Ramesh Prabhu explained the law, procedures and incentives for obtaining conveyance
To avoid major problems later, or to avoid problems like those faced by Campa Cola compound residents, all members of cooperative housing society (CHS) need to first resolve the issue of becoming the legal titleholder of the land through a conveyance deed or deemed conveyance. Otherwise, “when things go wrong, like in the case of the collapsed Laxmi Chhaya building from Mumbai, it poses a serious risk to your most valuable asset and probably your biggest investment,” said Ramesh Prabhu. He was speaking at a seminar on “Deemed Conveyance – Law, procedure and incentives to meet the 31st Dec deadline” organised by Moneylife Foundation in Mumbai.
Mr Prabhu is a chartered accountant (CA) by profession and an expert on various laws and issues concerning CHS.
Many housing societies are keen to go for redevelopment but they cannot go ahead for want of conveyance. Indeed, nearly 85% of CHS in Maharashtra have not obtained conveyance or deemed conveyance from their builders or landowners. However, there are ways out. “One can use innovative methods like procuring information under the Right to Information (RTI) Act to obtain all the documents from several departments,” pointed out Mr Prabhu.
“In case of the developer or builder or landowners (together promoters) are not willing to, or ready to, sign the conveyance deed, then as per the law, the district deputy registrar (DDR) as the competent authority signs it as promoter/s. In addition, even if there is a court case pending, the DDR, as a statutory authority, can give the deemed conveyance in favour of the CHS,” he added.
One of the issues raised in deemed conveyance applications is that there are two or more buildings on adjacent plots owned or developed by the builder.
Mr Prabhu said, “There are several judgements by the court that permit two or more CHS on a single plot of land to go for deemed conveyance separately. Even condos can be given deemed conveyance.”
Towards the end of the session, Mr Prabhu mentioned some case laws where the completion certificate/ occupation certificate is not required for deemed conveyance, even if a case is pending in a consumer court. Deemed conveyance is possible even if there is balance FSI (floor space index) and disputes have been raised about open space between the two buildings and the FSI thereupon.
When the developer and landowners (promoters) are ready to sign the deed, the CHS can opt for the conveyance deed. In case the promoters are either not ready, or not available, the CHS can opt for unilateral or deemed conveyance.
At Moneylife Foundation’s post-Budget analysis, Ameet Patel dissected the tax changes and Debashis Basu spoke on the outlook for investors
This year also Moneylife Foundation organised a discussion on the Union Budget and what it means for savers and investors. Ameet Patel, a chartered accountant and partner at Sudit K Parekh & Co, spoke about changes in taxation and innovations (or the lack of them) while Debashis Basu, Moneylife Foundation’s founder trustee, spoke on how the Budget would affect our investment options.
Mr Patel began by listing some expectations that Indians had from this Budget, especially on the tax front. He gave a thumbs-down to the Budget on account of a change in the calculation of dividend distribution tax (DDT, which may result in lower dividend payout) and because the surcharge and education cess had not been removed.
He mentioned that among the good moves by the finance minister (FM) was the increase in the tax slabs for senior citizens. He added, “The rise in the income threshold for non senior citizens who pay no tax, would put more money in the pockets of taxpayers.” On the changes in taxation for debt funds, he said: “They might as well shut down the debt funds,” following the increase in long-term capital gains tax to 20% and increase in long-term tenure to 36 months. In sum, the biggest positives for taxpayers, according to Mr Patel, were:
1) Increase in the threshold limit for those who pay 0% tax;
2) Increase in the exemption limit under section 80C;
2) Increase in deduction for interest on housing loans for ‘self-occupied’ properties;
3) Proposed rollout of goods & services tax (GST); and
4) Move away from using retrospective tax legislation.
Mr Basu took the stage to speak on how the Budget is likely to affect future investments for savers. He began with the snapshot view of the how huge government expenditure and high interest cost on borrowing is a drag and asserted that the Budget did not deliver on the ‘minimum government’ promise. Not only was there no effort to cut expenditure but the FM was keen spend more, budgeting for a 19% increase in tax revenues backed by a big increase in income and service tax collections. The Budget has changed the tax treatment of non-equity funds; but readers of Moneylife would not be affected because Moneylife has never advocated non-equity funds like monthly income plans, capital protection schemes and hybrid multi-asset funds or even debt funds.
Mr Basu reiterated the Moneylife philosophy of ‘keep it simple’ and ‘less is more’, when it comes to investments. “With the change in tax treatment for non-equity funds, you will need to hold them for at least three years to get the indexation benefit. This would mean that you are taking a long-term interest rate call when investing in these products,” he said. Moneylife has frequently pointed out how difficult it is to predict interest rate movements for even experts. On equities, he said, “I would tend to favour only large-cap schemes and select mid-cap schemes. If you are buying stocks directly, invest in IT, pharma and consumer goods stocks because the rupee will not strengthen soon.” He ended his talk by saying that you could still “keep the faith; but you need to keep a watch” on the new government. The Budget does not generate too much of confidence that achche din will be here soon.