Real Estate Magazine vol 2 Issue 3

VOL - 2 ISSUE : 3 March 2014

RealEstate

A WOMAN CAN BUILD A MAN’S WORLD IN MORE WAYS THAN ONE!

Cover Story Page : 10

M a x i m u m

4 March 14 • Real Estate Maximum

Real Estate Maximum

March is known for two main

events – Holi and financial

year ending.

Most people who are above tax

slab have to finish certain tasks

like investments and insurance

else they lose the tax benefits.

Remember you cannot build your wealth without

planning for your taxes. So take some time out and

plan for your future while you save your tax today.

India has been developing at a steady pace.

Here I am not talking about economic growth,

but development in the true sense. A sign

of development is bringing women in the

mainstream work. March 8th is Woman’s Day

and to commemorate the event, our cover story

is on a lady builder who has a debut scheme in

Prahladnagar. This shows that India is not only

building wealth, but is also fast becoming a

developed country.

There is a month left for National elections to start.

All eyes are on Gujarat as the most probable PM

candidate is from this state. The hotel rooms have

already started showing increase in occupancy.

I am sure that in case the predictions come true,

then Gujarat real estate is going to be really busy.

Happy maximising wealth!

Wish you a Happy Holi!

Manan Choksi

email : [email protected]

website : www.mgchoksi.com

Honorary Editor : Manan Choksi

Published by : Madhuvan Space Management Pvt. Ltd.

Circulation Incharge : Tanmay Mehta +91 79 71727100Volume : 2Issue : 2

Regd. Off. : G5, Block A, Safal Profitaire, Corporate Road, Prahladnagar, Ahmedabad -15 www.realestatemaximum.com [email protected]

Disclaimer: This magazine is for private circulation only. The data published in this magazine is based on the inputs provided by various sources. The publisher, printer and the Editor do not guarantee the authenticity of correctness of the data published herein.Printed and Published by MSMPL at Ahmedabad.

Designed By : Creative Grapes - +91 9913539147

GUJARAT: LAND OF OPPORTUNITIES ........ 05

CLASSIFIEDS: BUY - SELL - RENT. ................. 06

A WOMAN CAN BUILD A MAN’S WORLD IN

MORE WAYS THAN ONE! .................................. 08

RE/MAX UPDATES .................................. 14

INSURE YOUR HOUSE AGAINST CALAMITIES:

TIPS & CAUTIONS ............................................... 17

ANALYSIS OF VARIOUS TAX SAVING

INVESTMENTS. .................................................... 21

Editor’s NoteI N D E X

5March 14• Real Estate Maximum

Real Estate Maximum

GUJARAT: LAND OF OPPORTUNITIES

Gujarat has always been fulcrum of Trade

and Activity. From being a favoured port for

seafarers, the nucleus of Business and Industry, a

cradle for Culture and Religion, home of Mahatma

and abode of the Asiatic Lion, Gujarat has had it all.

Gujarat is the fastest growing state of the country. It

had a Growth rate of around 11% vis-à-vis country

growth of 7% in 2012. United Nations awarded

Gujarat the 2nd best state in Asia pacific category

for ‘Improving transparency, accountability and

responsiveness in public service’ in the year 2010.

ujarat is known as Water Mouth of India because of

its strategic location. Gujarat due to its connectivity

with ports and skilled labour has attracted

many multi-national companies to setup their

manufacturing plants. Indian Industrial houses

like TATA, Adani and Godrej- have entered Gujarat

many years back. An increase in the investments in

sectors such as Textiles, Chemicals and Agro & Food

processing over the last 20 years has made Gujarat

emerge as a thriving industrial centre in the Country.

Gujarat is also known for Entrepreneur Skills in the

Country. Latest Technology and Infrastructure

has motivated Family run businesses to turn into

modernized corporate businesses.

Moreover, diverse labour force and skill set have

attracted Automobile players like TATA Nano project,

Ford, Maruti and Peugeot in the western part of

Gujarat. Gujarat is considered to be upcoming Small

Car manufacturing Hub in the World.

Government Initiatives• The government has started vibrant Gujarat

program to attract more foreign investment.

• The stategovernmenthasexecutedBusRapid

Transport System (BRTS) project successfully for

the convenience of the local people.

• Largeno.ofSEZ’sarebeingsetupwithInvestor

friendly Policies.

• No.ofprivateportsarebeingsetupwhichwill

further boost business sentiment

• Sabarmati Riverfront Development to create

quality space for Commercial, Cultural and

recreational activities.

