South Bangalore vs North Bangalore is a debate that never seems to reach a conclusion. While North may boast of the International Airport, the South is not far behind with its robust infrastructure facilities and the old-world charm of the city.
Paul Goldberger, an American architectural critic once said, “Infrastructure creates the form of a city and enables life to go on in a city, in a certain way.” Truly, the way infrastructure can catalyse the real estate growth of any region is nothing short of remarkable.
About two decades ago, South Bangalore was synonymous with old residential neighbourhoods and broad roads with trees adorning the lanes. Several traditional shopping centres and old factories could also be spotted back then. Today, however, the region displays a completely transformed landscape with huge residential catchments. Due to the establishment of IT corridors and manufacturing belts coupled with several infra upgrades; it did not take long for micro-markets in the southern region to become bourgeoning residential hotspots. With high demand from the tech professionals in the area, several residential areas sprouted over the last few years.
And with the Metro chugging into the south, localities in the region will now be well-connected with the CBD areas as well as the outskirts.
So, let’s delve deeper into the growth journey of South Bangalore realty market.
Constantly Improving Infrastructure
Both physical and social Infrastructure in South Bangalore have seen constant upgrades over the last few years. These include:
NICE Road: The NICE Road, which was designed to connect Bangalore and Mysore, has helped denizens to travel effortlessly through the peripheral areas in the south and west via Tumkur Road (NH4), Magadi Road, Mysore Road, the 9km link road connecting the city centre to the NICE Ring Road, Kanakapura Road, Bannerghatta Road and Hosur Road near Electronics City.
Hosur Road: The 10km Hosur Road Elevated Expressway connects micro-markets from Madivala right up to Electronic City.
Outer Ring Road (ORR): The signal-free ORR has connected the southern part of the city with the east and the north, linking the IT hubs and the international airport.
Namma Metro: The Green Line section of Namma Metro, connecting Mantri Square Sampige Road and Yelachenahalli, was recently thrown open to public. This 12km stretch will bring South Bangaloreans on board and will also allow commuters on the north-south and east-west corridors to switch lines at the Kempegowda-Majestic Interchange.
On the Anvil
Cauvery Water: The proposed Cauvery Water Supply Phase 3 project will ensure water supply for the region, a major problem faced by the fast-moving markets in the city.
Airport: Under the UDAN Scheme, TN government is planning to build a domestic airport in Hosur Aerodrome. If this becomes a reality, then residents of South and South-Central Bangalore will just take about half an hour to commute from Electronic City to Hosur as opposed to the two-hour to Devanahalli.
IT/ITeS & Manufacturing Hub
• Traditionally home to several manufacturing industries, South Bangalore gained prominence with the setup of its first MNC in Electronics City. Developed back in 1978 by KEONICS, Electronic City is one of the most popular IT/ITeS hubs in the city. In fact, the credit for the epithet of Silicon Valley of India to Bangalore largely be attributed to this 580-acre IT Park.
• As NICE Road allows people to bypass the city traffic, it has seen active interest from IT companies who are setting up their offices around the nodes. Around PES Institute of Technology, companies like Bosch and HP along with Velankani Tech Park have their presence.
• Mysore Road being a major manufacturing hub has also catalysed the demand for affordable projects in the satellite town of Kengeri.
Due to realistic property prices, the appreciation potential of South Bangalore is relatively higher than its counterparts. For instance, there has been an approximate, 40% rise over the last six years.
All these developments have increased the focus on South Bangalore with leading developers launching their projects especially along the Mysore Road, Kanakapura Road, and Banashankari. From unspoilt beauty of the forest to a sports themed project, Sobha Ltd.is building not just projects but homes that transform lives of people aspiring high.
Top Three Markets in South Bangalore
From a sleepy stretch to a residential hotspot, the metamorphosis of Kanakapura Road can be attributed to the NICE Road and Peripheral Ring Road (PRR). The stretch enjoys seamless connectivity to central areas of Bangalore, Mysore Road and Bannerghatta Road.
It also boasts of several eminent educational institutions including International Institute of Aerospace Engineering and Management, CREST, among others.Buoyed by these factors, renowned developer like Sobha has launched a few projects along the stretch including Forest View and The Park & The Plaza.
Another stretch that has carved a niche for itself in the southern region is Hosur Road. The presence of several IT/ITeS companies have attracted developers to launch their projects along the stretch. For instance, Sobha launched Silicon Oasis, which boasts of 4 acres of uninterrupted green space with units decked with home automation, luxury fixtures and latest amenities.
The growth story of South Bangalore is incomplete without Mysore Road. Proximity to various educational institutions coupled with industrial developments, and excellent connectivity from ORR and NICE Road have worked well in the favour of this stretch.
While there are several areas that fall along this road, Banashankari is quite popular being one of the oldest in the city. A residential project that is doing the rounds here is Sobha Heritage. A Juliet window to gaze from, gorgeous gazebos, a cascading pool, lobbies done in the baroque, rococo and neo-classical styles can truly be considered as the pinnacle of luxury living.
