adjustment for inflation, referred to as indexation benefits.

But, if a component of LTCG is reinvested in another house in India within two years of the sale of the original house, the taxpayer can claim a tax exemption under section 54 of the I-T Act. Consequently, the taxable component of LTCGs is reduced to the extent of the reinvestment, which results in a lower tax outgo. In case the amount is not reinvested by the due date of filing I-T return, the taxpayer has to deposit it in a separate bank account under the capital gain account scheme.

The ITAT heard the case of Akansha Ranju Pilani who had earned Rs 1.6 crore on sale of property on August 2, 2011. He purchased another residential property on July 26, 2012 for Rs 2.75 crore and claimed tax exemption. While he had issued several cheques for the purchase price to the builder on the date of the agreement, cheques for Rs 62.21 lakh were encashed by the builder after the expiry of the date for filing the I-T return.

The I-T officer held that as the unutilised amount of Rs 62.21 lakh was not deposited in a separate bank account, to this extent the tax exemption claimed by Pilani should be disallowed. The taxpayer that “once cheques have been issued, his liability is fulfilled and it constitutes utilisation of the sale proceeds of the old house.”

He pointed out that the cheques were issued to the builder on July 26, 2012, prior to the due date of filing the I-T return, which fell on August 31. The ITAT thus decided in favour of the taxpayer.

“This decision relies on a tenet set by the Supreme Court that the date of payment in case of a cheque is its date of delivery. On encashment by the recipient the payment is complete, but it relates back to the date of handing over of the cheque (or delivery date),” explains Gautam Nayak, tax partner, CNK & Associates.

However, Nayak sounds a word of caution. “If post-dated cheques have been given to the builder, then the taxpayer should ensure that the unutilised sum is deposited with a separate bank account before the due date of filing the I-T return. In such cases, the date of delivery will be the date mentioned on the cheque.”

2 AND 3 BHK FLATS IN GHODBUNDER ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

Source: MAGICBRICKS.COM

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

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REAL ESTATE, CONSTRUCTION TOP EMPLOYMENT GENERATORS IN APRIL: REPORT

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The construction and real estate industries are generating employment demand for skilled workforce as the sectors are gearing up for growth following the government’s agenda of providing affordable housing to people, a report said.

While the overall talent demand was up by three per cent during April 2017, real estate posted a 7 % rise in talent demand and the construction sector saw a 6 % rise in demand, according to the latest RecruiteX, the recruitment index by TimesJobs.

“Our RecruiteX report reflects the growth of the Indian middle class and their rising purchasing power, which has converted the dream of owning a home into tangible demand for affordable housing. When coupled with Prime Minister Modi’s drive to create a business-friendly environment, drive real estate growth, and create jobs, the sector is on a hiring spree to take advantage of the next growth wave,” TimesJobs Business Head Ramathreya Krishnamurthi said.

While construction and real estate were the top hiring sectors during April 2017, logistics, petrochemicals, IT, telecom and BFSI also hired significantly during the month, it said.

Business managers, consultants, hospitality, logistics and BFSI professionals reported significant rise in demand, it added.

The report said, among key locations, while Bengaluru and Pune posted the maximum rise in demand, Ahmedabad and Indore were the top hiring among the non-metros.

When it comes to states, Maharashtra (excluding Mumbai and Pune) posted a five per cent rise in demand, it said.

Hiring gained momentum for experienced professionals while it dropped for freshers, it said.

Candidates having over 20 years of experience posted the highest rise in talent demand in April 2017, it added.

3 BHK FLATS IN GHODBUNDER ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

Source: MAGICBRICKS.COM

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

THESE ARE THE PROPERTY TRANSACTIONS FOR WHICH PAN CARD IS A MUST

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An individual’s Permanent Account Number, is compulsory for certain transactions involving immovable property. Here’s a look at cases where it is required and the consequences of not providing this document

With rapid computerisation, an individual’s PAN (Permanent Account Number) has become an important document, for many financial and non-financial transactions. It is equally important for buying or selling properties or leasing it out.

For purchase of property

When you buy an immovable property, other than an agricultural land, for a value that exceeds Rs 50 lakhs from a person who is a resident of India, you have to deduct tax at the rate of 1%, at the time of payment to the seller or builder.

Generally, for the purpose of depositing TDS (tax deducted at source), you need to have a TAN (tax deduction account number). However, as this requirement to deduct tax on immovable property purchase is applicable to all tax payers, the law exempts individual tax payers from having a TAN. Instead, you need to have a valid PAN, to deposit the TDS and comply with the law. This is applicable, even in cases where you do not have any taxable income and are therefore, not required to file any income tax returns (ITR).
Moreover, as per the present law, the seller in such case, should furnish you with his valid PAN. If the seller fails to do so, you are required to deduct tax at the rate of 20%, instead of the prescribed 1%.