• WorldClassEducationalInstitutes

• HighQualityHealthcareInfrastructure

• Use of CNG as vehicular fuel for

pollution mitigation

• DevelopmentofNewTownshipsandTwincities

around existing ones.

• Gujarat International Finance Tech-city (GIFT)

– One stop destination for Global Financial

Services and IT Industry

Ecological Balance in State• In-spite of rapid industrialization the govt.

thrust to ecological balance remains high on

the priority list

• UndergroundWatertableinthestatehasgone

up over the years

• Morelandhasbeencoveredundercultivation

• Thegreencoverinthestatehasincreased

• Normsforemittingharmfulgaseshavebecome

stiffer

• Stringent laws put in place by govt. against

pollution

• Solarenergy-abigalternatesourceofenergyin

Gujarat

Gujarat has proved emphatically that whatever

it welcomes with open arms, it nurtures,

promotes and develops beyond expectations.

Anupam Tandon

HN Safal

[email protected]


CLASSIFIEDS: BUY - SELL - RENT

Apartment

Kasturi 3,

4 BHK

Sindhubhuvan road

Jigar Pandya9099115000RE/MAXCorporate Services

[email protected]

on rent

Residential AppartmentsDev AurumNewly Constructed,1934 sqft, 3 BHKPrahlad nagarJigar Pandya9099115000RE/MAXCorporate [email protected]

For sale

Flat for saleOpp. Super Plaza, ground floor

185 sq.yrd, 3 BHKSandesh press roadRs. 85 LakhsJigar Pandya9099115000RE/MAXCorporate [email protected]

For sale

Residential AppartmentsGodrej Garden CityNewly Constructed,1064 - 1729 sq ftOff SG Road, B/h Nirma Uni

Sandeep Sabnani9099031221Remax [email protected]

For sale

Luxurious Appartments612, AppartmentsNewly Constructed,2150 builtup sqft, 4 BHKPrahlad nagarJigar Pandya9099115000RE/MAXCorporate [email protected]

For sale

Plot For sell129 Weekend villaSwimming Pool, Club HouseRanchardaJigar Pandya9099115000RE/MAXCorporate [email protected]

For sale

Plot For Sale

Showroom on rent3300 sqft, Rs. 120 per sqft

Shopper plaza C.G. RoadNavarangpura

Jigar Pandya9099115000RE/MAXCorporate [email protected]

on rent

Shop on rent507 sq ft

Super plaza ground floor

Sandesh press road


on rent

Showroom on rent

2285 sqft,

C G Road

Navarangpura

Ankit J Patel9825333907

RE/MAX Metro

[email protected]

On rent

Office on Rent

2618 sqft, Fully Furnished

C G Road

Navarangpura

Chintan J Parikh7600010530

RE/MAX Metro

[email protected]

On rent

Bunglow on rent

Safal Vihaan

5 BHK

Prahlad nagar

Jigar Pandya9099115000

Corporate Services

[email protected]

On rent

Flat on rent

Kasturi niwas

3 BHK

Science city


Corporate Services

[email protected]

On rent

Bunglow on rent

Satyen crystal

B/h Rajpath club

Rent: 27000/-


Corporate Services

[email protected]

On rent

Flat on rent

Sun embark

4 BHK Sola road

Jigar Pandya

9099115000

Corporate Services

[email protected]

On rent

Office on rent/lease7th floor 25000 sqft, Corporate roadPrahladnagar


on rent


Being a lady in the world o f developers is not easy is a hackneyed thought. According to Ms. Deval Soparkar, an

enthusiastic mother, wife and a meticulous real estate developer, who fulfils all three roles with amazing grace, there

are many advantages to it. Read on about this lady who believes that honesty and transparency about the product is the key

to success. Interesting paradoxes are revealed in this talk between Ms. Deval Soparkar of Green Blossom fame of Meghmani

Group and Real Estate Maximum correspondent

Real Estate Maximum

A WOMAN CAN BUILD A MAN’S WORLD IN MORE WAYS THAN ONE!


1. Today you are a builder of repute in

Ahmedabad. We would like you to tell

us what prompted you to take up real

estate as a career?

Taking up real estate as a career was an

impromptu decision. We had a plot at Prahlad

Nagar at a very strategic location and we

wanted to construct Meghmani corporate

house there. When I looked at the calculation

I thought that if we don’t construct another

building we will be losing on the FSI which

we will be getting on that plot. After internal

discussion, we decided to put up a high end

residential apartment building. The decision

was taken when real estate in Ahmedabad

was booming all time high, and we thought

that it would be a good line to diversify into.