Sobha Clovelly is another project in the vicinity (Uttarahalli) that is making headlines for boutique living concept in the city. Decked with plush amenities, the project promises amazing views and complete privacy to its residents.
Spread across a sprawling 15 acres, Prestige Kew Gardens is strategically located just off Old Airport Road in Yemlur. The name of the project refers to the royal botanical gardens in North East England. With ample open space coupled with classical architectural details, the project stands true to its name.
This project has got impressive attributes with its terracotta style facade and variety of roof structures along with 16 low-rise buildings comprising of 979 homes. Being close to the Hindustan Aeronautics Limited (HAL) area, the towers are just G+4.
As one enters, it can clearly be gauged that the project is being built on the idea to optimise land use and provide a community that is visually appealing. Once completed, one will drive through a web of winding gardens, pathways and beautiful a landscape on one side and a community space on the other.
The residential towers are set around the ‘Central Boulevard’, beyond gardens and community space.
Kew Gardens is located close to premier work-spots such as the Central Business District, Prestige Tech Park, Divyasree Technopolis, and Prestige Cessna Business Park and several other IT and ITES companies. The proximity to the Old Airport Road also ensures seamless connectivity to Outer Ring Road (ORR), thereby connecting Bagmane World Technology Center and Manyata Tech Park on one side and Diamond District and Embassy Golf Links (EGL)on the other.
Further, when it comes to connectivity, it allows good access to:
Roads– Outer Ring Road, Old Airport Road, Whitefield Road, MG Road, Marathahalli Bridge
Places– Whitefield, Marathahalli, Business Zones- CBD, Electronic City, Whitefield
Educational Institutes- New Horizon, Gitanjali Olympiad School, Ryan International School, the Bangalore International College
You also get good connectivity to the airport along with several multiplexes, supermarkets and world class healthcare facilities at Manipal Hospital, Sakra Super Specialty Hospital,VIMS Super Specialty Hospital etc.
• Strategically located at HAL-Marathahalli area, Yemalur off the Old Airport Road
• Offers 60 per cent open spaces
• Vastu compliant design
At the entrance, there is community space, which houses health club, gym, swimming pool, banquet hall, badminton court, squash court, yoga/ meditation terrace, billiards, table tennis and other indoor games, reading room, kids play area, a mini theatre. There is also a provision for a convenience store.
• Parking is provided on grade and in one underground basement.
• On the sustainable front, rainwater-harvesting systems have been proposed.
• Latest technology advancements such as solar powered lights, energy saving light fittings, sensor controlled lighting, etc. will be used for the common areas.
• The developer is offering competitive pricing as compared to other projects in the neighborhood.
• However, once the Real Estate (Regulation and Development) Act, 2016 (RERA) is completely effective in the state, the price of the project will be pegged at Rs 6,800 per sq.ft.
• First phase is completely sold out. In the second phase, about 70 per cent units are left.
• The pace of construction looks decent. In all the probability, the developer is most likely to stick to the deadline of 2019.
• Poor road maintenance near the property.
• Traffic congestion during office hours due to Divyasree Technopolis.
• As of now, there is no Cauvery water available. Interestingly, while entering the project, I saw huge water tankers entering Rohan Jharoka, the project right beside Kew Gardens.
• Proximity to the Bellandur Lake, which has often hit the headlines for all the wrong reasons, might be a cause of worry for some.
Location, connectivity advantages, great amenities, well designed apartments and relatively competitive prices works well in favour of Kew Gardens. However, traffic issues and other civic problems cannot be ignored.
All said and done, it all depends on personal requirements. In terms of construction quality, the project definitely scores high. In terms of price appreciation, since the soft launch, the values have recorded a rise of nearly 16 per cent (Soft launch price was Rs 5,600 per sq.ft., currently the price is Rs 6,500 per sq.ft.) Thus, investing in smaller configurations like 1 or 2BHKs are expected to fetch decent returns on investment in the times to come.
The rapid growth and development of the Outer Ring Road in Bangalore, popularly known as ORR, is a classic example of the confluence of developed road infrastructure with the inception of IT/ITeS companies. One of the major roads in the city, it acts as a major link connecting the South Bangalore to the north, swerving through the prominent tech hubs of the eastern region.
Realising the immense potential that the stretch holds, several realty giants have launched their projects along the ORR over the last decade. One such project that has caught the fancies of denizens is Adarsh Palm Retreat. It redefines the premium lifestyle within an integrated community. As one of the prominent names in the luxury segment, the condos are designed with a fine eye to detail that perfectly resonates across the project.
Launched in 2005 with the original deadline being 2007, the project has pushed its deadline way too much. However, things are now moving up and the last phase of the project is likely to be completed in the next five months.
Being a phased development, Palm Retreat is built in three phases. The first two phases are complete while the construction work in the third phase is going at a full swing with maximum work completed. Nearly 25 per cent residents have already moved-in.
I recently visited the project. Here’s an overview of what awaits prospective buyers.
Location & Accessibility
• Adarsh Palm Retreat is located in Bellandur off the Sarjapur Outer Ring Road. Being strategically located, it enjoys seam less accessibility to the important IT hubs of the city.
