Month: May 2017

According to the sources of the IT department, Kolkata Income Tax (IT) department summarized a property list of 300 of such properties, which have been typecast as Benami Properties.

The IT department of Kolkata has also revealed that the acquisition of such properties in the city and prosecution of the owners are verisimilar. The department also informed that they would come up with another analysis of the properties belonging to the owners, specifically those from West Bengal state jurisdiction. Once the investigation ends, it will be followed by raids as per the departmental sources.

Analysis says that most of these properties are from south Kolkata. Out of which 300 of such properties have been already identified. A special wing of the IT department is looking into this sector is named as ‘Benami Properties Unit’ (BPU).

According to the Benami Transactions (Prohibition) Amended Act, 2016, government agencies have the authority to seize the properties and take the Benamidaar to the courts. The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from 1st November, 2016 after 28 years of its first attestation. The act couldn’t be operative as it has certain deep-rooted glitch. A person, found guilty of frisking of benami transaction by the court, will be punishable with scrupulous custody for a term not less than a year but which may extend to 7 years and shall also be accountable to fine which may extend to 25% of the valuation of the property in standard market.

-LNN (Liyans News Network)

Real estate has been brought under 12% tax slab of GST ambit, which holds kind of poker-face impact for the homebuyers according to the market experts. There will be hardly any additional tax disbursement and cost from the GST preface.

Indirect taxes levied on the real estate selling are- excise duty, value added tax (VAT) and service tax totaling 9-11 per cent. Stamp duty is the only tax which varies from state to state. Apart from the stamp duty, all other taxes will be included in GST under the new TAX that will also allow input tax credit for the builders.   Realty sector is still unsure about the abatement of the land cost.

The current effective tax rate for realty sector is in the range of 9-11%, barring the stamp duty. The proposed rate of GST shouldn’t exceed 12%, as it would inflate the price of property further & Input credit to realty sector. This should impel the people to come within the tax net and facilitate condensing the cash element in the economy.

It’s being said that that buyers of under-construction properties will be the net outcome of savings on currently unoccupied key taxes and the percentage increase in GST rates over the existing tax rates. At present developers pay for the input taxes like- excise duty and central sales tax on construction materials. These taxes are not allowed to be outweighed against indirect taxes collected from the customers.

As per the existing tax regime, key taxes, like excise duty, central sales tax and octroi on acquirement of input materials, are paid by the developer at first and then passed on to the consumer. On the other hand, under the new tax regime, promoters would be able to get credit for input taxes paid, which would bring the cost of the construction on lower note. Also the contract between builder and suppliers will be brought under GST purview. It remains to be seen whether allotments such as parking and chosen location charges will also be measured to enforce GST.

Rajeev Talwar, chairman of realty developers’ body National Real Estate Development Council (NAREDCO) stated, “This will be anti-inflationary and won’t lead to any increase in prices for homebuyers and there won’t be any additional burden on customers.”

Mr. Mahesh Somani, honorable RERA expert of West Bengal Chapter, said, “Potential homebuyers of Bengal are more concerned of RERA implementation than GST roll out.  First thing first people who have found ideal residential properties in their preferred location through any leading property portal in Kolkata are eagerly waiting for the state to submit their draft RERA rules. RERA will bring back accountability and clarity in entire realty practice.  GST implementation won’t increase the current real estate market price as it’s a long time now that the market has been going through the slump. Under this circumstance, property price hike will flatten then sales graph even worse. I’m sure government wouldn’t want to harp the GDP of the country.”

 

-LNN (Liyans News Network)

Goods and Services Tax (GST) is likely to be rolled out from July 01. Let’s have a look at the goods that The GST Council, the apex decision-making body has chosen to be under the purview of this new tax order. The tax rates have been finalized for 1,211 items by far with mainstream products kept under the 18 per cent slab.

Let’s have quick review of the GST rate card-

Nil rate (0%)

Items that have been sidelined from tax impose such as- bread, meat, salt, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, , prasad, bindi, Sindoor, bangles , stamps, judicial papers, printed books, newspapers, , handloom etc.

5%

5% tax slab attracts goods as- fish fillet, cream, skimmed milk powder, packet paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, tent and lifeboat etc.