For getting credit for TDS, with respect to rental income

The law requires a person paying any rent for an immovable property (whether land, residential house, commercial property or even factory premises), to deduct tax at source at the rate of 10% from the rent, in case the amount of rent exceeds Rs 1.80 lakhs in a year.

In case the landlord does not provide his PAN, the tenant has to deduct tax at the rate of 20% on the rent. Moreover, in case the PAN is not provided, the landlord will not get credit for the TDS. So, a landlord who does not furnish his PAN, will face a double whammy – while the tax will be deducted at 20% instead of 10%, the landlord will not even get the credit for the 20% TDS.

Additionally, the failure of a person to intimate his valid PAN to the deductor, as required by law, can attract a penalty of Rs 10,000.

For receiving income without deduction of tax at source

The tax laws allow you to enjoy rental income, without tax deduction at source, by furnishing Form No 15G if you are below the age of 60, and by furnishing Form No 15H if you are a senior citizen. Forms 15 G and 15H are treated as invalid, if a valid PAN is not mentioned on the form. Consequently, the payer of income, shall deduct tax at a higher rate of 20% on the rent.

As per the existing law, you can make an application to your TDS officer, for issuing a certificate to you that entitles you to receive the rent without TDS or TDS at a lower rate than the prescribed 10%. However, this form shall also be treated as invalid, if you do not mention your correct PAN.

The law also requires you to quote the PAN of the buyer and seller, for any transaction in immovable property, where the value exceeds Rs 5 lakhs. The registrar who registers the document, is required to ensure that the Permanent Account Numbers are mentioned on the documents relating to the sale and purchase of the immovable property.

So, the registrar can refuse to register the document for sale/purchase, if the PAN is not furnished. However, you can submit Form No 60 with the address proof, like ration card, passport, driving licence, etc., in case you do not have a PAN.

3 BHK FLATS IN GHODBUNDER ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

SOON, TRAVEL BETWEEN BORIVLI AND THANE IN 10 MI-NUTES USING UNDERGROUND SGNP TUNNEL

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Soon, Mumbai residents will be able to travel between Borivli and Thane in 10 minutes owing to an 11-km underground tunnel passing through the Sanjay Gandhi National Park (SGNP). The state wildlife board recently gave the Maharashtra State Road Development Corporation (MSRDC) permission to carry out an on-ground survey at the national park.

This development assumes significance as the Rs2,000 crore project requires several envi-ronment clearances. Environmentalists have opposed the project, saying would affect the ecological balance of the area.

“We got permission for a topographic survey, which our consultants have started. After we receive a few other permissions, we will start our geo-technical survey to study the strata. Following this, we will prepare a detailed project report ,” said a senior MSRDC official.

Proposed in August 2015, the six-lane tunnel will connect Tikuji-ni-Wadi in Thane and Ekta Nagar on the Western Express Highway in Borivli. Currently, the 23-km distance between Thane and Borivli — via Ghodbunder Road — takes almost an hour or even more, if there is a traffic jam. Around 70,000 cars travel across Ghodbunder Road daily.

Thane and Borivli are separated by a chain of hills, most of which are part of SGNP. Signifi-cantly, SGNP’s reserved forest is under threat owing to encroachments. In March last year, the high court ordered the demolition of these encroachments.

3 BHK FLATS IN GHODBUNDER ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

Source: HINDUSTANTIMES.COM

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

REALTY INDUSTRY HAILS RBI’S DECISION TO ALLOW BANKS TO INVEST IN REITS/INVITS

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Though the real estate industry was disappointed by the RBI’s decision to leave its benchmark lending rate unchanged at 6.25%, on April 6, 2017, for the third policy review in a row, the sector has welcomed its decision to allow banks to invest in REITs and InvITs

Welcoming the RBI’s decision to allow banks to invest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), realty sector experts said this move will give the much-needed boost to the industry by bringing in liquidity.

Banks are allowed to invest in equity-linked mutual funds, venture capital funds (VCFs) and equities to the extent of 20 per cent of their Net Owned Fund (NOF). “This is a landmark decision. It will allow greater institutional participation in the real estate sector. Banks will now have route to investment into real estate, in turn, helping the liquidity within the sector,” said Anshul Jain, Cushman & Wakefield managing director, India. The Securities and Exchange Board of India (SEBI) put in place regulations for REITs and InvITs and requested the RBI to allow banks to participate in these schemes.