• Further, IT Parks including EcoSpace and Ecoworld are at walkable distance. The former tech park is home to companies like Accenture, Bosch, Harman, Cadence, Shell, etc while the latter houses Aura, Capgemini, Honeywell, KPMG, Sony, Infosys, etc.
• Intel and Wipro offices are also easily accessible. Passport Seva Kendra is just across the road.
• Another important tech park, Cessna Business Park, is situated at a distance of mere 2.6km from here. Little further down this road are offices of Adobe Systems India Pvt Ltd, JP Morgan Chase, and Oracle India.
The project is well-connected to the Sarjapur Main Road, and thus enjoys accessibility to few of the renowned schools in the city. These include New Horizon Gurukul, Greenwood High International School, The International School Bangalore, National Public School, to name a few.
To cater to the healthcare needs of the residents, leading hospitals in the city including Sakra World Hospital, Apollo Clinic, Motherhood Hospital are also within a radius of 4km.
• As you come out of the project premise, one is greeted by RMZ The Bay, an entertainment zone with avenues for shopping, dining, sports and relaxation.
• Bangalore’s famous Big Brewsky, a contemporary-design microbrewery with open air poolside seating is also nearby.
• For movies, Bangalore Central Mall (Bellandur) and Soul Space Spirit is quite nearby.
There was a Shanri-La hotel that was being constructed by the developer, however, it was bought by the RMZ last year to convert it into an office space.
From a conveyance perspective, the project is located at a distance of about 19km from both the International Airport and the Railway Station. MG Road, the city centre, is about 16.8km fromhere. As of now, the nearest metro station is Baiyappanahalli Metro Station, which is at nearly 15km away. However, under the metro phase III, this distance is expected to reduce with a station proposed at Sarjapur.
A Closer Look at the Project
The project welcomes one with its grand entrance. Though it is about 1.4km inside from the main road, the leading road is maintained well by the RMZ group. Since this road has entrance to the companies, there are security guards who ensures smooth traffic movement.
The project offers 2, 3 and 4BHK condominiums at varied sizes and price points.
• These include clubhouse spanning over 65,000 sq. ft. with amenities like swimming pools, gymnasium, tennis courts, badminton courts, squash courts, party halls, among others.
• A point worth mentioning here is that each phase in the project has its own amenities. Thus, one can be sure of the usability of the amenities.
• The badminton court is ready and operational.
• There are two party halls that are currently under-construction. Interestingly, a huge space is left for a restaurant to come up within the premises that will cater to the needs of the residents.
What’s Up for Grabs?
Spread over 28 acres, there are nearly 1,400 units in phase 3. The project is divided into eight blocks that are named after flowers. These include Jacaranda, Hibiscus, Bougainville, Lotus, Mayflower, Jasmine, Maple and Daffodil.
All the blocks are G+10, with the 11th floor being the penthouses. Each floor has four units with no common wall in between. All the blocks boast of large open areas with a beautiful landscape.
• Daffodil was the first block to be completed, thus, currently has nearly 95 per cent occupancy. It is also the only which has 2BHK configuration.
• Lotus Block is the super-premium and has an exclusive entrance. Centrally located, it comprises only of 4BHKs with balconies of all the four units faces the garden. This block also enjoys great accessibility to the amenities.
• 3 & 4 BHKs in Jacaranda, Hibiscus, and Mayflower also boast of premium features similar to those in Lotus. For instance, all the bedrooms come with wooden flooring and all the bathrooms have glass shower cubicles. In addition to the separate family area and large dining and living area, these units also come with a powder room. The master bedroom also boast of a large dressing area.
• Jasmine and Maple offers 3 and 4BHK units. However, the internal specifications are less when compared to the other blocks. For instance, the tiles used in the units here are small, which reduced the cost by at least 5-10 per cent. Only the master bedroom and bathroom has the wooden flooring and glass shower cubicle respectively. Thus, these units come at a relatively lower cost.
• The units on the higher floors in Mayflower or Hibiscus (especially the side that faces the villas) can assure one a well-ventilated and lighted home with cool breeze.
When it comes to unit sizes, there are lot of variations to choose from at Adarsh Palm Retreat. The table below explains few of these.
Few Other Details
• There is a provision for Cauvery water. For water tankers, there is a dedicated area where tankers can come and offload the water.
• From children perspective, one can be sure of safety as there will be no vehicular movement at the ground floor. This is primarily because one enters the basement directly and then comes up to the project.
• For parking, all 4 BHKs come with two back-to-back parking. However, side-by-side parking can be bought by paying an extra amount.
• All 3 BHK units come with a servant’s quarters.
• Occupancy Certificate is already obtained.
After interacting with one of the brokers, I understood that majority of the buyers are IT/ITeS professionals at senior levels or honchos of top multinational companies.
Majority of the units are available in the resale market. Thus, one can expect few units with complete woodwork done.
Due to a long delay in the project, I also learnt that few flat owners changed their plans of moving into the society and instead are opting to exit. Also, few owners are looking to further upgrade themselves and buy in the phase 3 villas. Thus, there is definitely good scope for negotiation.
