“The most expensive piece of real estate is the six inches between your right and left ear. It’s what you create in that area that determines your wealth. We are only really limited 
by our mind.”-Dolf de Roos
A real estate thought
January 18th, 2012How to gain from property sale & save taxes?
September 19th, 2011When property generates income in the form of capital gains. However, you need to make the right investments to get any tax benefits on it. When you sell a property, you either earn a short- (if held for less than three years) or long-term (if held for over three years) capital gains.
Choose from the following
Invest in tax saving bonds. These are issued by National highways Authority of India (NHAI) and Rural Electrification Corporation (REC). There is a three years lock-in and only up to Rs 50 lakh can be invested. If the entire gain is invested, it is fully exempted from tax. Investment of a lesser amount will grant a proportional deduction.
Buy another residential property. There are two points to note. Firstly, if you sell a residential asset, you have to invest the capital gains in a new property. If you sell a commercial property or a plot of land, the sale proceeds have to be invested. Capital gains could be much lesser due to indexed cost whereas, the net sale proceeds is net of brokerage and other incidental costs. Secondly, the new asset has to be residential. When you sell a property – residential or commercial – the tax can be saved by investing (capital gains or net sale proceeds) in a new residential property only not commercial property or a plot of land.
Hence, the law gives you two years, from the date of sale of a property, to identify another property and invest in it. In case of properties under construction, you get three years. However, before that file the tax return.
Now, if a property hasn’t been identified and purchased before the return has been filed or before the due date of filing tax returns, whichever is earlier, the money has to be deposited in a special account called Capital Gains Account Scheme or CGAS. Doing this shows that you intend to buy a property to save the tax on capital gains. Any withdrawal from CGAS should only be for payments to be made in favour of a new property to be bought.
Lastly, the new property purchased has to be held for a minimum period of three years failing which the capital gains arising from the sale of the new property together with the amount of capital gains exempted earlier will be chargeable to tax in the year of sale of the new property.
- Business Standard
Commercial sites Gurgaon
September 17th, 2011We are actively looking at commercial land parcel at Gurgaon. The land parcels should be one acre in size at prominent locations.
Top ten points you must consider while investing for dream home
July 16th, 2011The latest court orders for development at Greater Noida Extension UP – INDIA, is a classic example of how the state governing bodies, real estate developers and the financial institutions collaborated together and make a killing. The investors are left to fend for themselves, when the development is stalled. Do not let this happen to you. Investing wisely with critical information would not lead you to a dead end.
Top ten 10 points you must consider, while investing for your dream home
- Work out the economics and investment strategy, do not over commit.
- Know the developers who you are investing with, their past business history is important
- Conduct a thorough due diligence yourself before investing
- Know the present zone status of the property in case you are going in for a future development.
- Do not invest in properties where development is still not known or records are still under process.
- Ask and demand for the related approvals / NOC’s / licences from the developer. It is your right to know.
- Read all offers / buyer seller agreements carefully before reaching the dotted lines.
- Know how well are you protected before signing the contract. It is advisable to take a legal opinion.
- Negotiate the best price with the developer.
- Talk to the financial institutions in detail, even if you are not relying for funds from them.
Don’t stretch yourself too much with a mortgage. Buy within your means.. it’s not worth the sleepless nights.
