Tag Archives: Securities and Exchange Board of India

Introduction of REITs in India will help deepen country’s property industry, says JLLI

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, SEBI, Securities and Exchange Board of IndiaTrack2Realty: The formation of REITs – funds that own real estate but have shares that are listed on the stock market – will encourage the creation of big-ticket institutional-grade buildings, and will give developers a ready outlet for development projects.

Many institutional investors are put off investing in Indian property because it is highly fragmented, sometimes with multiple members of an extended family owning a building in strata-title fashion.

In a statement on Sunday, the Securities and Exchange Board of India outlined the basic rules for REITs. Industry insiders say the rules are very similar to the REIT legislation on the books in Singapore and Hong Kong.

The first talk about introducing REITs came as far back as 2008. But previous administrations dragged their feet on codifying them. Property professionals see their relatively sudden introduction after a consultation paper last October as a credit to the administration of new Prime Minister Narendra Modi and his BJP party.

“The new government is quick on their feet, and giving out decisions,” Shobhit Agarwal, the managing director of capital markets in India for JLL, notes. “They’re trying to become more business friendly.”

Indian REITs, like many others around the world, will be required to pay out 90 percent of their income from stable assets to investors. That will result in a twice-yearly dividend. It makes REITs perfect “widows and orphans” stocks since they spin off cash regularly and are relatively low-risk.

Only 20 percent of an Indian REIT’s assets can be invested in development, the riskiest end of the real-estate industry or in cash and cash equivalents for liquidity management, with a maximum of 10 percent for the former. The remaining 80 percent of the fund’s assets must be invested in income-producing property.

Since those projects – often office buildings or shopping malls – have already been developed and already have tenants, their income stream is relatively easy to predict. While they may increase in value, the REIT will hold them long-term and won’t trade in and out of real estate.

“This is not meant for speculators,” Agarwal says. “These are for investors that are looking for steady returns as opposed to capital appreciation.”

The buildings must have multiple tenants to reduce risk to any one company, and there must be a single ownership structure for any building that is folded into a REIT. The REIT must also hold multiple buildings, and cannot have more than 60 percent of its assets in any one project. It must own assets worth US$82 million at the time of going public, and must have an initial size of US$41 million on the stock exchange when it lists.

Agarwal says that the market was not prepared when India opened up its real-estate market to overseas investors. The government at the time was keen for foreign investors to fund residential development rather than office property. Under existing rules, foreign direct investment must go into new projects under development.

Now overseas investors will be able to access stable assets via REITs. JLL estimates that of the 370 million square feet of Grade A office stock in India, 170 million is of REIT standards.

At the same time as introducing REIT rules, SEBI also created a similar structure known as an infrastructure investment trust that will allow developers of infrastructure projects to sell those into a fund, with the same requirement to distribute 90 percent of profits twice a year.

Agarwal believes the current REIT legislation will appeal most to overseas investors because their tax will only be a 5 percent on capital gains, with dividends untaxed. Indian investors paying corporate taxes are faced with paying tax of 20 percent or more.

But the government is looking into that disparity. SEBI is likely to refine the REIT rules as the industry develops.

“What they have announced is a base – it can only get better from where it is,” Agarwal says. “It is a big step for the government.”

Engaging government into policy advocacy challenging-II

Posted on by Track2Realty

By: Sunil Mantri, CMD Mantri Realty & President, NAREDCO

Sunil Mantri, MCHI, Maharashtra Chambers of Housing Industry, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: The Government of India has been re-evaluating policy measures and modifying these or initiating fresh mandates in order to give a boost to the industry. Changes in policies pertaining to SEZs towards reducing area requirements, the easing of norms for external commercial borrowing (ECB) for development of affordable housing and the augmentation of limits for listed NCDs will go a long way in clearing bottlenecks faced by the sector.

