RERA.. .Ready to go

Real estate regulator act (RERA) is expected to be enforced from 1^st may 2017. It is expected to be a blessing for all future home seekers and also bring the real estate industry under control over huge unsold inventories and sky rocketing prices. This act is expected to reduce delay in project completion and increasing hooliganism in case of default. 

Some of the facts of the RERA are as follows: 

a)  Pay for only the area you can use- one of the misleading facts in every home purchase is the use of words like” super built up” or “ built up “ with 25-30% loading which wrongly includes the window/ balcony or loft  space I calculation. Going forward it is mandated to only mention the usable area where the space ca n be actually used by the buyer. The advertisement or agreement should contain the carpet area. It is rightfully known as carpet area as the place where you can lay down the flooring or carpet. The buyer needs to pay price on this area only.

b)   Creation of bank escrow accounts – usually the builders have had a tendency of starting multiple projects at one go and collecting funds from home buyers showing them futuristic images. Going forward, to avoid pumping of funds from one project to another, an escrow account has been mandated to all. At any given point of time, the builders can only withdraw 70% of available funds of home buyers after required approvals from their engineers and chartered accountants. 

c)   Payment schedule – the buyers are expected to pay only 10% of amount before the signing of agreement. Also, the buyer is entitled to see all the layout plans, copy of entire sanctioned plans and the schedule of completion. The maximum period of project completion is currently 7 years. The buyer is entitled to get possession within 2 months of getting the Occupation certificate.  The onus of getting the OC is with the promoter. The promoter is also responsible for creating a society and is responsible for complete maintenance till then. There is also a five year warranty of structural defect in the interest of buyers but it has not been clearly defined in the law. The promoter cannot make any change in the layout plan without seeking approval of 2/3^rd buyers. Also, the promoter can’t transfer the project to any other developer without again seeking permission by 2/3^rd of allotees.

d)  Registration of projects- the developers need to register their projects with the regulators before making any public announcement of the project. The permission is necessary for any construction beyond eight floors. Also, it is necessary to submit details about the past performances of projection completion, any impending cases against the builders and copies of necessary sanctions from the land department. Also, the registration seeks details of complete layout including the latitudes and longitude details. The total number of flats to be created and commitment of creating the mandated escrow accounts for the said projects. The registration would include the deadline to complete the project. 

e) Audited papers for the projects – the promoter are responsible for submitted audited project accounts to the RERA every 6 months for approval. If the project is expected to be completed in phases then each phase is considered as an individual project and separate registration is necessary for all phases. There is also mandated updating the webpage to mention the quarterly progress of the project. The brochure created should include the details of the webpage. The builder would have to abide by all the details mentioned in the brochure. An tribunal Appellate is expected to be created in each state to hear the queries of the aggrieved parties. The role of RERA is to protect the interest of home buyers but in case of delayed payments by the buyer, he could also be liable for penalties or punishments.

Our word of caution

The provisions for ongoing projects are that the builders only require submitting the time frame from now on to complete the project. Also, the latest layout and other details of status of project would be visited as on date ignoring all the previous delays and structural changes. So, it is not much beneficial for the already invested new home buyer. Also, the RERA is a central rule; the State government has additional right to amend the rule any further. So if you are on the one, who has been stuck with delayed possession of your dream home, your wait has just got legitimatized and not over. 

     

Thanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com

Get Set Go... To File Your Taxes

Another financial year has just got over and it is now time to pay your dues to the government for all your earnings and fulfill your duties as an honest taxpayer. Be prepared with the given checklist to submit your e-filing by your own or even if you have someone to file your taxes, the list would be handy for all. Read the list and pass it on to your family, friends and colleagues. Don’t delay the process of filing taxes. Also don’t shy away and delay to collect the required documents.

The checklist of documents required to e-file your returns:

1. PAN CARD- Your identity for Income Tax authority is protected by the unique identification number provided in the PAN Card. It is necessary to use that number to file your returns. Also, if you are filing your own returns, the Pan Card number acts as your user name for login.
2. Form 16- It is applicable only to salaried people. It is a statement showing the details of TDS deducted by employer. It also shows the various deductions, exemptions and other calculations made by the employers.
3. Form 26AS – it gives information about the tax deducted and deposited against your PAN identity by your deductors. The same shows a summary of total tax paid under your PAN in the last financial year. It can be downloaded from IT website. Also, major banks provide a link to FOR 26AS.
4. Savings Bank Statements – the same is necessary to calculate the total income derived from your savings interest and Fixed Deposit interest income. The savings interest across all your accounts is claimable as deduction up to Rs 10000/- under Sec 80TTA. It is necessary to give details of all your savings accounts even if there are no transactions in the same. If you miss out on any of the account it can amount to tax evasion.
5. Property Details – if during the previous year, there has been any property dealing – you have to mention the same. Also in case of sale of property if there has been any profit on sale of property, it is necessary to calculate short or long term capital gains.
6. Home loan proofs – in case if you have any home in the last financial year, it is necessary to get the necessary interest certificate and principal repayment statement from the lending body. The principal repayment can get you benefit under Sec 80C and interest paid can be claimed under Sec 24 of Income Tax Act.
7. Investment proofs – keep ready all investment proofs ready as mentioned in Form 16 issued by employer and if otherwise, additionally invested under Chapter VI A. the list could include something like below:
   1. Life insurance premiums receipts
   2. Health insurance receipts paid for self, family, and parents
   3. ELSS (Mutual Fund) investments made
   4. Contributions to PPF/EPF
   5. Premiums paid for any annuity plans
   6. Receipt for school fees paid for children
   7. Bank statement for the principal of any home loan taken
   8. NSC bonds
   9. Tax saving bank FD or similar deposits receipts.
   10. Contribution to pension account and NPS
   11. Donations allowable under Sec 80G
   12. House Rent paid for amount beyond HRA received from the employer.
8. Business professional earnings – if you are a professional or any freelancer or running a proprietorship firm then it is necessary to collect the necessary proofs of your income receipts like bills – credits etc. Also, make a profit and loss adding to it all the office running expenses, utilities bills and even your travelling allowances.
9. Advance tax challans – keep handy all details regarding the payment of any advance tax or self assessment tax to be mentioned in the form.

Once, you have set across the required papers in place it is possible to simplify the process of filing your tax returns online.

Your tax Slabs For individual & HUFs

 

Thanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com

Your Personal Financial Role..

Before you Leave...

An individual decides to leave his home country and go abroad, for a better future for his family, better work and career opportunities or even to gain better exposure to facilities to exploit one’s skills. It can be simply aimed at higher earnings in a better currency. If you are also thinking to do so in near future, there are a few financial nitty-gritty’s you must take care before you fly away.

Change your bank accounts:

Before you pack your bags, it is mandatory to convert your resident bank accounts to non-resident ones. A Non Resident Indian (NRI) has three options-non-resident (ordinary) account (NRO), non-resident (external) rupee account (NRE) and foreign currency non-resident account (FCNR). Read more about these accounts in our blog link at http://saarthifp.com/blogs/index.php/faqs-about-nri-non-resident-indian-accounts/

 

Update your KYC details:

It is preferred that after changing the status of the bank account to update your know-your customer (KYC) details in all your share, mutual fund and insurance accounts.KYC compliance is a must to continue investing, buying insurance and opening/maintaining bank accounts.

Arrange Power of Attorney (PoA) to a person you trust:

It is also advised to provide somebody legal authority to make decisions in your absence. It can be related to your legal, financial or any other work in your home country.

This authority or PoA, as it is rightfully called can be of two types-special power of attorney, for a specific task, and general power of attorney, which authorises its holder to do all that is necessary (simply put it just act like you).

Open a Portfolio Investment Scheme:

If you intend to continue investing in Indian shares even after settling abroad, the only way you can to do so is by opening a portfolio investment scheme (PIS) account with a bank. You can have only one PIS account. There are various limitations on the NRI investors on share trading which would be made available by the broker.  Every PIS transaction is monitored/reported by/to the RBI.

Clear loans and other outstanding bills

If you are leaving behind assets like real estate in India, please ensure that you give ECS mandates to pay off the electricity, gas bills. Also, if there is loan component on the property, EMI should also be rerouted on this way.

Don’t forget to add your premiums for life policies or mutual fund systematic investment instructions. Please make special note especially to transfer these instructions to your non residential accounts.

Insurance Policies

It is better to surender your general insurance polices like your motor and health insurance and buy a fresh one in your new country of residence. It is advised to continue your existing life cover till you get a fresh one from the local insuring company in your new residence. Please ensure you verify that your insurer covers the life term in your new country of residence.

NRIs are not allowed to invest in small saving schemes like Public Provident Fund and National Savings Certificate but they can hold them till maturity. Even the banking products like Fixed Deposits are required to be closed on maturity. You can book a new FD at varied NRI rates.

Taxation clarification 

Even if an individual moves to another country, he is liable to pay tax on any income that is generated in India. India has signed treaty of Double Taxation avoidance Treaty with approximately 84 countries. This means the individual doesn’t have to pay taxes twice. The non resident benefits from lower TDS rate, exemption limits and tax credits. For example, if an individual submits proof of his residency in a particular country with which India has signed a DTAA then the income generated in India will be taxed at the rate mentioned in the treaty.

Beyond this there are many small things you should ensure that you deal with like bank lockers closure – if you are going to come back for few years or you have not assigned anyone in India to operate it. Also, take of all your physical documents, secure your will or list out your assets in nomination for any untold event. Be prepared with a minimal fund to survive in case of unplanned comeback. Plan these things in as detail as you have planned your journey. Be relaxed on your home front responsibilities and enjoy your life at a new place.

Thanks and Regards
Team
Saarthi Financial Planners
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Email: saarthifp@gmail.com