How Property Rights Of HUF Members Are Limited

It is painful to see a large chunk of your income go as taxes. You try every trick in the book to save much as possible. Among the many popular tax-saving exercises is the formation of a Hindu Undivided Family (HUF) by people belonging to the faiths of Hinduism, Sikhism, Jainism and Buddhism.

Before we move forward let us quickly understand what an HUF is. An HUF consists of a common ancestor and all of his lineal male children together with their spouses and spinster daughters. This means Ram, his wife Sita, their unmarried daughter Rama, their married son Rahul and his wife Rajni can together form an HUF. Rama would become a part of the HUF of her husband’s family once she gets married. At the same time, she would remain part of her father’s HUF.

Because an HUF is taxed separately from its members, it can claim deductions and exemptions under various sections of the Income Tax Act. As a combined entity, member benefits greatly if the HUF is registered and reports its income as a separate taxpayer. In fact, members will find banks more welcoming in case they are approached for a home loan, etc.

However, members an HUF also have to face certain restrictions.

Your share is constantly diluting

Each member has an equal right to the property owned by an HUF. This means the said property cannot be sold without having each member of the family on board.  New members that get added to the family by way of birth or marriage also have an equal share in the property. In fact, even an unborn child, who is still in the womb of its mother, has a right to the property.

This means the share of the existing members keeps diluting with new additions. While all goes well till there are no disagreements among members, matters might go out of hand in case of any discontent arises. By its very nature, an HUF is an ever-increasing entity as new members keep getting added. In such a scenario, managing the family and its finances might get quite complex.

Separation may turn ugly

In case there is disagreement among the members of an HUF and they decide to part way, they will have to dissolve the entity through a legal process known as a partition. Cases lying with courts across India testify partition process often goes ugly.

It must be noted here that once an HUF is formed it has to keep filing income tax returns until the time it is partitioned. When an HUF is dissolved, assets held by it are sold to be equally divided among all members. Now, each member will have to pay taxes on the profit thus made; the law perceives this gain as their individual income. Even if a new HUF is formed by married people who have exited the previous HUF, the income of the property would be taxed in the hands of new HUF.

Her dilemma

Property owned by women members is known as stridhan (the property of a woman), and income from it is not taxable as income of an HUF. This also means women members of an HUF cannot combine their separate assets with the property of the joint family. However, they can gift their property to the HUF.

How to Pay Your Property Tax?

Funds collected through property tax are used for the development of your locality. This is why it is important you pay your property tax on time. And, the growing usage of technology in government offices has made the process rather simple.

What is property tax?

Levied by the urban-local bodies such as municipal corporations, funds collected through property tax are used for maintaining basic infrastructure. As this tax is levied by local authorities, there is a variation in their assessment, rate band, valuation and payment procedure from city to city. Referred to as a house tax in common parlance, property tax is also applicable to various residential, commercial, institutional and official establishments. Properties are categorised under 70-80 heads and rates vary for each head. So, one must ensure that his property in evaluated under the proper category. Apart from property tax, there might be certain other charges as well like water tax, sever charges, etc., which also need to be paid. Property tax is levied on the annual rental value (ARV) of your property.

Identification

There is a unique identification number allotted to each property, which is subject to taxation. This unique ID can be used to locate the property in government records. This number also allows you to use the e-portal to file the property tax online. For example: Your address might be B-23, Imperial Towers, Sector 51, Noida, but you would require the ID number for all taxation and related purposes.

You can locate this number from your last property tax payment receipt. After getting your property registered with the municipal authority, this ID number is generated.

Evaluation of property tax liability

Municipal corporations issue guidelines from time to time and property owners are supposed to do self-assessment of their tax liability based on them. A periodic scrutiny and revision in also undertaken by your municipality. If you undervalue your property in your self-assessment, you may face hefty penalties. For example, Section 152A of the Delhi Municipal Corporation Act, 1957, provides for prosecution for willful furnishing of wrong information.