On the Flipside
Traffic snarls during peak hours is definitely a challenge. If one has to come out of the project premise, it would take some time due to the presence of several offices in the vicinity. Since Adarsh Palm Retreat is about 1.3 km inside from the main road, getting public transport like an auto would also be a challenge.
NRI: A person is labeled a Non-Resident Indian (NRI) if he/she is an Indian citizen but stays abroad for employment purpose or under circumstances indicating an intention for an uncertain duration.
PIO: PIO or Person of Indian Origin is one who held an Indian Passport at any time or whose father or grandfather was a citizen of India as per the Constitution of India or the Citizenship Act, 1955.
OCI: OCI or Overseas Citizen of India is:
● One who was an Indian citizen at the time of, or at any time after, the commencement of Constitution.
● One who was eligible to become a citizen of India at the time of the commencement of the Constitution.
● One who belongs to a territory that became part of India after 15th August 1947.
Why investing in India is good for NRI/PIO/OCI?
Indian real estate market has been a lucrative investment option for NRIs since time immemorial. Many times, it has topped the list of expatriate remittances to their home nations. For instance, in 2010 the remittance was about US$55.6 billion which increased to US$69 billion in 2015. And a substantial portion of expatriate remittance ends up in real estate investments.
So, why investing in India good?
● The government considers investment by NRIs/OCI/PIO at par with that of residents.
●There is no differential pricing for projects sold to Indians or to NRIs. Also, few developers are launching NRI-centric projects.
● With increasing demand for office space by MNCs and start-ups, this is another higher return avenue available for investment.
● The depreciating rupee has provided a golden opportunity to investors abroad. Also, several new policies and reforms have brought Indian economy on track. Thus, overseas investors can expect good returns on investment.
● Consistent rental income.
●Lastly, emotional quotient has prompted many overseas Indians or ones with their roots in the country, to invest here in the hope of returning to the country or in favor of their relatives.
Rules & Regulations
As per the Reserve Bank of India (RBI), an NRI/PIO/OCI can freely purchase immovable property including residential and commercial assets. But he cannot purchase agricultural land/ plantation property/ farm house in India.
Mode of Payment for Property Purchase
Payments can be made through the following:
● Amount remitted to India through normal banking channels, or
●Funds held in NRE / FCNR (B) / NRO account maintained in India – these are three kinds of accounts that an NRI can hold with banks in India.
NRE or Non-Resident External Rupee account can be opened by the NRI himself and not through the holder of POA. It can be in the form of Savings, current or recurring or FD account with a maturity of minimum one year.
FCNR or Foreign Currency Non-Resident (Bank) account provides nomination facility in which the nominee can be a resident of India.
NRO or Non-Resident Ordinary Rupee account can be opened by anybody who is resident outside India for carrying out transactions in rupees. It can be opened in the form of current, savings or recurring or FD account.
(Note: Payments via traveler’s cheque or by foreign currency notes or by other mode is not permitted in property purchase.)
Is there a limit to a number of properties an NRI can buy?
No, there are no restrictions on the number of residential/commercial properties purchased by an NRI and they are also not required to report details of property transactions to the RBI.
Should there be a Power of Attorney (POA)?
It is recommended that an NRI give the POA to his relative/friend since it makes documentation work easier. When NRIs buy under-construction properties, developers ask for a POA from them to execute all paperwork including contracts, deeds, mortgage or lease when the NRI isn’t in the country. Also, POA comes handy in case of selling the property. But, tread with caution! It is always advisable to get the documents run by a professional lawyer.
IMPORTANT DOCUMENTS NEEDED BY NRI/PIO/OCI FOR PROPERTY BUYING
1) Indian passport
2) PIO Card
● If you hold the passport of any foreign country.
● If you are a foreign citizen whose father or grandfather was a citizen of India.
3) OCI Card
● It is required if you are not a citizen of India, but eligible to become an Indian citizen before or after partition.
(Note: You can apply for these cards in the Indian embassy or consulate in the country of your residence by producing your parents’ birth certificate as proof that you are an OCI or PIO.)
4) PAN Card
● Permanent Account Number (PAN) is mandatory to file income tax returns in India in case the property is rented out or sold.
5) Power of Attorney (POA)
● The person given the POA can get the registration, execution of the sale, possession and other processes done on your behalf.
● Address proof and passport size photographs.
FUNDING PROPERTY PURCHASE
Are NRIs/PIOs/OCIs eligible for home loans from Indian Banks?
Any lending institution approved by the National Housing Bank (NHB) can give home loans for buying residential property here. Few Non-Banking Financial Companies (NBFCs) also offer home loans to non-residents, provided:
● Loan amount and time for repayment is at par with those applicable for people residing in India.
● Loan amount shall not be credited to Non-Resident External (NRE) or to Foreign Currency Non-resident (FCNR) or to Non-resident non-repatriable (NRNR) account of the borrower.
● The interest rate on home loans is same as for regular residents.
