Invest in property to Save Capital Gains Tax

When a property is sold, the gains are liable to tax. Investing the gains in another property within the stipulated time exempts you from this tax. In case you sold a property, you are liable to pay capital gains tax. Any gain or loss arising on transfer of a property is subject to tax provisions under the head 'Capital Gains'. According to the Income Tax Act, a 'capital asset' means property of any kind, which is held by an individual, whether connected with his business profession or not. Any property flat, house, building, site, farm house, commercial etc is subject to capital gains on its sale transfer.

Gains from sale transfer subject to tax

It is not only the sale of a property that triggers capital gains. Even certain specified kinds of transfers are deemed as sale and any gain thereon is subject to capital gains tax. Transfer of property means an act by which one person conveys property to another. The income arising on transfer of a capital asset is subject to capital gains tax if there is a transfer of a capital asset during the previous year. A transfer is deemed to have taken place on the date on which possession has been given of the property. If payment is received but the transfer has not been effected it will not be treated as a sale transaction. Under the income tax law, capital assets may be of two types: Long-term capital asset Short-term capital asset In case a property has been held for more than 36 months, the capital gain arising there on is treated as long-term capital gains. In case the property is transferred or sold after it was held for less than 36 months, the income will be treated as short-term capital gains.

The period of holding of a capital asset determines its taxability whether it is a long-term capital asset or short-term capital asset, and accordingly, whether you have incurred a long-term or short term capital gain loss.

Arriving at capital gains

The exact amount of capital gains is arrived at by applying the Cost Inflation Index (CII).This index is published by the Income Tax Department. The present worth of a property is arrived at by applying the CII to the cost of the property as well as any improvements made to it. This is deducted from the sale amount received by the transferor from the transferee to arrive at the capital gains.

Avenues for exemption

Some tax planning can save tax under Section 54EC in respect of long-term capital gains. You can invest the gains in a residential property or in capital gains bonds. It needs to be ensured that the conditions prescribed under the Section are strictly complied with, or else the amount claimed as exempt can be made subject to tax.

Under Section 54 of the Income Tax Act, in order to avoid paying capital gains tax, you should have bought a residential property within a period of one year before or should do so two years after the date on which the transfer took place. You can also construct a residential property within a period of three years after the date of transfer. In these cases, if the amount of the capital gains is equal to or less than the cost of the new property, the capital gains will not be charged to tax at all.

In case the new house is sold within a period of three years of its purchase or construction, for the purpose of computing capital gains in respect of the new property, the cost will be reduced by the amount of the capital gains.

Capital gains account

The amount of capital gains which is not appropriated towards the purchase of a new property, before the date of furnishing the income tax returns can be deposited in a 'Capital Gains Account Scheme' with a specified bank. The amount should be deposited before the due date for filing the income tax returns.

The amount used for the purpose of purchase or construction of a new property together with the amount deposited in the account will be deemed to be the cost of the new property. In case the amount deposited in the account is not used wholly or partly for the purchase or construction of a new property within the specified period, the amount not used will be charged to tax as income of the previous year in which the period of three years from the date of the transfer of the original property expires.

Long-term bonds

Under Section 54EC, you can also invest the capital gains within six months of transfer in long-term bonds of the National Highways Authority of India and Rural Electrification Corporation of India Ltd. Investments in these during one financial year cannot be more than Rs 50 lakhs.



Check out Properties in Thane by Squarefeet Group

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Thane: A Realty Tale

What gives Thane an edge over its counterparts? Equipped with good commercial, residential and social infrastructure along with excellent connectivity to the rest of Mumbai, Thane and its crown jewel, Ghodbunder Road are redefining the realty scene.

The story of the destination development of Thane would be in complete without the mention of Ghodbunder Road. Commonly referred to as the GB Road, this property market runs entirely through state highway 42 and connects to the Eastern Express Highway, becoming National Highway 3. No wonder, Ghodbunder Road is not only a jewel in the crown of Thane but also the property market that helped shape Thane as a premier residential market. This location defies the conventional wisdom of a property market that claims that picturesque locations are meant for luxury housing only.