Some policies, such as inviting FDI in multi brand retail, can have an indirect but beneficial impact on the sector. SEBI’s revised draft of Real Estate Investment Trusts (REITs) Regulations, 2013, which was made public for debate in October 2013, once implemented in their new and improved format will also have a positive impact on the real estate industry as it will enable further investment in the real estate sector. Amendments to the Companies Act 2013, with respect to depreciation, consolidated financial statements and provisions pertaining to dividends will also facilitate corporate in the real estate sector.

The Real Estate Regulation and Development Bill, which is still under debate, advocates the introduction of a Real Estate Authority for planned real estate development and aims to provide a platform for the sale of immovable property in an efficient manner. It envisages the promotion of transparency in real estate transactions and focuses on the timely delivery of projects to protect consumer interest.

Inclusion of housing in Governments’ manifestoes: According to a study by KPMG-NAREDCO study, ‘Bridging the Urban Housing Shortage in India-2012’, India’s urban population registered a decadal growth of 32 per cent rising from 285 million to 377 million between 2001 and 20113. It is opined that this trend is likely to persist on the back of robust economic development across the country. Given this scenario, it becomes critical to fill the existing gaps in the country’s strained urban infrastructure and in particular, housing. Primarily, it would be important to address the need in the EWS (Economically Weaker Sections) and LIG (lower Income Groups), which currently account for 95 per cent of urban housing shortage in the country.

Prospective governments should begin planning its approach to solving this problem right away and include its proposals in its manifesto. This will secure the confidence of the electorate.

Rental housing to be encouraged: While owning a home is a basic and valid dream, the prospect of renting houses should be encouraged with appropriate legislative facilitation. This will ensure a regular stream of investment into housing projects from investors who can expect returns in the form of rent and capital gains. Once the housing stock is adequately built up, it will automatically translate into a larger market for home owners too.

Ready-made tenement under the Public Private Partnership (PPP) format: The influx of people from rural and semi-urban areas to cities, coupled with the acute shortage of affordable housing, has resulted in the mushrooming of slums in these cities. The involvement of developers by providing them incentives for construction of tenements would help solve the problem without putting an excessive burden on the exchequer.

Engaging government into policy advocacy challenging-I

Posted on by Track2Realty

By: Sunil Mantri, CMD Mantri Realty & President, NAREDCO

Sunil Mantri, MCHI, Maharashtra Chambers of Housing Industry, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: The real estate sector in India today is developing at a scorching pace. Factors such as higher levels of income and purchasing power and the growing need for entertainment, leisure and shopping, the government’s focus on infrastructure development, rapid urbanisation driven by rural-urban immigration and an emerging trend of nuclear families, greater availability of loans to finance real estate purchases, amongst others, have been instrumental in this development.

It is a sector of strategic economic importance too as it is the second largest employment generator, after agriculture and contributes about 6.3 per cent to India’s Gross Domestic Product (GDP). Looking ahead, according to the India Brand Equity Foundation (IBEF), this sector is expected to post annual revenues of US$ 180 billion by 2020 against  US$ 66.8 billion in 2010–11, a compound annual growth rate (CAGR) of 11.6 per cent.

Market dynamics and cycles

The development of the real estate sector is becoming more broad-based. At one level, the growth of all four major segments–residential, commercial, industrial and hospitality-has picked up. At the geographical level, there has been a spread of townships and industrial parks beyond metros into smaller cities and towns and along major highways. However, this growth is subject to market cycles.

The industry faces periods of recession, recovery, expansion and contraction, which are closely linked to economic trends in the country. For instance, during the past decade or so, the period between 2001 and 2005 marked the beginning of a take-off with prices rising in the sector. This was followed by a high growth phase between 2006 and 2008. After the sub-prime crisis that rocked the global economy in 2008, the sector headed for a recessionary phase due to a dent in incomes and poor economic growth.

The sector has gradually recovered to move into a consolidation phase after 2011, wherein prices have been rising and demand has picked up in line with economic and income growth.

