News : Bill to curb real estate woes in Rajya Sabha

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A bill seeking to protect home buyers from unscrupulous developers and builders and having provisions like jail term of up to three years for offences like putting up misleading advertisements about projects repeatedly, was introduced in Rajya Sabha on Thursday.

The bill also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. It makes it mandatory for builders to clarify the carpet area of the flats as well.

Introducing the Real Estate (Regulation and Development) Bill 2013, Housing Minister Girija Vyas said the bill seeks to establish the Real Estate Regulatory Authority to protect the interest of consumers in the real estate sector.

Ms. Vyas also said the bill is for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, in an efficient and transparent manner.

The bill will also facilitate the establishment of an Appellate Tribunal, which will hear appeals from decisions, directions or orders of the Authority and related matters.

The Union Cabinet had approved Bill on June 4. Under the bill, there will be a model builder—buyer agreement which is expected to reduce ambiguities in real estate transactions.
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Real estate agents will also be asked to register with the regulator, a move that is expected to help in curbing money laundering. The bill that seeks to provide a uniform regulatory environment to the sector, was earlier opposed by private developers but the government stuck to it on the argument that it will infuse transparency.

It has provisions under which all relevant clearances for real estate projects would have to be submitted to regulator and also displayed on a website before starting construction.

The bill has tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of the actual site. Failure to do so for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail.

Source: realtyfact.com/bill-in-rajya-sabha-to-regulate-real-estate/

Government open ways for Multi – brand Retails Bangalore

Big establishments welcomed the Karnataka government’s node to allow foreign Multi-brand retail to start operations in the state, but small businesses intricate by the move expressed cited there objection over the decision, indicated they may protest the move. Further, there isn’t any rush for the foreign retail apparently in the state. Moreover none of the Multi brand retails have applied to The Central government for starting operations in India, without much clarity over the stringent policies to be followed set by the government has hampered the interest of the big Brands into entering the Indian market. The Bangalore Chamber of Industry and Commerce (BCIC), which comprises of big corporates, have shown a positive vibe over the state government’s decision, quoting it to be “a path breaking move”. This move by the Karnataka state government could possibly improve the retail trend while creating a lot of employment opportunities. Which could strongly be a driving force for the state’s economic growth and improve end consumers interest said M Lakshmi Narayan, president of BCIC and MD of global audio major Harman International India. H V Harish, senior VP at BCIC, also cited that government’s decision would give a boost to the agriculture and horticultural sector and also bring a boom into the real estate sector . The Federation of Karnataka Chambers of Commerce & Industry (FKCCI), been a local industry body that represents small and medium business. All this while they have been opposing, the transition of big brands into India through the multi-brand retail model. The organization said it did not want to make a comment based on media reports about the Karnataka government’s change in position on the matter. “We would be meeting the chief minister. After we speak with him and understand the government’s position, we will share our views,” said K Shiva Shanmugam, president of FKCCI. Not all have welcomed the decision with big heart, The Karnataka government’s decision have also faced a lot of opposition by many organizations, One such organization that have been most vociferously opposed to foreign retailers has been the Bangalore Wholesale, Food Grain, and Pulses Merchants Association. The members of the organization mostly operate out of the APMC yards. The opposition by the organization is not the first one, previously when German wholesaler Metro Cash & Carry entered Bangalore, the association had virulently opposed it, this made Karnataka government to strictly impose guidelines on the way Metro operated

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Source: The Times of India, Bangalore

Land revenue bill returned by Karnataka Governor Passed during BJP Govt

Governor H R Bhardwaj on Wednesday returned the Karnataka Land Revenue (Second Amendment) Bill, 2012 , passed by both the Houses of the legislature in last days of BJP tenure.

The legislation was brought by inserting new section 94CC in the act with the intention of regularizing unauthorized occupation of revenue land belonging to government areas with dwelling houses constructed prior to January 1, 2012 by granting the land to unauthorized occupants after payment of small amount of fee.

Justifying the decision to return the bill, governor has said “The policy of regularization of encroachment of government land directly encourages illegal occupation of government land. This amendment will cause severe inroads into the lofty principles such as rule of law, equality before law, due to process, majesty of law, dignity of courts, inalienable fundamental rights, directive principles etc, which are enshrined in the constitution,” he said. He added that in the larger interest of the public, illegal occupation of government land has to be curbed.

Referring to Task Force for Protection of public lands headed by V Balasubramanian, Joint Legislature Committee constituted to go into the deadline of the problem of land grabbing and encroachments and also Supreme Court judgment in the case of Jaspal Singh Vs State of Punjab in January 2011, Bhardwaj in a strongly worded observation has said the amendment bill does not specifically prohibit grant/regularization of common land. “This amendment does not serve any public good or social cause, on the other hand it may lead to illegal grabbing of government land.”