●Borrowers can pay installments, interest and other charges by remittances from outside India through normal banking channels or out of funds in his NRE/FCNR/NRNR/ NRO/non-resident special rupee (NRSR) account in India.
●Post-dated cheques can be issued or Electronic Clearance Service (ECS) from NRE, NRO or FCNR account.
● If any rented property was acquired using the home loan route, then the rent amount can also be used to repay the loan. Cheques issued from any relative’s local account can be used to make payments.
(Note: ‘Relative’ as defined in section 6 of the Companies Act, 1956. A person shall be deemed to be a relative of another if (a) they are members of a Hindu undivided family, (b) they are husband and wife; or (c) the one is related to the other in the manner indicated in Schedule IA (Father, mother, son, son’s wife, Daughter, Daughter’s husband, etc.)
What is the Eligibility criteria for Availing Home Loan?
Criteria pertaining to minimum age and years of work experience abroad should be met but these things vary from bank to bank.
● Salary Criteria: Few banks like ICICI and Axis Bank also have minimum salary per month criteria. Those working in any of the Gulf Cooperation Council (GCC) countries, minimum monthly income must be 5,000AED (United Arab Emirates Dirham) while those in the US and other countries, $3,000 per month is the minimum salary.
● If you are self-employed, then you should have stayed abroad for minimum 3 years.
● Professional and educational qualifications also play a major role. Those applying for loans should be at least graduates.
One should check with their bank or lending agency on compliance with the above norm.
How much funds can NRIs get?
As per the RBI norms, a maximum of 80 percent of the total value of the property can be funded by a bank. Rest 20 percent should come from non-residents personal resources.
What is the tenure of the loan?
It varies from bank to bank. For instance, HDFC and SBI offer up to 20-30 years while in others it can be restricted to 10-15 years.
POINTS TO REMEMBER!
Inherited or jointly held property
● Check title papers carefully.
● Do a bank release if at any point in time the property was under a mortgage.
● In order to make sure there are no pending dues (water, electricity, or any other), take a no dues certificate from the seller at the time of buying.
● Take NOC from the builder.
● Check the Land title.
● Once RERA Act is in force in the region where you plan to purchase property, follow all disclosures made by the builder.
Is there any other option for funding?
Well, if you are still settled abroad and have income accruing there, you can try to get funding overseas itself.
What are the essential documents required for a home loan?
✓ Passport and Visa
✓ PIO/OCI Card
✓ Appointment letter’s copy and contract from the company employing the applicant
✓ The labor card/identity card (translated in English and countersigned by the consulate)
✓ If the person is employed in the Middle East Salary certificate (in English)
specifying name, date of joining, designation and salary details
✓ Bank Statements for the last six months
List of Classified documents for Salaried and Self Employed Non-Resident Applicants
What if PIO card is not available?
In such cases, photocopies of any of the following documents can be used.
✓ The current passport, with birthplace as ‘INDIA’
✓ The Indian passport, if held by the individual earlier
✓ Parents/grandparents Indian passport/birth certificate/marriage certificate substantiating the individuals claim as a person of Indian origin
REGULATIONS ON SALE OF PROPERTY BY Non Residents
As per FEMA, a non-resident has the rights to sell residential and commercial property bought or even inherited. In case of selling an inherited agricultural or plantation land or farmhouse, an NRI has to look for a resident Indian to buy it. Such properties can also be gifted to other NRI or to a PIO.
RBI guidelines on Repatriation of Sale Proceeds
● As per rules, one can repatriate only up to the amount invested in property.
● In case the property was bought using foreign exchange sources, then the repatriation cannot exceed the foreign exchange amount paid for the purchase of property through banking channels.
● If a property was acquired using rupee, one can remit an amount up to USD one million, per financial year. The NRI/PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE/FCNR (B) account.
● Repatriation of sale proceeds is restricted to maximum two properties.
● Capital gains, if any, may be credited to the NRO account from where the NRI’s/PIO’s may repatriate an account up to USD one million, per financial year (April to March).
Is rental income from property repatriable?
Yes, rental income is repatriable but is subject to an appropriate tax deduction and a certificate from a Chartered Accountant in practice.
UNDERSTANDING THE TAX IMPLICATIONS
Is rent received from property in India taxable?
Yes, the rent received is taxable and the owners must file tax returns in India. Further, the rent can be additionally taxed in the non-residents country of residence. However, under the Double Tax Avoidance Agreement (DTAA), one can avail tax relief in certain countries.
What deductions can one get?
● Like in India, municipal taxes and interest paid of home are deductible. Further, a standard deduction of 30 percent of net rent (gross rent less municipal taxes) can be availed for repair and maintenance, irrespective of actual expenditure.
● Form 15CA is enough in case the remittance limit does not exceed Rs 50,000 per month. However, in certain cases where the amount exceeds this limit, a certificate from a CA in Form 15CB in mandatory before uploading Form 15CA online. (Note: Form 15CB entail details pertaining to the payment, TDS rate, and deduction as per Section 195 of the Income Tax Act. It also has details of DTAA, i.e. Double Tax Avoidance Agreement, if applicable.)