“This move has shown the faith RBI and SEBI has in real estate investment foreseeing positive and secured returns, in the mid to long term, on account of steady economic growth. So, it can be viewed as a sign of maturity and a step towards institutionalisation of real estate in India,” he added.

NAREDCO chairman, and DLF CEO, Rajeev Talwar said, “This step has the potential to usher-in large number of REITs’ listings in India, by offering a safe asset class to invest in and also provide competition to foreign institutions. For banks, it offers an additional important asset class for investing.” Talwar noted that for commercial real estate companies, once REITs pick up, it will bring liquidity, and free up capital that will help lower overall costs. “We now look forward to detailed norms and guidelines for banks’ investment in REITs, by May end,” he added.

REITs and InvITs can be a good source of liquidity for the real estate sector

FICCI President Pankaj Patel said the decision is encouraging and should offer a good source of liquidity for real estate companies. “We look forward to detailed guidelines on this subject by the RBI as well as further instructions and final guidelines with regards to merchant discount rates for debit card transactions,” Patel added.

Surendra Hiranandani, chairman and MD of the House of Hiranandani, said that with the banks investing in the Trusts, there will be higher liquidity in the system, which will help the cost of capital for developers in the commercial segment to decrease in the future. He said the decision to hike the reverse repo rate by 25 bps to 6 per cent, will control the liquidity surplus in the system.

Angel Broking’s senior equity research analyst-banking, Siddharth Purohit said “Though further clarity is sought on the mechanism in which this shall be adopted, it can still be sentimentally positive for listed realty and infrastructure players.”

2 BHK SPACIOUS FLATS IN WAGHBIL, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

Source: HOUSING.COM

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

IN THE GRAND SCHEME OF THINGS

Prescon Realtors & Infrastructures Private Limited

Are you seeking a new abode? Fret not, as developers are offering unique customer-friendly schemes and incentives that you can leverage upon to seal the deal, say experts

Attractive freebies, exciting offers and attention grabbing payment plans ¬ are some of the key in centives being offered by the developers in order to entice the home-buyers and make their homesearch easy. Amit Parsuramka, CMO, Omkar Realtors says, “Developers tend to dole out a variety of offers to their potential buyers so that they invest in their respective projects. And these exciting deals are to hook the interest of the buyer and cash in on consumer psychology.“

Experts are of the opinion that the realty market is witnessing an unremitting sluggishness and thus, the need of the hour is to instill confidence in the buyers.“Ever-increasing inventory, funding issues and low sales, are key reasons. It is but natural for real estate developers to offer various schemes to entice the buyers in order to overcome the slack,“ says Vihang Sarnaik, director, Vihang Group.

FREEBIES, ON OFFER:

Interestingly, developers are getting creative with their offers with each passing day. While some are offering early bird bumper prizes on bookings for the first few flats, some are giving away all-expense paid domestic and international tours. Subvention schemes, differential payment plans, discounts on per square feet rate, discounts on premium charges and fully-furnished flats with white goods among others, are some of the many incentives offered by the builders.

Apart from these schemes, developers are also seen offering waivers on floor rise price, stamp duty and registration cost for limited periods. Sometimes, builders also offer to pay the rent. Freebies like free parking, car, fur niture, kitchen cabinet, club membership are also quite popular.

SUBVENTION SCHEMES:

“Some of the very popular schemes in the market are lower EMI home loans and attractive payment plans such as 20:80, 10:90:10, 5:95, etc,“ adds Parsuramka. These are known as subvention schemes, where the home-buyers have to make a payment of a smaller percentage mentioned in the ratio and the remaining would be funded by the bank, after it has approved the home-buyer’s eligibility to return the loan. In this case, the EMIs commence on possession or any time-frame that is suggested by the developer. However, registration of the property is compulsory in these cases.

Property consultants mention that these schemes are particularly attractive to endusers and have been quite successful in swinging irresolute buyers towards a purchase commitment. Most projects offer these schemes in the pre-launch or launch stages and they are a good way for developers to raise money for construction. “What buyers need to know while opting for such schemes is that in these, most developers charge higher per square feet (psf ) prices compared to the rates offered in construction-linked payment schemes. This is because the developers need to pay interest to banks and therefore, charge the customers a premium to compensate for this,“ says Ramesh Nair, CEO and country head, JLL India.

GUARANTEED RENTALS:

Another very popular scheme in the market is guaranteed rentals to buyers, either until possession or post-possession for a good twothree years. “This is a scheme meant to attract investors, who are in the market for incomegenerating assets (which they will not occupy themselves). Only a few builders offer this scheme and it has been noted that the lumpsum amount of 24-36 monthly rentals, is actually a discount that the developers offer their customers. In fact, this is an interesting example of how developers disguise discounts,“ adds Nair.