Governor also observed that similar act was passed in April 1998 of regularizing the unauthorized occupation as a one time measure. “However it is not known why such lands under unauthorized occupation made prior to April 1998 could not be granted till now.”

Source: The Times of India, Bangalore

First TDS then Registration, Bangalore Properties

Buying property worth over Rs 50 lakh? Then pay TDS before registering it, or income tax sleuths will come knocking on your door.

The TDS (Tax Deducted at Source) kicks in from June 1 with the implementation of Section 194-IA, announced in the finance budget of 2013-14. As per this section, the buyer should provide TDS documents on transfer or sale of immovable property (mainly land or house) other than agricultural land, before registering the property. The sub-registrars act as check-posts, if such transactions take place and TDS documents are not provided. This is applicable only if the transaction is Rs 50 lakh or above.

This was made clear at a workshop organized by the IT department and the stamps and registration department, to educate sub-registrars on TDS provision on the sale of immovable property, on 11th June.

Of the total transaction, 1% is TDS and 1% is levied as stamp duty, but in case the seller doesn’t provide PAN documents or gives an invalid PAN, the buyer should deduct 20% tax instead of 1%.

S Ravi, director-general of income tax (investment), said: “Sub-registrars ensure that PAN numbers and the permanent address of the seller should be available because many a time, in case of tax evasion and property sale, the original land owner is untraceable by the department. This should be done if the land is sold via a joint development agreement. PAN should be mentioned in all transactions, applicable under this section. Sub-registrars have been sending us a lot of information of TDS collection and cases of evasion too, but now there’s a format which should be adhered to. This format makes it easy for IT sleuths to track cases.”

Inspector-general of registration and commissioner of stamps AS Saleem said: “Out of the Rs 5,260 crore revenue the stamps and registration department collected last fiscal, 60-70% was collected from Bangalore Urban alone. Another Rs 500 crore comes from optional registerable documents like shares and loan bonds. We’re also trying to levy stamp duty on imported goods.”

What the law says

Section 194-IA of Income Tax Act — payment on transfer of certain immovable property other than agricultural land states: Any person, being a transferee, responsible for paying to a resident (transferor), any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 1%of such sum as income-tax.

Note these

Who should pay TDS: buyer of the property

When it should be paid: before registering the property

Sub-registrars must note the permanent address and PAN of seller

In numbers

In 2010-11, 12,000 properties were registered across the state

In 2011-12, it was 3 lakh registrations

Source: The Times of India, Bangalore

Real estate regulator bill passed for buyers relief

The Union Cabinet on Tuesday cleared a legislation to set up a long-pending real estate regulator aiming to protect home buyers from unscrupulous developers and builders.

A real estate regulator — to be set up in every state — will ensure that private developers get all their projects registered with it before sale and only after obtaining all necessary clearances.

“It will be mandatory for developers under the law to get every project registered with the regulator before selling any immovable property,” an official said.

While the commercial real estate has been kept out of purview of the proposed bill, it will apply to residential buildings.

There is a provision for mandatory public disclosure of all project details like credentials of promoters, lay out plan, land status, carpet area and number of apartments booked and status of statutory approvals, addressing a major concern of buyers about incomplete or fraudulent land acquisition and pending clearances.

The consumer-friendly legislation will clearly define carpet area and private developers will not be allowed to sell houses or flats on the basis of ambiguous super area.

The builders won’t be allowed to publish misleading advertisements to lure buyers while advertising the project. “They will have to use the pictures reflecting the actual project that will be delivered to homebuyers,” an official said.

The developer will have to deposit 70% of funds received for a particular project in a separate bank account to cover the construction cost of the project. This provision was made to discourage developers from diverting funds of a particular project to another that often causes inordinate delay.

Punitive provisions ranging from a penalty which may be up to 10% of the project cost, de-registration of the project and imprisonment are being made in the bill.

The Real Estate (Regulation and Development) Bill 2013, which seeks to provide a uniform regulatory environment to the sector, was opposed by private developers in totality but housing minister Ajay Maken stuck to it, saying the basic tenet of the legislation is based on public disclosure that will infuse transparency.

Under the bill, there will be a model builder-buyer agreement which is expected to reduce ambiguities in real estate transactions that not many buyers are familiar with.

Real estate agents will also be asked to register with the regulator. Agents, an important link between the promoter and buyer, have been an unregulated lot till now. Once they are registered, it will help in curbing money laundering.

For fast tracking settlement of disputes, an adjudicating officer not below joint secretary in the state will be appointed by the authority. There will also be Real Estate Appellate Tribunal that will hear appeals from orders, decisions or directions of regulator and adjudicating officer.

Source: The Times of India, Bangalore