NRIs and Taxes

NRIs, your rental income for properties in India is subject to tax in India. While filing taxes you can take a standard 30% deduction on annual value of property, which includes the cost of maintaining the house. Other deductions are home loan interest paid, property and water taxes. Regarding filing of taxes, you don’t need to file until your income exceeds 2 lakhs annually.

Your interest from NRE account, dividend income and interest income from PPF is TAX EXEMPT.

For details on other taxes, check out this NRI Taxes link on Mint (a WSJ partner).

Landlords, your PAN number is required

Whether you are an NRI or not, your PAN needs to be furnished if you fit the following criteria…

1. If your tenant is using HRA (House Rent Allowance) from his company AND
2. If your rent is more than 1 lakh per year

When a tenant claiming HRA rents a house, their company furnishes a form which asks for landlord’s name, contact, PAN number and other pertinent details. If the landlord does not have a PAN, they ask you to declare as such.

For the complete article, check out the Mint (A WSJ partner) article

New home inspections – identifying snags and rectifying them

With too many constructions going on, several builders are in a hurry to hand them over to owners. Many of these hand overs is in an incomplete state and/or poor quality and builders expect owners to identify snags (issues) to be addressed. This is actually the last chance for owners to identify these issues and report, so it can be rectified before making final payment.

How is a new home owner, who may not have much knowledge in home building, supposed to identify all the snags? This is when we started offering the ‘New home inspection’ service performed by a highly-qualified Engineer. At first we approached this cookie-cutter style- we had a template with a list of common issues. We would walk through new homes with this check list to check them off. But as we inspected more and more homes, we realized that there is no common set of issues, every house has a unique set of problems because of various factors- builder, materials used, layout, etc. This led us to approach each house in a customized fashion. Go in with a blank mind (and a blank sheet of paper(s)) without any expectations and start marking down issues.

Some of the major issues we have found are Water seapage, poorly laid sunken toilets, hollow tiles, No rain water harvesting, Weak sunshades, Kitchen counter being too high, Missing skirting tiles, etc. Many of these if left unrectified will start deteriorating the building.

new home inspection report

New Home Inspection Report

You would be surprised to know that even with big name builders our issues list has run few pages long. Hopefully, builders take note of these issues and do a better job before handing over houses, but until then our Engineers will not let them off the hook.

Good luck with your new home! Get in touch with us if you want your home inspected.

How to save on taxes on rental income

There are 3 ways to reduce your tax liability on rental income from your property.

Tax on rental income

  1. Property tax deduction. Property tax you pay in that year can be deducted from your rental income before paying taxes on it.
  2. Maintenance, Insurance, etc. Regardless of how much you spend on repairs or insurance, you can deduct a flat 30% of the rental income.
  3. Mortgage interest deduction. If you have a loan on the house, the interest paid can be deducted, but the max. deduction is restricted to 1.5 Lakhs.

Be sure to account for these before paying your taxes. Here’s the official Govt. of India site for further details.

http://business.gov.in/taxation/house_computationletout.php

Vandalur to get new bus terminus

Koyambedu bus terminus is getting too congested… more buses than what can be parked and general traffic congestion is causing a lot of traffic woes. CMDA’s announcement of a new and larger bus terminus at Vandalur is great news. A bit late, but better late than never. It sticks to our tradition of waiting till a problem happens and then solving it. Just as how we build flyovers at traffic junctions way after they become highly congested. In any case, this is a much needed progress.

This project should also see Vandalur properties appreciate a bit as infrastructure projects are main drivers for property appreciation in India.

How NRIs can sell inherited property in India?

This week, Live Mint (a WSJ partner in India) had an article detailing the nuances with selling property inherited by NRIs.

For the complete article, see link at the end of this post. In short, here’s what needs to be done…

  • Transfer title to your name using a will or succession certificate
  • Collect recent sale deed and parent docs
  • If the house is in a community, get a Co-op certificate, No objection certificate and Occupation certificate

Rest is the regular sales process of hiring an agent and finding buyers.

Read the entire article at Mint How NRIs can sell inherited property in India?

Office space for rent at a prime location in Alwarpet, Chennai

This is the address to be in Alwarpet, Chennai. The office space spans 1100 Sq. Ft. and is located very near Univercell on Manickam road, 50mtrs from TTK road.

Alwarpet Office Space for rent

Call 9962612255 for a visit

Jan 2013 Update: Chennai property prices increase in the last 6 months

Just when everyone is predicting that property price in Chennai would plateau due to the global economic slowdown, Chennai ignores predictions and shows increase in price.

Chennai property price increases

Apartment prices in almost every part of chennai is going up. Here are some of the comps…

Adyar
June 2012: Rs. 12.5k per Square foot (SF)
Jan 2013: 15k per SF

Sholinganallur
June 2012: 4.8k per SF
Jan 2013: 5.3k per SF

Medavakkam
June 2012: 4.3k per SF
Jan 2013: 4.7k per SF

We do see a slowdown is sales volume for the past year or so, but the price only keeps going up.

Floor rise and their preferences

With many high rise buildings with at least 10 floors coming up in Chennai, here is what most renters prefer.

Ground floor – Preferred by families with kids. If you are buying a flat which is nearby a schools, go with the ground floor, finding tenants will be easy. If renters have toddlers or babies, they prefer ground floor.
1st and 2nd floor – All round winners. You cannot go wrong with these floors as everybody likes them.
3rd floor and up – Good for young families without kids or families with older kids. Not so good for older people. The biggest question that comes up is ‘what if the elevators don’t work because of power cuts or other reasons?’. Unfortunately, back up generators don’t work some times. In the past month alone we have had to show a house on the 6th floor in a well reputed building where elevators were not working because back up generator failed. The tenant had to climb 6 floors to take a look at the flat. While this is not common, it does happen.
Top most floor – Not preferred by most renters because of heat issues. Builders have started to address this problem by throwing in free false ceiling throughout the house for home buyers.

So, in order of preference, most sought after flats are 1st and 2nd floor, ground floor, 3rd floor and up, top most floor. But there are always exceptions… for example, when you have a sea view, the higher the floor the more premium you pay to live there.

Residential Land for sale in Sri Perumbudur

Dtcp approved plot very near VGN Brixton, opposite to Hyundai factory and stone throw away from Maharishi vidya mandir school. Plot is 2400 sq. ft. on a 30ft wide road. Priced at 15 lakhs.

Sri Perumbudur Plot For Sale

Ideal investment property in Sri Perambudur with clean documents and lawyer approval. It has large potential for price appreciation since sri perambudur is the new and upcoming industrial hub in Chennai. For the price of a flat at VGN Brixton, you could buy this plot and build a dream home overlooking the apartments and live in walking distance to Maharishi Vidya Mandir school.

Call 9962612255 for details.