Obviously, I was more interested in doing

Meghmani’s corporate house because that

was the need of an our at that time but when I

started looking at Panchratna corporation as a

whole project thought that it’s a very good line

and this is what really prompted me to take this

as a serious career option.

I believe that a woman can always do

houses better. So, I started getting myself

involved seriously and so far it has been a

very enriching experience.

2. Who has been your guiding force

or role model?

When we started, we had no guiding force or

role model as it was not a planned decision

but there are a couple of people or groups

whom I really respect in Ahmedabad. I like

what Goyal does in terms of taking the

scalability and introducing new concepts

in residential buildings. I like Synthesis and

Bakeri Group for its transparency and the

design aspect. I like Shaan zaveri’s Schemes

for its maintainance and elevation.

3. What is your educational background?

I did Bachelors from KS School of Business

Management, Ahmedabad, and MBA from

Long Island University, New York, USA. I

believe that actual experience is the real

education for me.

4. In what ways do you think education

helped you in becoming a successful

builder?

Education does bring a lot of character in you.

You can understand and analyse the thing,

giving good product at the right place and

maximization of profit be it chemicals, be it

even your real estate development. I personally

believe that had I been a civil engineer or

architect it would have been an advantage but

nevertheless I believe that my understanding

about delivering the product at the right price

is the biggest help that education has given me.

5. Please share with us excerpts of your

success story. How many homes or sq.ft.

constructions have you built?

Panchratna Corporation has done two

projects. One is a corporate house for

Meghnani Group and the second is Green

Blossom which is a high end 4 BHK luxurious

apartment. Total square feet construction area

is 185,000 square feet.

6. How do you make a house into a home

when you construct a building?

I pay special attention to the details, such as

what kind of railing gathers more dust, disuse

of a particular stone for buildings as women in

high heels cannot walk comfortably on such

floors or what colour of kitchen platform or

bathroom sink would make cleaning easier or

the particular stone which would be good for

the parking area, and so on. Men look at the

finances and women at the practical details.

Being a woman is an advantage as you can

visualize certain things better. For example,

I prefer a square kitchen so that when you

have somebody else helping you out, then

you have some space. Regarding privacy we

have observed that having all bedrooms on

one side is preferred by most as one additional

door makes all the bedrooms secure. Service

elevator has been introduced so that drivers,

plumbers and other helps can use them and

the residents and their visitors can use diffrent

elevators.

7. In life attitude is of utmost importance.

What is your view on this?

I completely agree, I feel attitude is beyond

gender too. If being a woman restricts my

thoughts then I wouldn’t be able to deal with

workers, government officials and contractors.

I believe a woman can construct and market

houses better than anyone else. So, we need

more women to bring grace in this industry.

Also attitude determines your altitude.

You have to be very determined otherwise

people will start taking you lightly.

8. Can you tell us about the challenges you

faced when you took up real estate as a

business?

Initially people around me were surprised

and more conscious. Incidents like labourers

drinking and coming to the site gets minimised

when a lady is there.

We tied up with an NGO and started a school

for the laboure’s kids when the construction

work was going on. So, kids from three to

twelve years were coming and learning there.

We also would get them items like toothbrush,

toothpaste, comb, undergarments and so on.

The school was almost our play area; like a

Real Estate Maximum


daycare. The teacher used to come from 9:00 to

11:30 in the morning. from 11:30 to 5:00 there

was free play with books, toys and games. We tied

up with Savera who run schools at construction

sites.

We started off with about 11 kids and then went

to 45 and then on average we got 30 kids from all

sites; it was a good experience. The children were

very happy. I don’t have challenges probably as I

have selected a good team to work with.

9. There are few women in the world of

real estate. Please share with us the

challenges that you face owing to your

being a woman.

I have seen women in the marketing side,

architects and interior designers but I have not

seen a woman developer.

A developer has a much larger role to play from

getting architects and all the contractors on the

board, managing labourers, finances and also

the market. Being the first woman builder or

being among the very few you get lot of special

treatment wherever you go. You get special

attention. I am very happy that Industry has

accepted me and my company and in case of

problems, although we are competitors, others

have come forward and helped.

I have got help from Synthesis, Deep builders,

Ganesh housing and Vivan group. All these

people have come forward, stood by me at the

opening time when I was apprehensive to show

my work.

I think being a woman is actually a good thing.

You can convert a house into a home. So I don’t

think it’s a challenge.

