3 NEWS

The Times of India,

REALTY

6 SPEAK
Mumbai June 16, 2007
use this amount in a better way," says Mr. Gopal Sharma, General Manager, Marketing, Gundecha Builders. Earlier, from June 16, 2005 all co-operative societies whose collections exceeded Rs 4 lakh were levied 10.2 % service tax. So even complexes hosting higher and lower middle-income groups were included under this bracket and residents had to bear the burden of taxes. Mr. Ramesh Prabhu, Chairman of Maharashtra Societies Welfare Association says, "The decision made by the Central government is really commendable. Excluding service taxes on monthly maintenance will prove to be beneficial for most societies. A.L. Wadhwani, Secretary of Pearl Towers in Mulund, is quite happy with the new law. He says: "Nowadays we see tax being levied on a variety of services. In such times excluding maintenance charges from the taxable services is a welcome relief for us. For middle income societies like ours this will help us in managing the budget well and save more."

EXPERT

CITY SCAN
NAVI MUMBAI

he Central government has notified the levying of service tax on only those societies where maintenance charges paid by members exceed Rs 3,000 per month and the overall gross collection of the society is more than Rs. 8 lakh per annum. This has ensured that middle and lower income group societies will be exempted from these taxes, and is definitely advantageous to most societies. However societies with annual collections exceeding Rs 8 lakh will have to cough up service tax at 12.36 %. Both the clauses of a member paying Rs 3,000 per month as maintenance charges and the society's collection exceeding Rs 8 lakh per annum must be fulfilled for a society to fall in the bracket of service tax. The society is not liable to file service tax returns if it collects more than Rs 8 lakh per annum, but individual members' contribution is less than Rs 3000 per month. The new law is in effect from April 1, 2007. "Laws are made for the welfare of the people and one must not doubt its inten-

been exempted. Mukesh Patel of Neelkanth Group says, "Levying service tax on the money that the societies gather for maintenance is not justified as societies are not profit-making organisations. The very basic idea to form the society is to manage their premises in an effective way by collecting money from members as per the need and not in excess. Being cognizant of this fact, the central government has made this very positive amendment." "It is the members themselves who elect or select their committee. It is a job that is not just honorary but also thankless. If the societies employ the services of some CA or MBA then they should pay the service tax on his professional bill. Why should someone pay any service tax for keeping his own house in order all by himself ? High premium residential projects dotting the landscape of South Mumbai and reclamation areas where all amenities and comforts are given for the convenience of the selected flat purchasers in the city will

B E N C H M A R K
R E S I D E N T I A L P R O P E R T Y R AT E S I N M U M B A I
SOUTH MUMBAI Rs./sq. ft. Cuffe Parade 18,000-45,000 Churchgate 15,000-24,000 Marine Lines 14,000-22,000 Malabar Hill 18,000-45,000 Napeansea Road 18,000-45,000 Worli 12,000-35,000 Prabhadevi 11,000-22,000 Mahim 7,500-11,000 CENTRAL SUBURBS Rs./sq. ft. Byculla 5,000-11,000 Wadala 5,000 -7,500 Sion 6,000-11,000 Kurla 3,000-4,500 Powai 4,500-11,000 Chembur 4,000-7,000 Ghatkopar 4,500-8,000 Bhandup 3,000-4,500 Mulund 3,750-5,000 Thane 3,500-5,000 Dombivali 1,800-3,000 Kalyan 1,100-2,500 Ambernath 900-1,400 NAVI MUMBAI Rs./sq. ft. Vashi 3,000-5,000 Airoli 1,800-3,000 Kopar Khairane 2,500-4,500 Sanpada 3,000-4,500 Nerul 3,000-4,500 CBD Belapur 3,000-4,500 Kharghar 2,000-3,000 Kalamboli 1,400-1,800 Panvel 1,800-3,000 WESTERN SUBURBS Rs./sq. ft. Bandra (E) 6,000-9,500 Bandra(W) 11,000-24,000 Khar(E) 5,000-9,000 Khar(W) 10,000-16,000 Santacruz(E) 5,500-9,000 Santacruz(W) 8,500-14,000 Vile Parle(E) 5,000-9,000 Vile Parle(W) 7,000-16,000 Andheri(E) 4,000-6,500 Andheri(W) 5,000-10,000 Jogeshwari 3,000-6,000 Goregaon(E) 3,000-6,500 Goregaon(W) 3,000-6,000 Malad(E) 3,000-5,000 Malad(W) 3,000-6,000 Kandivli(E) 3,000-5,000 Kandivli(W) 3,000-5,000 Borivli(E) 2,800-4,500 Borivli(W) 3,000-5,000 Mira Road (E) 1,200-2,500 Vasai(E) 1,100-1,700 Vasai(W) 1,100-1,700 Virar(E) 1,000-1,600 Virar(W) 1,000-1,600
Source : 'Narains Corp' Property Consultants & REALTORS * The difference from carpet to built up area is negligible in older buildings. Rates are subject to amenities, upkeep & vary within the same building depending on view, layout etc.