IN CONCLUSION:

Buyers invest into a property for security reasons and also because it’s the only asset that appreciates. And since most home-buyers make an investment once in their lifetime, they would want their homes to be delivered to them on time and since, that has not been happening lately, the buyers are moving away from the market. “Hence, developers are coming up with exciting offers so that they can lure the buyers back. And this is proving to be a winwin situation for buyers and developers,“ concludes Faiyaz Rangwala, director sales and marketing, Kanakia Spaces.

3 BHK SPACIOUS FLATS IN RAM MARUTI ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

LOAN AGAINST PROPERTY : WHAT YOU NEED TO KNOW

Prescon Realtors & Infrastructures Private Limited

While Loan Against Property Is A Cost-Effective Option For Raising Money, You Need To Assess All The Risks Involved In The Execution Of The Funds

Recently, Loan Against Property (LAP) Has Emerged As A Popular Form Of Long-Term Loans, Especially Among The Self-Employed. According To A Recent Report From CRISIL, This Loan Category Is Expected To Grow 22% Annually Over The Next Four Years. However, There Are A Few Points Borrowers Should Keep In Mind.

Key Features

As Opposed To Personal Loans, The Interest Rate On LAPs Is Lower Since It Is Secured Against The House. The Interest Rate Ranges From 11.5-15% Per Annum And The Tenure Is From 1-9 Years, Which Can Be Extended Up To 15 Years, Compared To Only Five Years In The Case Of A Personal Loan. Also, You Can Receive The Loan Amount Lumpsum Or As An Overdraft Facility.

Before Sanctioning The Loan, All Financial Institutions Will Check Your Income, Debt-Servicing Obligations And Your Credit Score. “LAPs Are Given On Freehold Property And The Owner Must Have A Clear Title To It,” Informs Rajan Ahuja, Director, Realty & Verticals, A Gurgaon-Based Real Estate Consultancy. To Reduce Risk, Most Banks Offer Loans Up To 50-65% Of The Value Of The Property, While Some Non-Banking Financial Companies (NBFCs) Go Up To 75%. The Processing Fee Ranges From 0.5-1.5%. Loans Are Approved Only When The Self-Employed Can Show An Earning Track Record Of Three Years, Usually Via Income Tax Returns.

Advantages

LAPs Allow Property Owners To Monetise An Idle Asset. Loans Can Be Taken Against Both, Self-Occupied And Property That Has Been Leased Out. The Tenure Of An LAP Is Longer And You Can Also Get A Larger Amount As Compared To A Personal Loan, Which Cannot Exceed Rs 10 Lakhs.

Disadvantages

The Key Risk In An LAP Is That You Could Lose The Property You Have Borrowed Against If You Default On The Loan Payment. Also, Unlike A Home Loan, There’s No Tax Benefit To The Salaried Individual On The Principal Amount And Interest Paid.

Points To Remember

Before Taking A Loan, Assess Your Cashflows And Repayment Capacity. “People Often Take An LAP Because It Is Cheaper But Deploy It In Avenues That Are Risky,” Points Out Vishal Dhawan, Chief Financial Planner, Plan Ahead Wealth Advisors. Taking This Loan To Start A New Venture, Could Be Riskier Than If The Money Is Used To Expand An Established Business. If You Default, Your Credit Score Will Be Affected, A Penalty Will Be Charged, And In The Worst-Case Scenario, You Could Lose The Property.

“People Tend To Put At Risk An Asset That Is Worth Much More, For A Loan Of A Smaller Amount,” Points Out Dhawan. For Instance, A Home Worth Rs 5 Crores Is Put Up As Security For A Rs 50 Lakh Loan. Instead, Explore Taking A Loan Against Share Certificates, Insurance Policies, Gold, Etc. Sometimes, Businessmen Opt For LAPs To Avail Of Tax Deduction On Interest Paid. “Borrowers Must Get Good Tax Advice. The Funds Have To Be Clearly Identifiable As Having Been Deployed For The Expansion Of The Business To Be Able To Avail Of The Tax Deduction,” Informs Dhawan. Finally, If You Expect Some Cash Flows Soon, Take The Loan As An Overdraft Facility And Not As A Term Loan. Whatever Surpluses You Get Can Be Parked In The Overdraft Account. This Will Enable You To Lower Your Interest Cost.

3 BHK SPACIOUS FLATS IN RAM MARUTI ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in