Issues facing the sector

The real estate sector has been evolving, over the years from a largely unorganised sector to a relatively organised industry. This has been due to various developments on the policy front and the participation of international real estate players, reputed Indian corporate houses and foreign investors. During the past decade, there have been reforms across a wide spectrum of the real estate issues from land acquisition and regulation to protection of customer interests, foreign investment allowed since 2005 and the introduction of Real Estate Investment Trusts (REITs).

While this current wave of innovation and energy in the sector has infused new life into it, there are still a number of issues that need focused attention, failing which the sector will not be able to achieve its full potential. According to the World Bank’s Doing Business 2012 Report, India ranked high in terms of need for housing and work spaces. However, it ranked as low as 181 in terms of construction permissions and processes out of 183 countries studied. The sector is mired by red tape, complicated land laws, volatility of raw material supply, labour issues and weak law enforcement and property rights. Further, the approvals of building plans by the planning authority or a municipal corporation result in abnormal delays.

Availability of funding for real estate development continues to be an issue. In general, the current regulations on foreign investment make it difficult for small developers to access low-cost capital. Ironically, while bank funding is the cheapest source of funds for the real estate sector, due to end-use restrictions and close scrutiny of the use of these funds in construction, the industry not been able to extensively use these funds for growth capital such as land acquisition.

According to data from the Reserve Bank of India (Deployment of Gross Bank Credit by Major Sector), bank credit exposure to the real estate and housing sector as a percentage of Gross Bank Credit declined from 10 per cent in FY10 to 7.9 per cent in FY13.  In this space, however, NBFCs have been actively pursuing last mile funding opportunities, especially in projects with substantial investments but a lack of “last mile funding.”

…to be continued

Mantri Realty to invest Rs 750 cr for three housing projects

Posted on by Track2Realty

Sunil Mantri, MCHI, Maharashtra Chambers of Housing Industry, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty-Agencies: Mantri Realty on Friday, Dec 7, said it will invest up to Rs 750 crore to develop three housing projects in Maharashtra and Karnataka over the next 2-3 years.

“We will launch 3 new projects next year. The total investments on construction of these projects will be Rs 700-750 crore,” company Chairman Sunil Mantri told PTI on the sidelines of NAREDCO summit here.

He added that one project each will be launched in Pune, Solapur and Bangalore during the period. Of these, the Pune project will be launched by March next year and will be a luxury housing project. The flats would be offered for Rs 1 crore each in the project.

“We will have about 8 lakh square feet area in the Pune project which will house around 350 flats. We will invest Rs 400 crore in the project,” he added.

The company will also launch another luxury housing project in Solapur, Maharashtra next year, which will also have some commercial spaces.

“The Solapur project will have 100 units and we are going to invest around Rs 100 crore on its construction,” he said.

Sahara seeks review of Supreme Court verdict on refunding Rs. 24,000 crore

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Subrata Roy, Sahara India, SEBI, Securities and Exchange Board of India, Track2Media, Track2Infra, Track2RealtyTrack2Realty-Agencies: The Sahara group today moved the Supreme Court seeking review of the verdict ordering it to refund Rs. 24,000 crore, raised from investors through optionally fully convertible debentures (OFCDs).

Challenging the apex court’s August 31 verdict on 55 counts, the group sought the hearing of its review petition in the open court.

Setting the deadline to refund the money, the apex court had said if the firms—Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC)—fail to refund the amount, market regulator, the Securities and Exchange Board of India (SEBI), can attach properties and freeze bank accounts of the companies.

It had asked the companies to refund the money to their investors within three months with 15 per cent annual interest. It had also asked Sahara to furnish all its documents to SEBI and also appointed one of its retired judges, Justice B.N. Aggarwal, to oversee the action taken by Sebi against the two Sahara group firms.

Interestingly, the group filed the review petition a week after promising to the apex court that its two firms would refund the money within the stipulated time frame. “We will refund the amount. There is no question of going back,” senior advocate Gopal Subramaniam, appearing for the company, had told the apex court on September 28.