The property rates of Ghodbunder road are between Rs 7,500 per sq ft and Rs 11,500 per sq ft, with the average capital values standing at Rs 9,500 per sq ft. It is an equally attractive rental market where the average rental yields are about Rs 20 per sq ft. The beauty of the location is nevertheless breathtaking. It is surrounded by towering hills on one side and with a creek view on the other. The collective consciousness of the old timers, recall it as Ghodbunder village, which used to be a deserted area. But not anymore! This location has today, transformed into a property hotspot where the appreciation has been phenomenal in the last few years, despite the overall slowdown across the city. The development of Thane, as a property hotspot, actually changed the urban landscape in this part of the world and Ghodbunder Road turned out to be the best location of Thane. The urban profile and liveability index of this location has dramatically changed over the last few years. Residential projects, retail options, a cosmopolitan crowd and lifestyle options, have truly transformed this stretch of Thane.



A realty case study

With the boundaries of Thane extend ing to new locations, Ghodbunder Road highlights the growth of the real estate market in Thane. Popular residential areas along and off Ghodbunder Road include Kasarvadavli, Patlipada, Waghbil, Kapurbawdi, Manpada. Ghodbunder Road is growing faster than any other location in and around Thane because it consists of a good mix of developments like residential townships, commercial buildings, educational institutes, shopping and restaurants, etc. At a time when many other high profile locations across Mumbai are witness to a slump in the transaction rate, this area has busted several myths. Thane is today the most preferred stretch as it provides good connectivity to the MMR. This area also provides a scenic view and is thus preferred by the upper middle class segment and now is also getting the interest level of high-end customers due to its scenic view. Thane is increasingly scaling up in the value pyramid of property and some of the developers have recently launched high-end apartments where the price range starts from Rs 15,000 per sq ft. What is proving to be a boon for the location is that the infrastructure and connectivity of Ghodbunder Road has upgraded from time-to-time to keep pace with the real estate development.

With the existing and planned infrastructure development of the Eastern Express Highway and Ghodbunder Road, the connectivity of this area to all parts of Mumbai and suburban Mumbai has enhanced tremendously. The infrastructural initiatives by local authorities TMC and MMRDA (like the construction of flyovers on Ghodbunder Road at Majiwada, Waghbil Naka and near Hiranandani Estate), further add to the connectivity.

In terms of the connectivity and the attraction quotient, Ghodbunder Road connects the Eastern Express Highway as well as the Western Express Highway via Mira Road and Borivali. The developers are hence bullish of its future growth as well. Ramesh Nair, COO business and international director, JLL India maintains that this location has a lot of fresh inventory driven by several infrastructural initiatives and good connectivity in the pipeline. The development authorities have planned a monorail network to serve as a feeder system to a Metro project planned in Thane. The MMRDA has finalised a Metro corridor, extending from Wadala to Kasarvadavali on Ghodbunder Road. The road also provides quick accessibility to Mira Road from Thane, and other micro-markets such as Mulund, Bhandup and Ghatkopar.

"Ghodbunder Road is approximately 20 kms long and links the two main arterial roads of Mumbai, the Eastern Express Highway that starts at Sion and terminates at Thane, while the Western Express Highway starts at Bandra (East) and becomes the National Highway leading to Gujarat. Due to the rapid development, the area has attracted many reputed developers, thus leading to a surge in the launch of many affordable and premium housing projects. Ghodbunder Road is interesting to developers due to the easy availability of large land parcels. From affordable apartments to premium properties, the area offers a wide assortment of housing options," says Nair.

Social infrastructure such as schools, hospitals, hotels and other amenities that are coming up in the vicinity, are adding to the charm of the location."One needs to live in a place that provides all the necessary amenities. Definitely, on this count, Thane scores over the other suburbs of Mumbai, as it is catering to the basic needs of one's habitation."

Thane is one of those rare markets where the scenic beauty of the region has been exploited for necessary urban habitation first and not luxury living .However, scaling up the luxury value chain has only been a natural evolution. The analysts hence are betting big on this market and rate it as one of the upcoming markets for the next, at least a decade, as it promises to provide an all-round living experience to a large number of people, at an affordable cost.