10. Tell us something about your group.

Our Panchratna corporation is a real estate

venture in which I am also a partner. And this is

altogether a new line of business for us. And as I

said in the first project we need two things one

is a commercial space and one is the residential

that we created. Going forward we have land

banks available in strategic locations in and

around Ahmedabad. I don’t want to rush in for

my second project right after the first one for

the simple reason that for eighteen months, I

have the maintenance of Green Blossom on my

shoulder. I don’t want to rush into the other

scheme, pay attention there and ignore the

scheme that is already here. Since it’s the first

scheme you have no experience about how the

maintenance will go and that maintenance cycle

will go on for about 18 months. So I don’t want

to divert my attention and resources. But we will

be doing two more projects and we’ve already

identified the projects, which will be announced

in the next eight or nine months.

11. Real estate is going through turmoil now

with plenty of ups and downs. How do

you as a real estate builder deal with the

changing situations?

I always believe that if you have a right product

at the right price then you can sell. The location

of the project is very important. Second is that

we have never compromised on the quality

aspect of it. I always visualize that if I have to

stay myself what will I do for this? So which

kind of a marble I’ll put, which kind of amenities

I’ll use what kind of air conditioning I will use,

what kind of kitchen design and the modular

kitchen type I want? We always want the best

for ourselves and this helps us to put ourselves

in our customer’s shoes and think like them.I

think the market also appreciates a good

product at good price.

12. What are your hobbies and interests?

I like to travel, read, music and workout.

I tell all fitness freaks to buy here because the

gym will always be the best at Green Blossom

as I will be using it myself.

13. Holidays and vacations have become

very important to get away from the

daily stress. What kind of holidays do

you like to take? Also share with us

about your last holiday homes.

When you work seven days a week you need

more vacations or holidays. However small

a vacation, you need it because they are very

important. And that gives me a chance to be

a full time wife and mom. So, we try to fit in a

small trip to somewhere like Goa to refresh

ourselves. As I take such 8-9 short breaks I

prefer to go to places where there is a direct

flight like Dubai.

14. What is your advice to new beginners in

the field of real estate?

I am a beginner myself so I cannot give

advice to anyone but I believe that

one should be honest and transparent.

I always believe when you are selling someone

a house it’s a huge emotional investment

Real Estate Maximum

Ms. Deval Soparkar at Green Blossom Site


Real Estate Maximum

people are making. I am very clear that

whatever I write in my specification I

will deliver. Whenever people say why

you’re not giving swimming pool or raise

such issues, I respond that I want to give

you the amenities that members can

maintain for a long time. If space is there

then I would rather give extra parking to

the members, because that is what the

need of the hour is.

15. Please share your views for owning

property for vacation home out of India

or different part of India.

I would never own anything in a vacation place

only for staying there during holidays. For Goa if

I am looking at a property which is accessible or

closer to beach and is a 2 bedroom unit, I would

be paying about 60 - 70 lakhs for that. And if

I invest that 60 - 70 lakhs @ interest at 10%,

would be 7 lakhs. For 7 lakhs I could probably

go and stay for a month in Goa in the best of

properties. Why should I take the headache of

maintaining a property?

I don’t want a vacation home anywhere in India.

If it is my house I have to take care of it even

during a holiday. Plus why stick to one place for

a vacation? If I want to go to Sri Lanka and not

to Goa, I can take the flight and reach in three to

four hours or so. Dubai just takes two and a half

hours so I can go there easily. So, why should I

limit myself to going to one place only?

A farmhouse in Ahmedabad for a weekend

getaway is alright with me as I can simply go

there when I need a change.

16. What do you feel is the future

of real estate in India?

Real estate has a fantastic future in India!

People would like to upgrade to a better thing

because the disposable income is going up.

Another shift that I have seen in real estate is

that people are now thinking that either your

office or your kid’s school should be near to

your house. So I have seen maximum people

shifting to Prahlad Nagar. In our scheme I

have 60% of the people who are from Prahlad

Nagar area. So either they all set their offices

nearby or their kid’s school. That’s why I believe

location is very important. In the last five, six

years developers have really done a good job in

constructing good buildings, good amenities,

and good maintenance; the foyer where you

enter is also well designed. People are also

conscious about it because now they are

staying in communities in four BHK luxurious

apartments whereas earlier they were in

bungalows. So they want open space, they

want garden, they want kids area, they want sit

out area, they want plantation area. It is a B2C

industry so if three customers come and tell me

that this is what I am missing at Green Blossom

probably in the next scheme, we would like

to incorporate that. A direct feedback from

customer is very helpful for us.

Fantastic buildings have come up in Prahlad

Nagar in the last few years; builders have

used the best of materials and provide good

maintenance even afterwards. So I think real

estate has a good future.