Exemptions

These entities are given an exemptions in property tax:

  • Public charity
  • Public worship
  • Burial/cremation ground
  • Heritage land or building
  • War widow/ gallantry award winner
  • Government buildings
  • Foreign consulates

Valuation

Your property is evaluated according to:

  • The locality
  • The vicinity of public parks/width of roads
  • The structure (pucca/semi-pucca/kutcha)
  • The occupancy factor (rented/self-occupied/ semi-rented
  • The year of construction
  • Usage of premises
  • The floors
  • The covered area
  • The vacant land use

(For example, valuation of a flat in Mumbai is done by the following formulae: Property tax = base value × built-up area × age factor × type of building × category of use × floor factor.)

ARV in case of rented property is maximum of the following:

  • Municipal valuation
  • Rent received
  • Fair rent as determined by the Income Tax department

Timely payment a must

To encourage timely payment of property tax municipal authorities give certain rebates and discounts. In case of a default, you may face a penalty or face actions such as disconnection of water or power facilities, etc.

For the convenience of people, there are camps arranged from time to time where relaxation and rebate is given to past defaulters so if you have for any reason defaulted in the past you can avail that opportunity to clear off all your pending dues.

What Is A Structural Safety Certificate And Why Is It Important?

While buyers are keenly involved into the nitty-gritty of their home interiors, the strength of the material being used while constructing the structure is often ignored. Those investing in high-rise buildings are mostly unaware of the construction grade of residential and commercial projects. This is another reason why ‘premium construction quality’ has become one of the unique selling points for the real estate developers, especially in the national capital region. 

What is a structural safety certificate?

The structural safety certificate is proof that the building’s structural plans submitted for approval satisfy the safety requirements for all natural calamities such as earthquake and cyclone, as given in the Part-6 (Structural Design) of the National Building Code of India, 2005. The certificate is provided by the structural engineers and usually the civic administration issues these after getting it verified from the experts. The certificate also states that the design has been done after a detailed soil test, and that the structure is fit for use. Some states have also made it mandatory for property owners to submit a structural safety certificate at the time of property registration.

State initiatives for structural safety

In 2011, the Delhi government made the structural safety certificate mandatory for property registration.

Similarly, in Gujarat, the structural safety audit was made mandatory for old buildings, in 2014.

Till 2018, there were 10,000 buildings that were still lacking the structural safety certificate. In fact in Vadodara, the structural safety certificate were made mandatory for buildings older than 30 years, in June 2019 after four building collapse accidents happened in one year.

However, Chandigarh is setting an example for all the metro cities which are blindly regularising unauthorised colonies without ensuring infrastructure stability. The UT administration has made the structural safety certificate from a qualified empaneled structural engineer registered with it, mandatory for availing the benefit of the regularisation scheme.

Quake-safe structural safety certificate coming soon in Delhi

Soon, the Delhi civic authority is going to make quake-safe certificates compulsory for all the buildings in the city. Around 32 lakh buildings will be affected by this new rule. The administration might also introduce a cess on property tax or building plan sanction fees to fund the renovation of public buildings in Delhi which falls in Seismic zone 4. Under this plan, old buildings higher than 15m, will be the top priority under the quake action plan.

 

Property Rights Of An Adopted Child

An adopted child enjoys all the rights that a legal heir would in a normal scenario. The term “son” is not defined by the Hindu Succession Act 1956 and, therefore, for all purposes, adopted son is also as much a legal heir as a biological son (Class-I).

According to the law, if a Hindu man dies intestate (without a will) his property can be inherited by Class-I heirs.

Conditions for adoption

According to the law, a Hindu, unmarried child, below the age of 15 years, can be adopted if he/she has never been adopted previously.

However, the Guardianship law and the Juvenile Justice Act 2015 upholds that children who aren’t Hindus, has not completed 18 years of age, and is an orphan or abandoned, can also be adopted. Islam, Christianity, Parsis and the Jews do not have laws related to adoption and, therefore, if they wish to adopt, they must take up the guardianship of a child under the rules laid out in the Section 8 of the Guardians and Wards Act, 1890. Similarly, there are many rules that to-be adoptive parents need to follow.

Can the adopted child claim right in property?

Yes, an adopted child can stake claim on their adoptive parents’ property. The child is entitled to inherit from his adoptive father and other lineal descendants, such as a biological heir.

At the same time, the adoptive father and his relations, too, are entitled to inherit from the adopted son.

However, according to the Hindu Adoptions and Maintenance Act, 1956, after adoption, the adopted children lose all their rights in their biological family, including the right to claim any share in the estate of the biological father or relations, or any stake in the coparcenary property.

