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Lodha Group is one of the supreme real estate developers in India which was established in the year 1980 in Mumbai, India. Lodha Group lies among the top real estate companies of India which is particularly famous for its high-class residential and commercial projects. Most of the properties of Lodha Group are located in and around Mumbai in the Indian state of Maharashtra. The Group also has its presence in Hyderabad and Pune and is expanding to Bangalore as well. Internationally Lodha Group is present in the United Kingdom. Its presence in London makes it particularly very famous in India and the company’s growth is simply worth noticing in the recent times.
About Lodha Group
Lodha Group was founded by Mangal Prabhat Lodha in the year 1980. Mangal Prabhat Lodha was born on the 18th of December 1955 was a famous India politician and vice – president of the Bhartiya Janata Party (BJP) in Maharashtra came to establish this company in the year 1980. Abhishek Lodha, the son Mangal Prabhat Lodha is in charge of the development of the company in Mumbai. Lodha Group is one of the best real estate developers in India and is among the top select multinational real estate developers in the world with its presence internationally in London. Currently, there are 28 ongoing projects in London and within a span of few years of time, it might achieve new heights. The company is one of the most profitable real estate developers in India and has the record of being the largest by sales for consecutive three years in a row. Presently, Lodha Group is developing an area of around 43 million square feet of prime real estate.
Types of Property of Lodha Group
Residential and commercial properties are the two types of Lodha Group properties in Mumbai. The residential properties include world class housing facilities such as apartments and townships with all the luxurious facilities that one can dream off. The commercial properties include the premium spaces of various corporate giants and signature offices for the different multinational companies. In London, Lodha Group is only dealing with residential properties at the moment.
It is not easy to lie among one of the best developers in India but Lodha Group has achieved this in quick time since its inception. This vision of the group is to build a better life and the complete team works with utmost dedication to make it the best in the field of real estate in India. Lodha Group has not only played a significant role in the development of real estate in India but also it has played a vital part in social welfares as well. Corporate social responsibility is undertaken by the social initiative wing of the Lodha Group known as the Lodha Foundation. Lodha Foundation established in the year 2007 has its prime focus on the development of health, education and livelihood. These developmental initiatives are undertaken by Manju Lodha who is the chairperson of Lodha Foundation and is the wife of Mangal Prabhat Lodha.
It is a common practice to buy property in Pune, Mumbai or any other location for end usage or investment purposes. Nowadays, with new and more elaborate projects coming up in various parts of urban cities, many people tend to buy houses and flats more than what they actually intend to use as a means of future investment or for future planning. However, the trend has also set in of using this extra property for commercial purposes like setting up an office, clinic or running some kind of business from the same premises. It is more often the case with people who are doctors, chartered accountants, lawyers or other jobs which are majorly work from home professions or which involve meeting clients and doing deals majorly from homes. This practice, however insignificant it might seem, is illegal.
- As per the rules of the Government, residential properties cannot be used for commercial purposes or else they will be treated as commercial properties and will attract higher rates of taxes like the property tax, water and electricity surcharge and other taxes in accordance with the commercial property laws. As a result, if a rented residential property is being used for commercial purposes or even a self owned one, the owner will have to pay a higher tax depending on the rules of the state government and will have to obtain prior permission for the same.
- A residential property or house in Mumbai, Delhi or any other particular location of your choice can be used for commercial purposes in cases where the particular state allows it but after the permission of the residential society and the complex owners. This might also require permission from the local municipal body which will decide whether or not to allow such an establishment and whether all the relevant permissions have been got from the locals and the residents. Some states allow a part of the residential property to be used for commercial purposes and accordingly the taxes are levied and the surcharges come into play. However, in all cases, approval and permission of the residential society and the real estate developer is required.
- There are set rules and procedures for converting residential properties into commercial ones and for that you have to separately apply to the municipal body as per the requirement, the size or area of the property being converted, the purpose of use and the resources it would require. This would in turn attract higher property taxes and water and electricity cess as per the prevailing norms and the owner will have to bear it. So in cases where the property has been rented, the owner can object to the conversion and setting up of commercial practices on account that he will have to pay higher tax rates without moving up the rent.
However, certain practices do not count as setting up a commercial establishment like running yoga or meditation classes, dance and music lessons, tuitions or any such activity. Everything which requires professional help will attract commercial property billings in case you plan to set it up in your residential complex.
Budget 2017 -2018 is really expected to hold promise for the real estate sector. The Budget 2017 provides the reforms in the industry in the form of tax incentives and other provisions of the tax related to the income tax. The real estate sector being the largest second contributor to the economy is experiencing certain issues in their growth. The relaxation of the Foreign Direct Investment norms had allowed inflow of the FDI that supports the growth of the sector. The demonetisation had affected the sector growth for a short term. The real estate developers in the sector are facing some issues with the development.
The act related to the real estate such as Real Estate Regulation and Development Act (RERA), 2016 and Benami Transaction Act are passed to bring the changes and transparency to the sector. The accessing of the funds is made simpler and cheapest as compared to other means. The reduction in the rates of the interest in addition to that of the demonetisation will increase the purchasing power of residential buyers that will in turn increase the growth of the sector. The builders in India are expecting the real estate sectors for the growth that was promised in the Budget 2017 – 2018. The demand-supply gap should be reduced.
Tax associated with the Section 8o-IA and Section 35AD of the Act for undertaking, which in turn develops or operates, maintains the facility of the infrastructure have been further extended to township projects. These acts and provisions are favourable for increasing the promotions of the real estate developers for improving the construction of the infrastructure facilities such as the roads, educational facilities, medical facilities and sanitary facilities.