We have a long way to go

and we should see and learn

from buildings in Hong Kong,

Singapore and Gurgaon as

they are much better than

Ahmedabad. So if as long as there

is land, money in the bank and

population booming, real estate

has a good future.


ADVT

ARVIND INFRASTRUCTURE A BUDDING REAL ESTATE DEVELOPERS IN AHMEDABAD AND BANGLAORE INVITES BROKER OWNERS OF RE/MAX MGM TO DISCUSS ITS VARIOUS UPCOMING PROJECTS AND TIE-UP WITH RE/MAX MGM. MR. AASHIL PATEL REGIONAL OWNER AND MR. PRANAV PANDYA , FRANCHISE

DEVELOPMENT MANGER WITH ALL BROKER OWNERS OF AHMEDABAD ATTENDED THE SAME AND GOT THE DETAILS OF PROJECTS BEING DEVELOPED BY ARVIND INFRASTRUCTURE.

RE/MAX GUJARAT LISTING HIT STATISTICS

THE BELOW STATISTIC OF GUJARAT REGION

SPEAKS A VOLUME. THE MORE LISTING, THE

MORE HITS RESULTING IN MORE DEALS. SO LIST

MORE PROPERTIES ON ICONNECT AND REACH TO

MORE CUSTOMERS.

GLOBAL.REMAX.COM NOW IN GUJARATI, HINDI AND OTHER LOCAL LANGUAGES

RE/MAX UPDATES


ADVT

REGIONAL OWNERS AT RE/MAX

INDIA DURING 5TH ANNIVERSARY

CELEBRATION AND REGIONAL

OWNERS’ REVIEW MEET WITH NEW

RE/MAX BRANDED

WINTER JACKET.

TEAM RE/MAX MGM ENJOYING 5TH YEAR CELEBRATION OF RE/MAX INDIA WITH PARUL CHAUDHARY ACCOMPANYING!

Do we need to pay service tax on under construction property? YES

How many current projects are there of HN safal group? 15

Iscon platinum project is located in which area? BOPAL

Green blossom apartment is having how many bedrooms? 4

Toyota Liva . Built on…. QDR

Name the company who have launched project 31IVY ? ORIENTAL

Nobody in the world sell more _______ then RE/MAX REALESTATE

ANSWERS OF LAST MONTH’S QUIZ COMPETITION

CONGRATULATIONS TO MR. VIVEK PARIKH LUCKY WINNER WHO WON I-POD SHUFFLE -

Seminar on Business Opportunities in Real Estate Brokerage

Topics to be covered• • •

Changing Trends in Real EstateBusiness Opportunity with RE/MAXHow to do Business Nationally & Globally with RE/MAX

Date:

Venue:

th12 April

Hotel Courtyard Marriot, Ramdev Nagar Cross Road, Ahmedabad.

For registration call: 8238097782 / 8238150244Log on: www.whatisremax.com


Real Estate Maximum

A home insurance policy is vital in the age we

are living in with sudden calamities happening

all around. Every day we hear reports of floods,

snowstorms, fire, earthquakes and cloud bursts.

Insurance will definitely help to protect the

structure of your house against these acts of

God.

But how does it help you?

In the case of a house owner:

In case of loss due to risks listed in the

document, the insurer will pay on the basis

of the house’s reconstruction cost. The re-

establishment value is calculated on the basis

of the built-up area and the construction cost,

generally fixed by the company.

The terms are therefore straight if the house is on

your own land. You just have to estimate the cost

of rebuilding ‘which should be the sum insured’

and the insurance company will pay accordingly

in case of loss.

In the case of an apartment owner:

If you own an apartment, the following questions

will arise in your mind.

As the policy covers the reconstruction cost,

how is the sum insured calculated for a single

apartment in a building? Can I buy insurance

for such a property at an individual level or

do I have to approach the insurer along with

other apartment owners? How will the insurer

compensate, since there will be more than one

claimant in case of damage to the building?

Generally, housing societies get the structure

of the building insured. This means you have to

insure only the contents of the house such as

jewellery, electronics and furniture. If the society

hasn’t insured the building, you have to buy a

cover individually.

The insurance plan for an apartment has the

same underwriting principles and sets of

inclusions and exclusions as a policy for an

independent house, irrespective of the floor of

the apartment.

The insurance is done considering the built-

up area and the cost of reconstruction. If the

society’s insurance is inadequate, buy an

individual policy as a top-up cover.

The society not having any insurance or having

inadequate cover will in no way prejudice the

claims of an individual flat owner.