Exception to the rule

An adopted child cannot claim share in the property of their adoptive parents if the parent was a disqualified heir to their parent’s property. What paves way for disqualification? The law states that, “No person shall be disqualified from succeeding to any property on the ground of any disease, defect or deformity or save as provided in this Act, on any other ground whatsoever,” but remarried widows, heirs of a convert who have not retained the original religion at the time of succession, criminals, half-blood are some conditions wherein the adoptive parent who themselves cannot inherit will not be in a position to devolve their property on to another.

Do note that biological parents can give their property to their child who has been adopted by another as a gift or through a will.

Read: Hindu Succession Act: These Persons Cannot Inherit Property 

With inputs from Shaveta Dua 

Why Smart Homes Appeal To New Age Homeowners

Smart homes as a concept have really received acceptance in the past few years, with considerable technological advancements in real estate. With their promise of a better, luxurious and less wasteful way of living, they have managed to get people’s attention. Although they sound great on paper, it is also prudent to keep in mind the mentality of the general home owner and whether he’s likely to welcome this subtle yet distinct shift in his way of living. With their mind set, new-age homeowners are speculated to be the expected crowd for this modern type of living and here are some reasons why.

 

  • Ease of living: The modern generation is all about increasing efficiency and the ease with which they get certain work done. This quest for easing everything out has also spilled into their habit of living and therefore, smart homes appeal to them. With their increased connectivity and the ability to control almost everything remotely and from one particular place or app, new- age homeowners would choose to bid good-bye to worrying about various components and parts of the traditional house and instead control everything remotely with ease.

 

  • Kinder to the environment: Contrary to popular opinion, modern technology is geared towards saving the planet. Smart homes initiatives were founded on the principle of giving back to the environment by cutting down on harmful emissions and reducing wastage. The use of updated and better quality material conforms to the current emission norms.

 

  • Financing: Although smart homes may appear expensive, but from a long-term financial standpoint, it sings a different tune. Smart homes come with appliances that pay off by reducing wastage and increasing efficiency, resulting in reduced cost of operation. This, when compared to the traditional concept of housing and the appliances used there, one understands that the cost of running and maintaining traditional houses are far higher than those in a smart home, where the appliances are carefully streamlined to make sure there is no spillage.

 

These are some of the points that highlight that smart homes evoke a sense of progression and futurism, which beckons the millennial. Knowing that they are the immediate future of this planet, their choices matter and smart homes fulfil their expectations on how housing should be.

5 Home-Buying Tips For New Parents

Becoming a parent is no small things. From cautious investments to taking financial measures, a new parent has to look into several aspects of money management. When it comes to buying a property, homebuyers who are also new parents have to think about present as well as future needs of the family. MakaanIQ shares few tips for new-age parents who are considering to expand their family and upgrade their home- 

  • Spaciousness 

Before you finalise your house, you need to take into account the space your children would need when they grow up. It is important that you have an extra room for their future needs which can be used for nanny’s room or their reading room in future. If due to financial issues you can’t go for a house with extra rooms, buy a house with a basement or a loft space. This can be converted into bedrooms when the need arises.

  • Baby-proofing

Apart from the size of the home, it is essential that you keep all the practicalities in mind. For instance- as a new parent you would need a home where you can easily move strollers. You would also want balconies with high railings.  Therefore it’s good to have a home with an open floor so that you can customise and modify according to the evolving needs of your family. 

Also read: Practical Baby-Proofing Tips for Young Couples

  • Kid-friendly neighbourhood

Having all amenities in a close proximity should be your preference if you are shifting to a new neighbourhood. It will be nice if there are good play schools around, community parks, kids’ play area, entertainment options. Consider buying a home in localities which are close to good schools so that your kid can save time in traveling. 

  • Safety issues

Parents definitely want their kids to have a safe life. So, it becomes essential to ensure that there are no sharp corners, open stairways and banisters with wide gaps in the house. Also, you can ask the builder to install channel gateways for extra security. Close-circuit cameras, doorbell camera, round the clock security guards are other options to ensure your kid’s safety. 