●Under Section 80C, principal on home loans, stamp duty and registration charges are allowed as deductions with a maximum limit of Rs 1.5 lakh per year.
What if the property is vacant?
A vacant property, i.e. not rented out, is considered as a self-occupied property for which the taxable value is nil. For the same, one can avail deduction on interest paid on home loan which is up to Rs 1.5 lakh per year. Deduction for principal repayment can also be obtained.
What is the wealth tax applicable for NRI/PIO/OCI?
If a property is rented for more than 300 days, a non-resident is exempted from wealth tax. Further, a vacant house declared as self-occupied is also exempted. However, wealth tax is applicable on second or subsequent properties at the rate of 1 percent on the value more than Rs 30 lakh.
During selling, what are the tax payments?
Like Indian residents, non-residents are also subject to capital gains tax in India. For a property held over 2 years, they can get long-term capital gains. For the same, non-residents can claim exemptions under Section 54, Section 54EC and Section 54F. Long-term capital gains are taxed at 20 percent and are also subjected to a TDS of 20 percent.
Again, in this case, also, capital gains may be taxable in non-residents country of residence. However, under DTAA, relief may be available in the form of credit for Indian taxes paid.
Capital gains can also be invested in specific bonds for up to Rs 50 lakh issued by National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC) within six months of sale.
An NRI/OCI/PIO should be well-versed with the income tax implication of their country of residence. There are countries that provide partial or complete exemption on capital gains if all the requisite conditions are met, while few other countries tax the residents no matter where are originally from.
RENTAL MANAGEMENT FOR NON RESIDENTS IN INDIA
For those considering to rent their properties, consider these.
Know the Agreements Required
Make sure to get a rental agreement signed by your tenant to avoid any unwanted hassles once the agreement expires. There are two types of rental agreements- Rental Lease Agreement and the Leave and License Agreement. Former is used for transfer of ownership from the owner to the lessee for a certain period, while the latter does not give ownership to the lessee.
How can Non Residents get the Rental Income?
Tenants can credit the rent amount to the NRE or NRO account of the non-resident. In case one doesn’t have these accounts, the rent can also be sent to an account abroad, provided you have the requisite certification from a chartered accountant, stating that all your taxes have been paid properly.
Tax on Rental Income
The owner is liable to pay taxes on the rental income. The tax amount is deducted at source (TDS), i.e. your tenant. Thus, your tenant must obtain a TAN number and deduct a TDS of 30 percent from the total rent amount. Post this, the TDS certificate must be given to the owner/landlord.
(Note: If the tenant fails to pay the tax amount, he will be held responsible by the tax authorities. Also, you will not be able to declare any incomes from your taxable incomes. However, if you have already paid and filed for tax returns this may not be an issue.)
What is Deemed Rental Income?
As per the Indian Income Tax Act, be it, Indian resident or non-resident, if you have more than one property on rent, then only one will be considered taxable and the other one will be considered as self-occupied. And if the latter property is not on rent, you will have to pay the income tax on the deemed rental income on the second house. (Note: Non-residents owning only one property in the world which happens to be in India, then you need not have to pay an income tax on the deemed rental income in India.)
What if the property is inherited?
In case of inherited property in India, you will be liable to pay the tax on deemed income if it is not your only property.
POINTS TO REMEMBER!
● It is advised that you make sure you know which agreement you are opting for.
● Know about the best way to get your rent credited to your account on time.
● Know the tax implications well in advance.
The Real Estate Regulatory Act, 2016 (RERA) is a landmark development in the history of the sector in recent times. The Act is not only expected to bring in more transparency and accountability in the sector but will also provide mechanisms to simplify and regulate the buying and selling of all types of properties.
Below are ten major features of the Act.
• Without signing a sale agreement, developers cannot accept the advance sum of more than 10 percent of the total cost of property from the buyer.
• A developer will have to maintain a project Escrow Account where 70% of the money can only be withdrawn for purpose of project land and construction costs.
• Wrong representation of services/amenities are completely prohibited. All ads and brochures must be uploaded to the authority’s website where all the details pertaining to the projects has been entered.
• Any structural defect in the property within five years from the date of handing possession must be rectified by the developer within a month’s time without any cost.
• Specifying the time period for project completion during registration is expected to bring in a huge relief for the home buyers.
• During registration, the developer must reveal the name and address of all the real estate brokers/agents associated with the project.
• Brokers/agents involved in facilitating sale or purchase of any project will also have to be mandatory obtain registration from the concerned authority. In absence of this, brokers shall not do any such activity around the project.
• If a developer fails to adhere to any of the norms mentioned in the Act, the authority can cancel the registration of a project on receiving a complaint or suo motu.
• The authority will grant/reject registration within 30 days of receiving the application of the concerned project. It must give a registration number and login ID/password for accessing the website. Post this, developers will create the webpage and fill in the requisite details pertaining to the project.
• For the projects that are being developed in phases, the developer will have to register each phase separately. As per the new Act, each phase is considered as a stand-alone real estate project.