Sahara to refund Rs 24,000 cr to investors in 3 months

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Subrata Roy, Sahara India, SEBI, Securities and Exchange Board of India, Track2Media, Track2Infra, Track2RealtyTrack2Realty-Agencies: Sahara Group on Friday, Sep 28, assured the Supreme Court that its two companies, which had raised Rs 24,000 crore through Optionally Fully Convertible Debentures (OFCDs) from their investors will refund the amount within three months.

“We will refund the amount. There is no question of going back,” senior advocate Gopal Subramaniam, appearing for the company, told a bench headed by Justice K S Radhakrishnan.

He also pleaded with the bench to grant the firms some time to sort out the ‘disagreement’ with the Securities and Exchange Board of India (SEBI), which has alleged that the company is not supplying all the documents pertaining to investors to it according to the apex court’s previous order.

The bench was hearing an application by SEBI, which has alleged that the Sahara Group has not furnished all documents in its custody to the market regulator as was directed by the apex court to do by September 10.

The bench after hearing the arguments posted the matter for further hearing on October 19. The apex court on August 31 had said that if the companies — Sahara India Real Estate Corporation and Sahara Housing Investment Corporation — fail to refund the amount then SEBI can attach properties and freeze bank accounts of the companies.

It had asked the companies to refund the money to their investors within three months with 15 per cent annual interest. It had also asked Sahara to furnish all its documents to the regulator.

Sahara blames SEBI for not accepting investor data

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Subrata Roy, Sahara India, SEBI, Securities and Exchange Board of IndiaSahara India has accused market regulator SEBI of not accepting data, since Monday, of the three crore investors of the company who had invested in its optionally fully convertible debentures (OFCDs). Sahara sent the data to SEBI following a Supreme Court order to furnish documents relating to investors, supporting redemption documents, application forms, approval and allotment of bonds to the market regulator.

The apex court on August 31 had directed two Sahara group companies-Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHICL)-to furnish data of around three crore OFCD investors, who had invested about Rs 17,400 crore in these two companies, to the market regulator.

A truck carrying a voluminous data in about 30 crore pages reached SEBI office on Monday evening at 7.30 pm but was denied entry by SEBI officials, who refused to take delivery of the documents on Tuesday morning, said a Sahara statement. It added that a company representative was detained by SEBI till 7.30pm on Monday evening unless he accepted a SEBI letter, proposed to be addressed to Sahara. SEBI could not be reached for a comment.

” SEBI is acting with vengeance…Such an attitude is questionable from a respectable regulator like SEBI,” said the Sahara statement, adding that SEBI is not co-operating as the documents are being delivered in parts and is instead asking for original vouchers.

Sahara Group clarifies after Supreme Court verdict

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Subrata Roy, Sahara India, SEBI, Securities and Exchange Board of IndiaThe Sahara Group has clarified their stand in public after the jolt by the Supreme Court asking them to refund within three months Rs. 24,029 crore it had collected between 2008 and 2011 from over 2.96 crore investors, flouting mandatory regulatory provisions and the Company Act. In the wake of media onslaught after the Court asked two Sahara Companies to pay 15% interest on the amount, the Group in a statement has following version in its defence.

Track2Realty presents the Sahara Group version in verbatim–

In 2008/2009 Sahara filed its RHP under the provisions of the Companies Act with the Ministry of Corporate Affairs, which was duly registered and approved by them for raising money for Real Estate Business on the same basis as was done in 2002 for an earlier issue of Sahara.  The earlier issue was duly closed and registered with the competent authority in 2008 along with the list of all investors running into millions.

Any country’s system will collapse if after getting clear, clean permissions from country’s competent Government’s Regulator, the company is so severely punished.  Meaning, lawful bona-fides are severely punished with retrospective effect.

Here we want to inform all our Hon’ble Depositors and investors that you need not worry about anything and be at absolute peace since as Sahara is the most dutiful and absolute honest custodians of your money and by the grace of God, we are so healthy with all-round strength that there cannot be even one day delay in any payment commitment of Sahara.

