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V Nagarajan: RERA provisions necessitate 70% of funds to be parked in a dedicated account
October 29, 2017
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Exclusive to The Gulf Today

I am selling my apartment in Bengaluru and he is also an NRI. Is there any tax deduction on the selling price payable? Vadhiraj, Dubai
Yes. If the value of the property is over Rs5 million then the buyer will have to deduct TDS (tax deducted at source) at one per cent and deposit the amount with the government. In case you will have to pay capital gains on the transaction value, you can adjust the amount against the TDS that has already been deducted and pay the balance amount.

However, if you wish to avail of the concession for reinvestment in other units and avoid capital gains, you will have to claim the amount that has been deducted as a refund at the time of filing your annual tax return.

With the implementation of Real Estate Regulatory Agency (RERA), can I now hope that residential project on which investment has been made will be delivered without any further delay? Tushar Mehta, Sharjah.
Yes. In case of delay in completion of residential projects, the liability has been imposed on the developer to pay interest to the consumer. As RERA provisions necessitate 70 per cent of the project funds to be parked in a dedicated account, this will ensure that developers do not divert the funds to other projects thus safeguarding the interest of homebuyers.

My father has not left any Will for his immovable property when he passed away recently. How does the asset transfer takes place among the family members in the absence of Will? Please clarify. Sathish Kumar, Ajman.
When there is no Will, you will have to provide substantial proof of legal heirship and need to obtain the succession certificate. The district judge issues the succession certificate within whose jurisdiction your father ordinarily resided at the time of death. All the legal heirs will have to approach a competent registrar of assurances with the succession certificate and a copy of the death certificate of the deceased. Mutation of the property is also required for the change in ownership in land revenue records. The court normally charges a fixed percentage of the estate value as its fee.


Housing sales

Housing sales dropped 18 per cent year on year to 44,755 units in nine major cities during the September quarter on continued slowdown in the property market, according to survey.

New launches of homes fell by 53 per cent to 22,115 units in the second quarter of the current fiscal year due to the implementation of new real estate law RERA. It said seven cities -Pune, Noida, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad -witnessed decline in sales as well as launches, while only two cities, Mumbai and Gurugram saw rise in demand and supply.

The new RERA and goods and service tax (GST) regime impacted launches as well as sales in the second quarter of FY18. However, the sales had showed a marked improvement in September over July and August, driven by festival offers launched by most developers.

Ahmedabad saw the maximum fall in sales of 46 per cent to 2,222 units in the July-September quarter of 2017-18, over a year ago period. The decline in sales in Pune was 32 per cent to 7,214 units, followed by Noida 29 per cent to 3,606 units, Bengaluru 27 per cent to 6,976 units, Chennai 23 per cent to 2,945 units, Kolkata 21 per cent to 2,993 units and Hyderabad 18 per cent to 3,356 units. Housing sales in Gurugram rose by 60 per cent to 3,342 units. Mumbai saw 6 per cent rise in sales to 12,101 units during the second quarter of this fiscal year.

Supply addition dipped marginally by about 12 per cent q-o-q during Q3 2017, with about 7.2 million sq. ft. of development completions reported during the quarter. The top three cities, Mumbai, Delhi NCR and Bangalore accounted for almost 80 per cent of the supply addition; followed by Chennai and Hyderabad. In case of Delhi NCR, supply addition primarily took place due to the receipt of the delayed completion certificates. This resulted in a release of the pent-up supply

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The author is a business analyst
covering Indian property markets

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