You cannot buy a cover for an individual

apartment in the course of its construction since

it is part of the entire building structure. While a

building is under construction, it should ideally

be covered under a project insurance policy

taken by the builder.

This would be in place until the construction is

completed as per the approved plan. After the

completion of the project, either individual flat

owners or all of them together, as a society, can

buy the insurance cover.

In case it is a private bungalow or an

independent house which the customer himself

or a builder is constructing, then the owner

can take a cover for the same and change it

to a regular home insurance cover after the

completion of construction.

An insurer can reject your claim if any

commercial activity is being carried out from

your house. But if the flat is covered under a

common policy taken by the society as a whole

and if the neighbor violates the policy terms it

does not lead to the rejection of your claim.

INSURE YOUR HOUSE AGAINST CALAMITIES: TIPS & CAUTIONS

- Pranav Pandya


Real Estate Maximum

Even if the insurance has been taken through

an association, each flat owner gets a separate

cover. An insurance contract is concluded based

on declaration by a proposer wherein occupancy

is also declared. So, if your declared occupancy

has not changed, for example from residence

to a shop, the policy will continue and the claim

will not be affected even if your neighbour has

breached the contract.

The only difference between buying a cover for

an independent house and an apartment relates

to common areas such as compound walls,

staircase, etc.

The whole apartment, including the

common area, can be insured only by

the residents’ association on behalf of

all flat owners. In such a case, a copy of

the policy is given to each flat owner

with details of the sum insured for

individual flats. If an owner feels the

sum is insufficient, it can be increased

through the association only,

If a single apartment in a building

has been insured the cost of

reconstruction of the apartment is

payable to the apartment owner up

to the sum insured. However, if the

association takes up reconstruction,

the amount will be paid to the association only.

By and large, the covers and premium rates with

various insurers are the same. Therefore, buying

home insurance is not very difficult.

Few things you should keep in mind while

buying a Home insurance Policy:

1. Since sum insured is the basis of

compensation, it is important that it reflects

the correct property value. Most people

make the mistake of choosing the sum

insured equal to the market value of the

house. However, the company pays on a

reinstatement basis, which keeps fluctuating

with construction costs. On an average, one

can take a 10-15% increase in the cost of

construction (this differs from city to city)

every year. One can check construction

rates from the municipal corporation or

real estate websites. However, arriving at an

exact figure is difficult. A customer can also

opt for an escalation clause for increasing

the sum insured every year. “The escalation

can be up to 25% of the sum insured.

2. You can either go for an annual cover or

choose a multi-year policy. While the annual

policy will give you the option to revisit the

sum insured’s adequacy every year, a long-

term policy offers discounts which can be as

high as 50%, depending on the tenure.

3. Though most products look alike, the quality

of service may differ. So, it will be wise to

check the claim settlement record of the

insurer. A customer-friendly approach to

reporting and handling of claims will be of

immense help in the event of a loss.

4. While most people choose the best of

appliances for their home, there is a

perceptible apathy towards home insurance,

with very few understanding the need to

buy it. You have installed sophisticated

locks, electronic alarms, fire extinguishers,

carried out a thorough police verification

of the domestic help and done your best

to protect your dwelling. However, we all

know that despite the best security and fire

protection measures, the risk of thefts and

damages due to fire can never be completely

eliminated. Also, the recurrent earthquakes

and tsunami in Japan are good reminders of

how vulnerable and exposed our houses are

to natural calamities.

5. Compared with the

measures taken by you to protect your

haven, a home insurance policy would

prove to be a much more concrete

step in covering such risks. Sadly,

apart from a steady demand from the

high networth individuals living in

expensive homes where the risks are

bigger, the factor that is driving the

sales of home insurance products is it

being bundled along with home loans.

The cost of securing your home and

its contents is as low as Rs20 per day

for a sum assured of Rs35 lakh. But this

policy will play a vital role to make good your

financial losses in case a disaster strikes. Yet,

unfortunately, home insurance policies are

the least priority for most and is hardly ever

a part of one’s financial planning.

The sum assured for a standard home insurance

policy which covers your house against

perils such as thefts, floods, fire, earthquakes,

malicious damage, etc., has two basic parts. The

first part covers the structure while the second

part is to insure its content. Keep in mind that

insurance policies cover your home for its


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reconstruction cost and not for its market value.

The reinstatement value is calculated on the

basis of the built-up area and the construction

rate decided by your insurer. For example, if the

built-up area of your home is 1,500 sq. ft and the

construction rate determined by the insurer is Rs

1,500 per sq. ft, the sum insured for your home

structure will be Rs22,50,000.