In the last 33 years there is not a single complaint of non-payment, whereas we have paid around Rs.1,40,000 crores maturity/redemption and against the enrollment of around 12 crores investors.

People cannot accept Sahara’s meteoric growth. Instead of being appreciated, all along we have been at the receiving end of the bashing from all authorities again and again.

All along for the past 7-8 years we have felt and faced the   onslaught of various authorities since they concluded whimsically without any verification that the deposits, investments we have received from the public are fictitious and bogus as they feel the money with us is ill-gotten from politicians etc.

Firstly, Income Tax Department held on to our refund for decades to the tune of around Rs. 2000 crores, but ultimately it was truth that prevailed, they verified and verified and ultimately they had to pay us back the entire amount in the year 2011.

Reserve Bank of India, in 2008, killed our Financial Inclusion based RNBC activities and gave us 7 years’ time to repay our depositors, which we cleared in just 4 years.

Of course we shall never blame the Respected Judges of Hon’ble Courts of our beloved country.  However, it is the fault of the machinery which presents the facts incorrectly and in such a manner so as to create a false and negative perception so as to convince the Hon’ble Courts that Sahara has collected unbelievably large sums of money from public which are actually ill gotten and fictitious.

AND THE FACT IS THAT THERE IS NOT A SINGLE BENAMI MONEY AND THIS STATEMENT IS SAHARA’S CHALLENGE TO ALL AUTHORITIES OF OUR COUNTRY.

Further we claim with challenge that each and every rupee we have accepted in last 33 years is always against receipt from the company and with an application form duly signed by the Hon’ble depositors/investors.  Every rupee which has come to Sahara can be verified by the authenticity of the depositors/investors. WE INVITE THE CONCERNED AUTHORITIES OF THIS COUNTRY TO COME AND VERIFY.

FURTHER CHALLENGE OF SAHARA TO ENTIRE AUTHORITY OF THE COUNTRY TO COME AND VERIFY OUR CLAIM THAT SAHARA HAS NOT DONE ANYTHING EVER AGAINST THE LAW OR SPIRIT OF LAW, SAHARA HAS NOT DONE ONE RUPEE BLACK MONEY BUSINESS, NOT EVER GONE TO ANY AUTHORITY FOR UNDUE FAVOUR (whether through licensing or beneficial quotas) FOR EVEN ONE RUPEE EARNING WE ONLY BELIEVE IN HARD WORK WITH ABSOLUTE HONESTY AND DEDICATION.

Even we would like to mention that all along MCA, RoCs and Sahara were lawfully (as per the Company’s Act) absolutely right, everyone’s problem is why and how can Sahara raise so much of funds from public. Irresponsible people only conclude that this is all ill-gotten money and from the politicians, whereas around 90% of our depositors, investors are those very small investors, who never go to banks and banks too never reach them.

We should rather always get a pat on our backs for such good social work.  Had our committed Ten lakh workers not gone to those small depositors they would have spent those monies in alcohol or gambling etc., we are saving their monies and bringing them to the nation’s mainstream and thus helping those poor people for their better future out of forced savings.

The saddest part is sitting on the chair in air conditioned offices, they imagine and allege and never bother for any sort of verification.

If we continue to write about THE INJUSTICE WE HAVE FACED FROM SO FAULTY A SYSTEM OF OUR COUNTRY probably huge space will be required.  Let us not go for those, but we should write here that for the future interest of our country these totally unjustified tortures are responsible for India’s corporates (Big, medium or small) continuously developing business outside the country and good brain run away from the country.  Of course, we at Sahara, we are not escapists.  We shall fight against the system and grow in our beloved country for the growth of our country.

Through our expansion programs in next 2 to 3 years we shall provide permanent salaried employment of around 3 lakhs people apart from around 5 lakhs new introduction of field workers.  Meaning Sahara shall be providing livelihood to around 18 Lac families.