Check out Properties in Thane by Squarefeet Group

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Top 11 must checks before buying a second home

Verification is the key before making a house purchase. A lot has been said about the do’s and don’ts before investment. If you are still in a dilemma, then here’s a quick guide:

1. Check whether your chosen developer brand is a listed company. A listed firm is seen as transparent & accountable which directly impacts its share prices in the market

2. Physical and social infrastructure surrounding the property is astute. Not only will it ease the living condition of end-users but also help in getting good returns in future. Location of the property is important

3. Presence of street lights, police stations, fire stations and general security is an absolute necessity. High occupancy in nearby projects also ensures safety/security to some extent

4. The legal background of the developer must be checked to ensure that s/he is not involved in any legal hassles

5. The title to the land of the project and all the regulatory approvals should be in place. Verifying all documents pertaining to land title, approvals of building plans and commencement of construction is a good idea

6. Consider whether the place is a good investment and if it’s the kind of property that’s going to be attractive for the next buyer. For someone who’s planning to stay long, these details will help

7. Check the original papers, as in some cases people show only copies of the originals. Besides, this will also help to ascertain the usage allowed on the property i.e. commercial, residential or mixed. Also, find out if the property is freehold, leasehold or a government accommodation. The best practice is to get the property deed reviewed by an expert lawyer just to make sure there are no loop holes

8. Ensure all taxes have been paid on the selected property and the seller has all receipts. Before buying the property, ensure the owner has the Encumbrance Certificate. Finally, for a valid ownership, a registered Sale Deed needs to be executed, in the absence of which you will not get a valid title to the property

9. Other documents to be checked carefully include Encumbrance Certificate, Release Certificate, Surveyor's Report and finally if the owner is an NRI or is not present, then the Power of Attorney

10. The property buyer can also file an application to the PRO of the authority in order to verify the land title, approved building plan and the Completion Certificate of the property

11. All terms, conditions and stipulations pertaining to the agreement, including the delivery schedule, should be mentioned in the Sale Agreement. It must be ensured that at the time of handing over possession of the property, compensation for delay in possession, recourse to legal remedy, all are clearly mentioned. All future steps have to be taken in accordance with the same



 It is imperative to make all checks before signing on the dotted line. To avoid hassles, be in touch with the builders/dealers to address or highlight issues immediately. In case there is no action/response taken, you can knock the door of the consumer court. Maintain a file of all communications.



Check out Properties in Thane by Squarefeet Group

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Thane is becoming the first choice

With ample availability of land, excellent connectivity and stable prices, Thane is becoming the first choice for end users.

With high property prices plaguing the Mumbai realty market, Thane have always been the relatively affordable alternatives. End users seem to have become positive about Thane. Not just buyers, sentiments seem to be soaring among all stakeholders involved in the realty market as far as Thane is considered.

Boost to infrastructure and government initiatives, that would enhance development in the city, are the prime reasons for the positive sentiments. These factors are luring more buyers towards Thane, even though prices are higher than Navi Mumbai.

1. Social and Physical Infrastructure

    Renowned developers have launched their respective projects in Thane in the last three months. Ample availability of land and ease of connectivity to three main highways, Viz., Mumbai-Agra highway, Mumbai- Ahmedabad and Mumbai- Bangalore highway has attracted residential development here. With the advent of time lifestyle quotient of the city has also improved. The city houses several multiplexes, malls and showrooms for the shopping enthusiasts apart from basic facilities such as hospitals and schools.
    Connectivity of the region is set to get a further impetus with the proposed metro corridor. As per MMRDA the Line 4 of the Mumbai Metro-Wadala-Ghatkopar-Teen Hath Naka (Thane)-Kasarwadavli- will directly connect Thane to Mumbai. It is speculated that after the commencement the line would benefit 12 lakh passengers by 2031. The distance between Wadala & Kasarwadavli will be covered within 64 minutes. This will lead to a comfortable, speedy and air-conditioned journey for daily commuters. As per the inputs from Jha, almost 80 per cent of the construction of the first phase of the corridor has been completed.

2. Government Measures

Several measures by the government and municipal authorities have also added to the positivity among the stakeholders. Sentiments have surged on the back of expectations of a more a developed city.

Cluster Development: To begin with, a cluster development initiative has been proposed after a 20-year-old building in Kalwa collapsed. The plan is to repair and refurbish over 2,500 old and dilapidated buildings in the city.

The Thane Municipal Corporation (TMC) City Development Plan: The plan is to scrap the 20-year-old existing plan. This will entail demarcation of roads, thus, lending more clarity with regard to additional space for development within the city. “A new development plan is the need of the hour because Thane is already very populated and traffic snarls are a major issue here. If implemented, the new development plan would certainly give a much-needed facelift to the city.

    
Check out Properties in Thane by Squarefeet Group 

You may also contact us at - +91-22-25452903, 66543333 or Email us at - sales@squarefeetgroup.in