Reap the benefits

Recent amendments in the service tax protocols will prove beneficial to smaller housing societies, say Binita Ramchandani and Rohan Rao
tions. This law is implemented so as to concentrate on a particular section of society," says Mr. S.J. Singh, Commissioner of Service Tax Department. There are more than 23,000 registered housing societies in Mumbai and Thane. Of these over 90 per cent of societies charge less than Rs 3,000 for maintenance purposes. This has ensured that more than 90 per cent of the societies will be excluded and only very high premium residential projects will file returns. "Smaller societies will be definitely benefited from this amendment since their collection will be less than Rs 8 lakh. By saving this service tax they will be able to Meanwhile, not many are supporting the idea of including housing societies under taxable services. The argument stems from the fact that a cooperative society is a group of people who are providing services to themselves, and not to any secondary party . In the past, the service tax department opined that payments like water tax and property tax should be excluded from service taxes, but now, however, transfer fees, donations, property tax, sinking fund, water charges and all of which will be accounted for computing the tax are included under the service tax bracket. Charges under telephone bills, repair and maintenance contracts, lift maintenance and security have be included in the 'taxable' bracket. It focuses primarily on high net-worth individuals. It is unlikely that property buyers willing and able to buy into a housing society that collects maintenance charges of Rs. 8 lakh or above annually would consider this a serious issue. It will certainly not become a new criterion for choosing where to buy a home, and it will not affect middle-income property buyers, feel experts. On the whole this move will definitely boost middle and lower income housing projects. However, the very basic question about why housing societies are being levied service tax remains unanswered.

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Tel.: Tel.: 022-32942757/58, Mobile: 093239 L

Secure your assets

Under new guidelines from the National Disaster Management Authority, banks may only provide loans for earthquake-resistant buildings, says Prasad Sathyen

he next time you go hunting for a home loan, the lender may check if your building is earthquake-resistant. This is one of the latest guidelines issued by National Disaster Management Authority (NDMA). The idea is to strengthen collateral security and also caution the borrower against purchasing substandard properties. NDMA was formed under the Disaster Management Act 2005 and is headed by Prime Minister, Dr. Manmohan Singh. N. Vinod Chandra Menon, Member NDMA says, "The guidelines say that banks will consider the compliance of seismic safety before offering housing loans and loans for construction of multistoreyed complexes". NDMA has sent copies of the guidelines to the Ministry of Finance (MoF), which will forward it to the Reseve Bank of India (RBI) for issuance. As per the these guidelines all building structures - residential and commercial, including shopping malls, multiplexes, bridges, hospitals and other critical lifeline structures whose completion is after June 30, 2007 will have to mandatorily adhere to earthquake resistant design. G. Raghuraj, Deputy General Manager, RBI, says, "We have not yet received any official communication from MoF. Of course, once it is received, RBI's department of banking operations and development will take a view on the issue and issue circulars to all the banks. HSBC Head, Personal Financial Services, India, Mr. Nicholas G. Winsor said, "It's a welcome move, as the banks will lend only to earthquake resistant homes. The banks can set out responsibility on the construction industry to comply with the earthquake resistant codes and

follow construction practices that achieve earthquake resistant homes. This will strengthen the collateral security of the bank against which the bank gives loans. The new policy will ensure that homes attain a high standard of earthquake protection; even banks will feel secured to provide housing loans, as it gives strength to their collateral security thereby, reducing their risk profile." Kapil Wadhwan, Managing Director, Dewan

Housing Finance Corporation Ltd acclaiming the move and said it should have been enforced long ago. Wadhwan says his company follows stringent norms and has experts to guide on the issues of safety . This is apart from the certification from the developers of the property that it satisfied safety standards. Since most home loans are given to people in smaller towns and in cities where self- construction is the practice, I think this step of ensuring safe development will go a long way in safeguarding the assets

rate can be negotiated with the banks for the particular project. Banks would gladly oblige as higher safety also reduces their risk levels. Insurance companies will also follow suit in reducing the premiums. The direct implication for the buyer would be that this twin advantage would offset the cost of higher protection." Ashutosh Limaye -VicePresident, Trammel Crow Meghraj says, "Mumbai's seismic status has gone from medium to mediumhigh now - this relates to a progressive geological phenomenon. In other

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The policy will ensure that homes attain a high level of earthquake protection

in case of natural calamities," he explains. "If there are instructions from RBI on this issue we are ready to comply with the same." Experts reveal that banks were earlier in a dilemma when propeties mortgaged were destroyed in an earthquake. The new guidelines from the NDMA for revised building codes reveals that there is a need for better protection level against a natural calamity . The key advantage of adopting higher levels of earthquake protection is that a much lower interest

words, this certainly is cause for concern. By refusing to grant home loans for properties that do not conform, banks can make a significant and progressive contribution. The minimum that they should insist on is a certificate that affirms a project's earthquake resistance compliance," says Limaye. Besides being beneficial to the financial institutions and developers, the move will also secure the investments and assets of the buyers against any unforeseen calamity . INPUTS: YAMINI DHYANI

Swimming pool and toddlers pool Landscaped garden and children s play area AA luxurious clubhouse with party lounge , steam and gymnasium Jam Temple and school nearby Close to Thane Railway Station and Eastern Express Highway One of the tallest buildings in the vicinity Sample! show flat ready Buildings under construction
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