  • Financial planning

Buying a home involves paying upfront payment of at least 20 per cent of the final price. Being a parent requires you to be ready with emergency funds if need arises. At the same time, home buying might also need a contingency fund for minor wears and tears. Therefore it is advisable for new parents to keep at least 10 per cent of the property cost as a separate fund for such expenditures before signing the dotted line for buying a home. This can save you from financial crises. 

Checklist For Signing A Lease With A New Landlord

When one finds the right apartment, one tends to sign the lease in a hurry but this excitement often leads to mistakes. Before committing to any lease for rent, you should be sure about what you are getting into. It’s very tempting to lease a new apartment while overlooking important issues related to provisions and other details. While most agreements end well there are instances of many people having to face the heat due to their ignorance of the clauses in the agreement. To ensure a peaceful occupancy and a simple exit, you should check out the following things before signing up the lease.

 

1. Is the condition of the property documented?

While renting a car, you will always look for any pre-existing dents and have them documented. An apartment is the same. Don’t sign the contract until you are absolutely satisfied with the condition of the property and in case of any deficiencies, have them documented. A thorough home inspection is important because it helps you determine if everything in the house works or not, if there is any damage from before and making notes of such deficiencies if present. Your landlord should provide you with a list of all the components that he has fitted into the house before you have taken over. It should include proper itemisation, along with separate lists for separate rooms. The kitchen and washrooms should have especially detailed lists, along with the acknowledgement of the working condition of each of them.

 

Before you invest your hard-earned money in a property, how do you ensure that it has no flaws? To bring you peace of mind, Housing.com has partnered with experts, to bring Home Inspection Services. Select from a range of home inspection packages, including civil, installation & finishing, electricity and plumbing, on Housing Edge, get a detailed report and make informed investment decisions.

 

2. Is there a possibility of you having roommates?

You may believe that it’s common for people to live with roommates in rental houses and apartments but that does not mean it is something all landlords allow. If you sign a lease with a roommate too, a situation might arise wherein, they have to move out and someone else will want to move in. You should not assume that it is alright to do so without the permission of the landlord. Get to know what the rules are. The same advice should be followed for subletting too.

 

3. Are there any clauses for landlord inspection?

Almost every lease has some sort of clause that allows the landlord to inspect the property once you have moved in there. However, the terms and conditions of that inspection vary hugely. You should be especially careful of any language that enables the landlord to visit the property for an inspection unannounced and more careful for any language that provides for unlimited inspections. As you can probably imagine, it will be inconvenient if this happens regularly. You should try your best to keep these inspections limited and never without prior and proper notice, along with a suitable reason. Most places have laws that provide substantial rights to people who live in rental properties. You should look out for any provisions added with subtlety into the lease that attempts to restrict those rights.

 

Everything Buyers Need To Know About Patta Land

Colloquial terms are very popular in Indian property-related transactions, often leaving buyers and investors wondering about what their legally-binding interpretation could be. One such term, primarily used in land-related dealings in north India, especially Uttar Pradesh and Bihar, is patta.  While the term ‘patta’ conveys ownership over a land parcel, its legally binding meaning is slightly different.

What is patta?

The Hindi term ‘patta’ literally means tenure and its legal interpretation –lease – derives from this primary significance. When the rights of a land parcel are transferred by the owner to another entity for a specific period through a lease, a patta document would formalise the process.

“A patta document signifies that a land parcel has been acquired for a specific time period by an entity by carrying out a lease agreement. Thus, patta is nothing but a lease agreement. It must be noted here that the title of the land isn’t transferred in the name of the entity leasing the land; it remains intact with the original property holder,” says Brajesh Mishra, a Gurgaon-based lawyer specialising in property law. “Buyers often confuse this term with land holding, which is nothing but a widely-held wrong notion,” adds Mishra. The document, also referred to as record of rights, clearly mentions the name of the lessee as patta-dhari, the leaser as patta-data and the leasehold property as patta-dhriti. As this lease is registered before legally coming into effect, the local revenue department keeps a record of all lease agreements.

Word of caution

Buyers investing in plots have to remember that a lessee has no legal right to sell a property. For a plot purchase, one has to deal directly with the landlord while also making sure that the said property has not been leased by him.

Best Feng Shui Colour Ideas For Your Home

The choice of colours for your home reflects your thoughts, mood and personality. When used in the right manner, colours can have a therapeutic effect. While colour trends keep changing with time, there are certain colours that never go out of fashion.