Sahara Group negotiating to buy 55% stake in Beverly Hilton

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Subrata Roy, Sahara India, SEBI, Securities and Exchange Board of IndiaThe Sahara Group, fresh after a string of acquisitions of Marquee Hotel properties in the UK and the US, is in talks with US-based Oasis West Realty to pick up a controlling stake in Beverly Hilton Hotel, a landmark Los Angeles property that has been hosting the Golden Globe Awards.

The owner of Oasis, Beny Alagem, had approached Sahara to sell 55% stake in the iconic hotel for about $340 million (Rs 1,900 crore), sources close to the development said.

Sahara group Chairman Subrata Roy confirmed that his group was in talks without divulging any further details.

“They had approached us sometime ago and we are in negotiations.”

Oasis was not immediately available for comment. Sahara Group’s external communication agency did not respond to emailed queries sent by Track2Realty seeking information on the talks.

The Sahara Group last month bought a majority stake in New York’s iconic Plaza Hotel for Rs 3,200 crore, the second iconic property it has purchased in recent years. In 2010 it acquired the Grosvenor Hotel in London. Oasis has been scouting for an equity partner to fund expansion plans since 2011, after Alagem abandoned an earlier plan to sell the hotel for about $500 million.

Oasis plans to add a 170-room, five-star hotel and a 150-condos residential tower to the nine-acre property. The proposed hotel block, a source said, would be managed by US-based Hilton Hotels  and named The Waldorf Astoria.

The 57-year-old Beverly Hilton, on the intersection of Wilshire and Santa Monica boulevards, hosts about 175 red carpet events every year, including the Golden Globe Awards. It was also in the news recently after singer Whitney Houston was found dead in one of its suites last February.

The Sahara chief, however, did not disclose how he planned to fund the acquisition of the 570-room property in Beverly Hills.

Government White Paper says realty vulnerable to black money, suggests for TDS on sale-purchase of properties

Posted on by Track2Realty
Pranab Mukherjee, Finance Minister of India, Budget 2011, SEBI, RBI, Securities and Exchange Board of India, Reserve Bank of India, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyA White Paper on black money tabled in Parliament on Monday, May 21, has named real estate among others as most vulnerable to menace of black money. Given that land is part of the top black money generators, the white paper suggested that states could consider taxing farm income to curb black money.
In order to check generation of black money in the real estate sector, the government’s  White Paper has suggested introduction of tax deduction at source (TDS) on sale-purchase of properties.

“One of the measures for deterring use of the real estate sector for generation and investment of black money could be the provision of deducting tax at source on payments made on real estate transactions and mandating it as a pre-condition for registering of the transacted property,” the White Paper on black money prepared by the Finance Ministry said.

The current provisions of the direct tax legislation provide for mandatory furnishing of the tax identification number by the buyer and seller of an immovable property if the value exceeds Rs 5 lakh, it said.

Also, every registry of property is required to furnish annually information regarding transactions in immovable property if the value exceeds Rs 30 lakh, it said. However, it said, as many registrar offices still operate on a manual system, there are a number of gaps and lapses in the reporting of such transactions.

Besides, the paper has suggested more effective reforms in the real estate can yield a significant dividend in the form of reducing generation of black money in the long term.

It has also suggested for introduction of the provision of no objection certificate (NOC) in the income tax law with safeguards to reduce administrative complications and increased ease of compliance, so that an appropriate and uniform database is set up and a proper national-level regulation also put in place.

The real estate sector in India constitutes about 11 per cent of the GDP, it said, adding, investment in property is a common means of parking unaccounted money and a large number of transactions in real estate are not reported or are under-reported.

The report noted that due to rising prices of real estate, the tax incidence applicable on real estate transactions in the form of stamp duty and capital gains tax can create incentives for tax evasion through under-reporting of transaction price. This can lead to both generation and investment of black money.

The buyer has the option of investing his black money by paying cash in addition to the documented sale consideration. This also leads to generation of black money in the hands of the recipient, it said.

The other vulnerable sectors of economy with regard to generation of unaccounted money is gold trading.
1 2 3