There are issues that pertain to the Joint Development Arrangement (JDA). The suitable controls should be brought for solving the JDA. Finance Act, 2016 had included the Section 8o-IBA with the grants that exempts house projects with the condition that project should be finished within the time period of 3 years from the approved date. No exemption is allowed for the MAT projects since separate amendments are added for provision of exemptions to those MAT projects.
If the exemption is not provided, it leads to attract 20 percent of taxes below MAT that leads to disallowance of the grants of tax incentives. Finance Minister engaged in revival of infrastructure of corporate companies such as SEZs and developers. MAT exemptions are applicable to the infrastructure companies that lead to the economic growth with the investments in infrastructure developments. The provisions of Section 43CA and Section 50C of the Act used for deemed taxation should be removed by tacking the understatement of the consideration of investigation mechanisms. The builders in India believe that the Budget 2017-2018 will lead to develop the real estate sector.
Additional Read: RERA for the profit of buyers- Guide
With the help of RERA and Finance Bill the real estate sector is going to change a lot in the near future. It was expected since long as it can offer easy money at lower rates, get investment guidelines and also better expectancy. Hence in coming days, one can see huge reforms in the real estate sector particularly in the affordable housing segment.
- The government of India also has provided the definition of affordable housing projects to pave the way for 100 percent tax subsidy on profits of an affordable housing undertaking.The implication of the same will be much helpful the industry to have a push that was much needed during this slack season.
- The leading builder’s and market players in the real estate such as like Shappoorji Pallonji Joyville as well as Tata Value Homes, etc., have also rebranded to offer the best facilities in their schemes. Now they can also have easy finance from leading financial institutions such as IFC, Kotak Investment, and HDFC Capital.
- There are also many common grievances addressed by the government such as delay in possession, taking a long time for approvals, and other issues related to the real estate sector and RERA implementation have been now given more importance. The experts in the field expect better transparency in deals with the help of the new law. The formation of regulatory authority will be much helpful to the buyers as well as the developers in the industry and hence the development of the project will be more streamlined.
- These new changes will help the builders, as well as the market as there will be many more new players in the field that can take the competition to the new height and hence the ultimate benefits, will go to the buyers only.
- There are many other benefits Government have offered to the builders which are other than the SOPs. It includes a low rate of interest as well as a subsidy to the buyers. As per this scheme, the buyer who is taking the loan for the first time can have loan up to 12 lakhs from the Pradhan Mantri Awas Yojana.
- Many of the states also have introduced new policies for the segment in the affordable housing. There are also many land parcels auctioned by various states to offer the housing facilities to the required people. The affordable housing also has got its place in the Pradhan Mantri Awas Yojna as a major part.
Hence in the coming years, there are many areas which can be seen more developed as a part of the affordable housing only. Many developers also take part in this campaign as they can also have an opportunity to have some contribution in this segment.
Also Read: Change your Home to Green Home
Hence, a number of measures taken from the auction of open plots till offering of subsidy to the buyers have made the buyers and builders achieve their dream.
After two years, the Union Ministry of Urban Government has given its approval to Delhi’s LLP (Land Pooling Policy). The Chief Minister of Delhi, Arvind Kejriwal has been notified the rules and conditions after getting permission from the Lieutenant Governor. Around 89 villages have been turned into urban under this new rule and will also be developed as per the DDA (Delhi Development Authority). Over two years, the policy was stuck because of not getting approval for urbanizing agricultural lands from the concerned authorities. According to the Delhi Municipal Corporation Act, 1957 of section 12, once rural villages have turned as urban then they required being converted into developmental areas. Only after satisfying these criteria the Delhi Development Authority can able to invite aggregators and landowners to surrender their lands.
What is DDA 2021 Master plan?
The existing property in Delhi are far from the reach of a normal man, and the space crunch also restricts some new developments. Due to these two aspects, the Delhi Government has hardly participated in the Delhi Property markets. The Delhi Development Authority has planned to build up to 25lakhs of housing units by 2021 under its Master Plan. This plan would require land of 10000 hectares in order to meet its target. This DDA policy will surely affect six satellite zones and around 96 villages. However, this will help the development body a lot to meet its target. Even if half of the 20000 acres of land has developed, then it would be enough to fulfill the housing needs of the National Capital Delhi, according to the DDA and hence the government is taking steps in this direction.
The Scheme of DDA
Under the Master Plan 2021 scheme, farmers can directly able to transfer their agricultural lands to the DDA that would accept the land parcels, which is more than 2 hectares. This is because those two hectares used to develop infrastructures like drainage, road, water supply, electricity, sewer lines and so on. After that, the Government body would also return some fixed percentage of lands to the farmers. For both parties, this policy is a win-win situation. The Delhi Development Authority’s land pooling model has two types of schemes such as,
- People those who surrender land between 2 to 20 hectares can get back 48% of the developed land parcel
- People those who contribute more than 20 hectares can get 60% of the developed land parcel back.
Certain conflicting policies
The Government has approved FAR (floor area ratio) for the Transit-Oriented Development Policy. FAR means the ratio of the sum of building floor area to the plot size on which it is built at 400. However, the floor ratio is less than 250 for the LPP. While Transit-Oriented Development Policy promotes a development of areas within high transport systems like the Delhi Metro, but LPP aims to develop a large area for a residential and commercial purpose.
Additional Read: Bhushan Kumar’s lovely home in Delhi