The Feng Shui colours, which bring the desired Feng Shui energies to your house, create harmony and balance. MakaaniQ lists some classic Feng Shui colour ideas for attracting positivity to your home.

Yellow

 Yellow represents the fire or earth element. Yellow hues add sunny, nourishing and happy feel to the atmosphere. With a touch of yellow, your kitchen, living room or kids’ room can add a welcoming Feng Shui energy to the space. Sunflower yellow or pale buttery yellow colour tone are some suitable options.

Red

A fire element, red is a vibrant colour that symbolises good fortune, passion, courage and romance. Jazz up your living room, dining room or kitchen by using dynamic shades of red. The colour is also ideal for southeast-facing rooms. But remember to balance the energy of red with some calm colours.

Green

Green hues carry healing Feng Shui vibrations from the nature. The colour reflects the wood element and is said to heal headaches and eliminate anxiety.

Blue

Blue represents the water element. An elegant and serene colour, blue encourages positive communication, calmness and spiritual inclination.

Orange

Orange is a mix of red and yellow hues, so it captures the energies of both colours. Incorporate orange in your home décor to create a lively and fun-loving aura. Earthy orange is a great choice, especially for bedrooms.

White

White is a metal element and denotes purity, innocence and spirituality. Adding this colour to your bathroom will be a fantastic idea.

Grey

Greys make for a neutral and calm intonation and represent the metal element. They are best used as an accessory colour.

Brown

Brown is an earthy colour. A bedroom or living room in a brown-coloured theme is generally an area full of warmth and comfort.

Also Read: Feng Shui Colour Themes That Can Attract Wealth

7 Easy Ways To Give Your Wall A Complete Makeover

There are many things in your home that are close to your heart or have memories attached with it but are of no use. These are often dumped in that box holding all the things you do not need. However, there is an interesting way to bring to life these old memories and give them a place in your home’s décor – turn them into art.

And, while you thought art was expensive, these old memories will only make it priceless without you having to invest anything. 

Give your wall a complete makeover with these quirky tips: 

CD covers

We are all about streaming music and casting videos now, making CDs a yesteryear product. However, old, some of the CDs, yes, you can admit that you bought them because they had a beautiful cover. It was later that you fell in love with the songs. Why not turn these beautiful covers into an art?

Pick some colourful covers and create a collage. Use wooden framing to turn this collage into a wall hanging, an art piece that would be loved by the many music lovers.

Stamps or postcards

Many of our parents had the hobby of collecting stamps and postcards from around the world. Colourful and interesting, these stamps and postcards can be a piece of art, too. Use them to transform your otherwise drab walls.

Handkerchiefs

Bright, colourful and patterned handkerchiefs can be an interesting option, too. Use them in small frames and place them in a collage form on the walls. Make sure you use them on the wall you want to highlight the most in your room. This can make the otherwise pastel theme of your room come to life.

Old hand-written letters

Hand-written letters are a thing of yesteryear, but, remain close to our hearts still. Framing an old letter your best friend wrote to you, or a letter you received from your grandparents when you were a small child, could be a good way of keeping the memories alive. Also, the vintage look of the letter, a beautiful handwriting and the beautiful words written can do wonders to the overall décor.

Book covers

Many of us choose our books by their covers that attract our attention. Some quirky, some telling and some bright, these book covers can be a great way to deck up your walls. Make a collage of some interesting book covers and frame them to create a piece of art. Have some old or rare book covers? Try it now. 

Currency notes

Frequent travellers have a hobby of collecting currency notes just like some have a hobby of collecting postcards and stamps. These can also be used to adorn your walls. Just like you would do to book covers and stamps, frame these currency notes to create a wall art.

Old photos

What better way than to say it with pictures? Old pictures of your parents when they were young, photos of your childhood and now photos of your little ones put together can create a beautiful family tree frame. A mix of monochrome and coloured pictures can be pleasing to the eye.

A bonus…

Wallpapers

Although not from the closet of old memories, left out wallpaper can also be turned into an art by just framing it. Have a piece of wallpaper that was used to decorate the walls of your bedroom? Use this left out piece and get it framed to add beauty to the plain walls of your living room. You could also frame a variety of wallpapers to create a multi-colour scheme.