The idea is to get a cover which will be

sufficient to rebuild your house in case any

harm comes to the structure.

Another important factor on which the re-

establishment value depends is where the

property is located. Premium rates are standard.

However, the actual sum assured may differ

from location to location due to difference in the

cost of construction. Those who do not own the

property need

not protect the

structure, but

must consider

the content’s

cover.

Therefore, if you

live in a seismic or

flood prone zone you might have to pay a higher

premium to get the property insured.

Moreover, if you have a basement floor, it might

be difficult for you to get an insurer to cover it.

Sometimes insurers are not willing to include

basements in the purview of the policy as the

degree of risk in insuring a basement is much

higher. Also, the maximum cover amount will

differ from one company to the other.

However, ‘depreciation’ is the word to look out

for in this section. “The cost of replacing the lost

item will be settled after deducting appropriate

depreciation on the basis of the age of the item.

There are sub-limits to the claim one can make

in various sections of the home contents cover

segment, though they differ from one insurer to

the other. Jewellery is one item which generally

has a sub-limit of approximately 10% of the total

asset cover.” So, if your total content cover is for

Rs 1,00,000, in all you can claim is Rs 10,000 for

loss of jewellery.

To ensure that you have enough for paying

rent in case of total loss, opt for an alternate

accommodation cover.

The exclusion list for this segment is pretty

extensive as well.

Important items like cash, stocks or bonds,

antique items, collections and other property

documents are never insured by any insurance

company. Also, do not expect to get the claim

payment in case the damage or loss is caused

by your domestic help. None of the companies

cover losses where the insured’s domestic staff

is involved, directly or indirectly. Moreover, if you

are working out of your home, the policy won’t

cover the section being used for commercial

purposes and you would need a merchant’s

policy to insure it.

Buying a basic home insurance policy ensures

that the building and its contents are protected.

However, if you read the policy wordings

carefully, you might feel a need to extend

the scope of coverage beyond the standard

protection it gives and fill up the gaps.

The insurance company has fixed the

construction rates according to the location

of your property. However, do not forget to

revise this value appropriately in case expensive

materials like marble or flooring, wooden work,

etc., have been used in your home. This will also

apply when you do some renovation after you

have bought the policy.

“Most of the insurers provide an optional cover

for an alternate accommodation cover for a

limited period, which is usually restricted to

30 days.” Some policies also offer riders like the

architect’s fee, cost of removing debris, public

liability, personal accident, terrorism attacks,

etc., by paying some additional premium. Select

these covers only if you need them.

The best way to compare and shop for a home

insurance cover is to ascertain the types and

amounts of coverage you want and then see

what different insurers have to offer. This will

help you do an

apple-to-apple

c o m p a r i s o n

of the price

quotes. Opting

for a long-term

policy of, say, 10

years not only

saves you from the hassle of renewing the policy

again and again but can get you a discount

on the premium, sometimes as high as 50%.

“Ideally, one can go for a long-tenure cover and

avail of discounts. Do ensure that you get your

sum insured increased if the valuation of your

property, based on construction rate, increases.

Else, it will become highly inappropriate to be at

a lower cover,”

“Also, home insurance policies cease to exist

when the premises are left unoccupied for more

than a specified time period (usually 30 to 60

days). One should choose a plan which offers

maximum protection,” he adds.

WHAT’S COVERED

Fire, burglary and theft

Riot, strike and malicious damage

Explosion and implosion

Earthquake, flood, lightning, landslides, etc.

Missile testing operation and aircraft damage

Bursting or overflowing water tanks, apparatus

and pipes, leakage from sprinklers

WHAT’S NOT COVERED

Loss or damage by the insured or his employee

Cash, cards, stock or other documents

Painting, works of art and antiques

Loss or damage to any illegally acquired property

Loss or damage occurring when the home remains

unoccupied, for a long period (usually 30 days)

Section of the house used for commercial purposes

Needs of property are more than oneBut trustable name is only one.

Block A, G-5 Safal Proftaire,Corporate Road, Prahladnagar,

Ahmedabad - 380 015

Call : 1800 121 7100www.remax.in/guj_rcs

E : [email protected]


The financial year is coming to an end and

so must determine where to invest so as to

get optimum return and tax benefits. Even

though the primary objective is to save taxes

you also want that your investments earn

good returns. This article is an attempt to

analyze the various tax saving investments

available and the annual returns that it earns.