• A developer cannot transfer the rights and liabilities of the real estate project to a third party without getting the written consent from at least two-thirds buyers (allottees), and the written approval by the concerned authority.
Several other customer-friendly measures are part of this Act. But real estate being a state subject every state in India will be adopting a Real Estate Act applicable to projects in that state.
Project delays have plagued the real estate sector for quite some time now. The industry body, Assocham, recently came out with a report that revealed some shocking numbers about the mounting unsold inventory in the sector. As many as 826 residential projects across the country are facing delays of up to four years. The report listed out the states name with their unsold stock numbers, which brought one remarkable point to the table. Out of several states tracked, Karnataka witnessed the lowest delay of 31 months. Time and again, various reports have stated that Bangalore has the lowest unsold inventory in the country. So, where have other states or cities gone wrong? Or what has Bangalore done right? To know more about trends in real estate Bangalore, let’s take you further with the article:
The city’s residential market continued to rally forward in the last two years despite the Indian economy’s struggle to stay afloat. Property prices remained more or less stable largely due to the competitive pricing coupled with the fact that Bangalore real estate market is driven by the end-users. Let’s delve deeper.
Real Estate Bangalore: End-users Driving Realty Market
The Silicon Valley of India has essentially been an end-user driven market because of which developers have always maintained the price levels. When compared to other metros, the city has never been plagued by speculative pricing. For instance, post the announcement of the Navi Mumbai airport, several micro-markets there recorded whopping price rise to the tune of 50-80 percent over a year, which is totally unrealistic. However, in Bangalore realty prices have always been under-check.
Being a stable market, the city has fortunately neither seen violent fluctuations nor a crash that could have possibly resulted in low consumer sentiments.
Real Estate Bangalore: Ethical & Professional Practices Make the Market Attractive!
In the last few months, the Indian real estate sector has been in the news for all the wrong reasons. The slowdown in the sector coupled with a few leading realty stalwarts going behind the bars has left a negative mark on the sector at large, especially in cities like Delhi NCR and Chennai. Bangalore, on the contrary, has not seen any such incidents in the recent times. This is because developers have been more professional and ethical here, which is also reflected in the quality of construction.
Real Estate Bangalore: Majority Buyers Opt for Home Loans
Unlike cities like NCR, Hyderabad, and Chennai, Bangalore has been primarily dominated by the serviced-class population (IT/ITeS). And most buyers in the city opt for home loans unlike business-class, thus even the banks do the due-diligence of the property. Interestingly, there is a notion in the city that if a project is approved by the SBI, then it is free from all the litigation. Thus, most of the developers make it a point to get their projects approved the country’s largest lender.
And with majority buyers opting for a home loan, the cash-component has been low since the city’s market took off. Thus, when the surgical strike against black money stirred nation’s soul, Bangalore market stood resilient.
Real Estate Bangalore: Majority Projects Built Under JDs
Another important factor is that majority of the projects here are built under a joint development agreement between a landowner and the developer. In contrast, developers in Delhi NCR first buy the land and later construct on it, which turns out to be an expensive affair for them. And eventually, the brunt of this is passed on to the buyers in the form of soaring prices.
Real Estate Bangalore: The ‘Tech’ Factor
From a pensioner’s paradise to a bustling IT city, the metamorphosis of Bangalore has been nothing short of remarkable. Thanks to the tremendous growth of the IT/ITeS sector. The technology sector has contributed a lot to the growth of the city by attracting huge investments, both from within the country and overseas.
With each passing year, the number of companies opting to set a branch in Bangalore or even setting up headquarters is just rising. This has resulted in the city witnessing remarkable migration in the last few years. These techies are the major takers for the mid-segment housing in the city. And not just the primary market, even the rental market has always been upbeat due to the presence of several companies.
Not just IT/ITeS, the city has gracefully embraced the start-up culture and is now home to a large number of start-ups that promise good growth opportunities for young entrepreneurs and professionals.
As they say, every coin has two sides, Bangalore too has its own share of problems. Be it the BBMP’s demolition drive last year or traffic situation or the diminishing lakes, the city has a lot to work upon!
Nonetheless, Bangalore offers great investment opportunities for those eyeing less volatile market. With steady economic growth, IT/ITES expansion, and start-ups gaining ground, the city remains an attractive real estate investment market.
Looking to invest in a ready-to-move-in property in and around Sarjapur-Outer Ring Road? Well, then Salarpuria Senorita is a project that can be considered.
Located along Sarjapur Road, Senorita by Salarpuria Sattva Group is a premium residential project in the eastern part of Bangalore. Strategically located, the project offers 2, 3 BHK apartments and 4 BHK Duplex. Spreading over 4 acres, it offers more than 70 per cent of outdoor space in addition to beautiful landscaped gardens.
One is welcomed by the magnificent lobby inside that is well-architected with tall bamboo plants that adorned every corner. Each unit is well-designed with maximum space optimisation and spacious rooms.
Construction is now complete and project is at handover stage. Property registration is done for most of the flats with several buyers getting their interior work done. At present, more than 80 per cent residents have already begun residing there.