12%

Products which are under 12% tax slab are- Frozen meat products, butter, ghee, cheese, dry fruits in packaged form, animal fat, sausage, fruit juices, bhujia, namkeen, Ayurvedic medicines, tooth powder, incent sticks, painting books, picture books, umbrella, sewing machine, and cellphones.

18%

Items that are chosen under 18% tax slab flavored refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, ice cream, instant food mixes, jams, sauces, soups, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors.

28%

The highest slab of GST will attract products like chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, shampoo, hair dye, hair color, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use, and yachts.

“Tax rates for goods are finally here, but which tax rate will be applicable to the real estate and construction industry hasn’t been revealed yet. Yet, the market speculation is indicating towards the 12% bracket. But at present more than GST, RERA has add troubles to the entire practice of realty; the industry will have to abide by the RERA rules to be in the game,”-said Mr. Mahesh Somani– West Bengal RERA expert.

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Middle-class housings on 30 ft*40 ft plots on government’s land, within 3-18 km radius of the municipal corporations, municipalities and town panchayats across the state of Maharashtra have been proposed to be regularized by the state government.  This proposal currently in progress with the revenue department of the state and conceivably will save many middle-class families from being homeless, who ignorantly started and continue living on those government owned lands in revenue pockets. According to the sources, the number of such families crosses a thousand.

Government is likely to bring about hundreds of crores of rupees as penalty accumulated from those who apply for commeasure. The revenue department assured this penalty charge will be rather nominal and the quantum of penalty will be decided on coming Wednesday, May 24 at the cabinet meeting and the fee of regulation will be decided based on the type of urban local bodies.  As per the updated census datda it’s mostly middle class people who build houses on these 30*40 sites (1200 sq ft).

Bruhat Bengaluru Mahanagara Palike(BBMP) are kept out of this relaxation. Urban local bodies of Anekal, Devanahalli, Magadi, Malur, Hoskote and Nelamangala will be covered under this proposed relief. The illegal constructions of these mentioned areas will be benefited from this recommended alleviation. Side by side some other cities with 30×40 ft occupancy sites will be regularized.  These states are- Ballari, Belagavi, Davanagere, Hubballi-Dharwad, Kalauragi, Tumakuru, Vijayapura, Mangaluru, Mysuru and Shivamogga.

If this proposal gets approval from the government, then inhabitants won’t have to live under fear of their houses being bulldozed. This move will privilege the Siddaramaiah government to lead-in the next assembly election as this approval is likely going to rack up much brownie point for the current ruling party.

Previously, Karnataka government declared regularization on illegal development built on 20ft*30ft (600 sqft) sites located 18 km away from Bengaluru periphery. Illegal buildings, located 10 km away from the periphery in the cities like Mysuru, Belagavi, Kalaburagi, Hubballi-Dharwad and Mangaluru are still seeking regularization.

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Continuing as the leading mortgage company of the country State Bank of India now milks the marketing sector to sell the home loans. As an effective marketing effort, SBI has also determined to offer 35 basis points dispensation to the builders especially for the affordable housing development. This is another remarkable move by the nation’s biggest bank in fostering the affordable housing sector.

Currently basis point is 0.01 percentage point which is (1/100th of a percent) or 0.0001 in decimal form. Most of the cases, basis point refers to the changes in bond yields and interest rates. It is also used in the measurement of the change in percentage of an asset such as a stock. Thus, it’s a familiar term in the stock market too.

“Market will witness more positive investment coming from the genuine pockets of the Industry. With the reduced EMI, central government announced incentives and tax redemption, affordable housing sector is likely to transform as a key source of revenue for the realty industry. By far, there are element names of construction companies that are stepping in the development of the low budget flats in Kolkata, as the city is yet to meet the deadline of ‘Housing for All” within 2022,”- said Mr. Mahesh Somani, West Bengal RERA expert.

In the inauguration event in Kolkata SBI chief general manager (Kolkata circle) Mr. Partha Pratim Sengupta announced that SBI is tying up with several construction companies and offering them construction finance on relaxed terms for the development of low budget flats in Kolkata.

As per the last update SBI declared a reduction in home loan interest, according to which women homebuyers will get home loan at 8.35% for up to 30 lacs and other salaried borrowers avail loans at 8.40% interest per annum. Other competitor banks like ICICI and HDFC have started following footprint as they are all trying to gain profit from the central government’s initiative of pushing up the sale volume of real estate and recover the market through affordable housing sector.

_LNN(Liyans News Network)