1. EPFEmployee provident fund (EPF) is the most

common tax saving investment. Most of the

employeescontribute to EPF. EPF investment

is eligible for deduction up to Rs.1 lakh.

Return on investment: 8.75% p.a.

Point to remember: You should note

down the yearly contribution to your EPF

account so that you know how much more

is to be invested for claiming the Rs.1 lakh

exemption under section 80C.

2. PPFYou can invest up to Rs.1 lakh in Public

provident fund (PPF) and the entire amount

can be claimed as deduction under section

80C. Even the interest received and the

maturity amount are totally exempt from

tax. Tenure of PPF investment is 15 years.


Point to remember: PPF interest is

calculated by 5th of every month. So, if you

want to receive interest for the entire month,

invest before that date.

3. NSCInvestment in National Savings Certificate

(NSC) is also tax deductible under

section 80C subject to the maximum

limit of Rs.1 lakh. The tenure of NSC is

- CA Rahil Mehta, Choksi Tax Services

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ANALYSIS OF VARIOUS TAX SAVING

INVESTMENTS


5 year or 10 year and you can invest in

either of the two.


for 5 year investment & 8.8% p.a. for

10 years investment.

Point to remember: The entire interest

on NSC is received on maturity, but

the yearly interest has to be declared

every year in your income tax returns

and tax has to be paid on it. Carefully

evaluate the lock-in period and the

taxabilitybefore opting for investment

in NSC

4. RGESSRGESS (Rajiv Gandhi Equity Savings

Scheme) is the latest tax saving option.

It offers tax saving over and above

80C limit. This investment is available

only to first time equity investors

having income up to Rs.12 lakh p.a.

The maximum that can be investedis

Rs.50,000 and the tax deduction is up

to Rs.25,000.

Return on investment: 10-12% p.a.

Point to remember: RGESS is not so

easy to understand as the fixed deposit.

For first time investors, it is advisable

to invest in simpleschemes rather than

investing in theequity market.

5. NPSNew pension system is considered one

of the cheapest retirement products.

The tax benefits on NPS are – 1) Own

contribution under 80CCD (1) up to Rs.1

lakh p.a. and 2) Employer contribution

under 80CCD (2) with no upper limit.


Point to remember: Those who are

already investing in EPF should not

consider investing in NPS if it is just

for tax saving. Also note that it has an

equity investment limit of 50%.

6. Fixed depositsFixed deposits (FD’s) with investment

tenure of 5 years of more are eligible

for tax deduction under section 80C.

It is preferred my many as it is simple

to understand and is hassle free for

investment.

Return on investment: 8.5-9.5% p.a.

Point to remember: To avail tax benefit

on FD investmentthere is a lock-in

period of 5 years. So you must evaluate

your decision carefully before investing

as your interest rate remains fixed for

the entire tenure and you cannot take

the benefit of if interest rates increase

later on.

7. ELSSEquity Linked Savings Scheme are also

deductible under the 80C limit. There

is a lock-in period of 3 years and you

cannot withdraw your money earlier.

These are diversified equity mutual

funds which also offer tax benefits.


Point to remember: It is better to

avoid investing in ELSS if you don’t have

knowledge about investment in mutual

funds. Investing in ELSS without proper

research can even erode your capital.

8. SCSSSenior citizens savings scheme is also

a part of section 80C. It is available to

senior citizens i.e. citizens above 60 years.

This post office product has a maturity

period of 5 years which can be further

extended by 3 years after maturity.

Return on investment: 9% p.a.

Point to remember: You cannot

withdraw from SCSS before 5 years and

the only option is premature closure of

the account after 3 years.

9. InsuranceLife insurance and health insurance

offer tax benefits under section 80C

and section 80D respectively. The

premium amount of all life insurance

policies can be claimed under 80C while

premium paid for health insurance is to

be claimed under 80D.The maximum

deduction for Health Insurance

premiumis Rs.15,000 p.a. for citizen

below 60 years and Rs.20,000 for senior

citizen. Premium for health insurance of

your parents can be claimed over and

above this limit.


Point to remember:For claiming tax

benefit under insurance there is a

condition that the premium amount

should not exceed 10% of the sum

assured to be eligible for this deduction.

Avoid investing in life insurance policies

which mix insurance and investment

as the higher charges and other

restrictions will result in lower returns

on investment.

Conclusion

These various tax saving instruments

are available.But before choosing

amongst them, remember that these

are also long term investments and so

should optimize your tax saving and

return on investment.

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Real Estate Magazine vol 2 Issue 3

Real Estate

Transcript of Real Estate Magazine vol 2 Issue 3