What’s Available? Most of the 2 and 3BHKs are available only in the resale market, while the builder has a few penthouses left in the primary sale.
• G+18 structure
• 2, 3 apartments and 4 BHK Duplex
• Sizes between 1,287 and 3,516 sq. ft.
• 2BHK Rs 85 Lakh onwards, 3BHK Rs 1.18 Cr onwards, Penthouses Rs 2.8 Cr onwards.
The project has been developed keeping in mind overall proximity to the IT/ITeS hubs in the city. Located on the main Sarjapur Road, the project is well-connected to ITPL, Electronic City, and the Outer Ring Road (ORR). It is right opposite Wipro and also enjoys great proximity to HSR Layout and Koramangala – the two major entertainment hubs in the vicinity.
Now, let’s move to the other side of the project. If one takes the route down towards Sarjapur Village, then approximately 3km away is the upcoming RGA Tech Park, which has about 2.1 mn. sq. ft. of grade A office space. Considering the apt location, Uber has leased about 2 lakh sq.ft. office space here. Another upcoming office space in the proximity is Prestige’s Ferns Galaxy where Microsoft was eyeing to lease about 0.6 million sq.ft. office space.
While the project is well-connected to the IT/ITeS companies on both the sides, to address the health concerns there is a Columbia Asia Hospital (within 2.5km radius from the project) that is under-construction. Thus, from an investment perspective, due to its strategic location, the project is likely to garner decent returns.
So, should one buy a property here?
Overall, Salarpuria Senorita gives one a strategic location, requisite amenities along with recreational features, decent brand value and luxurious apartments coupled with ample space and greenery. Thus, if the pocket allows, definitely it’s a Yes!
Needless to mention, the project boasts of all state-of-art amenities. However, one should keep in mind that we are talking about 423 families moving in, so the usability of amenities is definitely that one should think of! However, this is entirely a personal choice.
Talking about the price factor, in comparison to other projects in the vicinity, there is no doubt that Senorita will burn a larger hole in the pocket.
On the Flipside
For those looking to buy a 3BHK with a servant quarter, this project is not the best! Though usually a norm in luxury 3BHKs in the city, Senorita lacks on this front. Also, there is just one balcony in 3BHK configurations.
I also happen to see a penthouse that really disappointed me. The balconies were too narrow and the finishing (especially of doors) was not up to the mark considering the price.
Traffic snarls during peak hours would also add to the woes as Wipro office is diagonally opposite to the property.
After talking to few of the residents, this is what can be concluded about this project-
• Strategic location
• Timely completion and brand value
• Skillful design
• Hassle-free property buying experience
• Open spaces and great connectivity to key areas in the city
• Poor road maintenance
• Huge traffic congestion during peak hours
• Noisy in towers facing the main road.
A word of Advice!
Road maintenance and traffic congestion may be minor drawbacks considering all the amenities that are up for grab. However, people eyeing peaceful environment should stay away from the towers facing the main road.
The details displayed on the website are for informational purposes only. Information regarding real estate projects including property/project details, floor area, location data has been sourced from multiple sources on best effort. Nothing contained herein shall be deemed to constitute legal advice, solicitations, marketing, offer for sale, invitation to acquire by the developer/builder or any other entity. You are hereby advised to visit the relevant RERA website before taking any decision based on the contents displayed on the website.
My wife and I were new to Bangalore and were looking for suggestions while planning to buy a home. A little Google search led us to this little known site called PropStory. They provide comprehensive reviews of under-construction projects which are based on actual site visits. The details are better than those we see in newspaper ads or even FB ads of these projects. After a little research on this site we narrowed down our search to a leading developer’s project in HSR Layout
Arjun Yadav, Bangalore
There are many websites one can refer to when deciding on real estate purchase. Of these I have only come across PropStory which provides the information in a narrative style. There are details about layout, specifications, local neighbourhood, connectivity and even developer background. I also like that they write about other matters like infrastructure, issues in real estate and hot topics like GST and RERA. Kudos to PropStory.
Revati Kunder, Mumbai
I recently visited a leading developer’s construction site and was disappointed by the lack of sufficient information the sales people gave me. My husband and I almost gave up on the project. But we like some of the specifications and decided to look for more online. That when we found PropStory and they had covered this project! We so pleased to find more info and were able to make our housebuying decision. Thanks PropStory.
Divya Matthews, Pune
When I was suggested to check out PropStory, I was not sure I would be interested. I don’t like reading and real estate is boring subject. But this site gives enough details through images also so that it is easy for those who don’t like reading. My opinion of real estate changed and I look forward to knowing more about upcoming residential projects in other cities too
Dhruv Pathak, Gurgaon
PropStory I like your writing style. It is simple and understandable. You do not support any developer or project but have a general opinion about the projects. I also like your new site design where I can quickly scan through features of a project and what is available or not.
Devesh Kapur, Noida
PropStory articles are good. I suggested to my brother in law to read these articles before deciding on a property. He was impressed with the details and knowledge of writer. Some construction technology used is also explained which helps us common man to understand. Other websites are not doing so. Well done PropStory!
Amit Patil, Thane
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