Smart city challenge, which has been in the talks for quite some time now, had 45 cities participating in its third round. Out of these 45 cities, 40 cities will be selected for the development as smart cities.

These selected 40 cities are likely to be revealed by the end of june and after this the total count of smart cities will reach 100.

The government had launched the mission of ‘100 Smart City’ last year in June. The first list comprising of 20 cities was revealed in January, 2016. Since 23 cities were eliminated from the first round, they were given a chance to improve the proposals they had prepared. As a result of the improved proposals, 13 out the 23 cities got selected in May, 2016.

An amount of Rs.48000 crore has been decided by the government to be spent on the development of these smart cities.

All the cities selected in the Smart City Challenge will be individually given an amount Rs.500 crore (not in one go, but over a period of time) for their development by the central government.

The plans for 60 cities selected in the Smart City Challenge will cost around Rs.1.33 lakh crore has already been approved by the government.

Notices have been issued by government for 140 cases that involve Benami Properties of that are valued at Rs.200 crore, after the Benami Law for Properties has become active.

After the Benami Law for Properties became effective from November last year, many Benami Transactions have come into the picture. Show cause notices are issued for 140 cases for the attachment of Benami Properties valuing around Rs.200 crore.

Out of all the cases, 124 Benami Transactions have been influenced by provisional attachment and the attached Benami Properties comprise of immovable properties and bank deposits.

The amendment in the Benami Law for Properties Act became effective and active on 1^st November, 2016.

The Benami Transactions act was on the list of becoming effective for almost 28 years but it could not be implemented due to a few structural flaws.

The government is also promoting and encouraging digital financial transactions which are a part of their strategy that also includes facilitating associated credit which will ultimately help the small enterprises. They will be able to enhance their compliance in tax and their savings in the banking system.

The parties which are involved in the transactions select their mode of payment based on the cost and also other advantages.

State bank of India, the largest bank of India, has announced that all savings account holders in the banks are eligible for three transactions of cash deposit per month which will be free. After the account holder enjoys the three transactions, a fee of Rs.50 added with service tax will be charged per transaction.

Earlier, homebuyers could easily get the full amount of the funds required for the property from banks. To increase their volumes, lenders also used to include the registration cost with the property cost, and with the help of this, they would calculate the Loan-to-Value ratio (LTV).

But then to avoid more than required control and authority, there was capping done by RBI on loans offered in December 2010. LTV loans till the limit of Rs.20 lakhs were capped at 90% while more than Rs.20 lakhs were capped at 80%. Then later in 2012, banks were restricted to add charges of documentation, stamp duty and registration in the price of the house property, by the RBI. After that in 2013, for loans valuing more than 75 lakhs, 75% LTV was introduced by RBI. In 2015, the LTV was relaxed by a small amount, that is, it was increased to 90% for loans up to the limit of Rs.30 lakhs.

All these changes and modifications in the system made the home loan market very stable.

The Vision Of ‘Housing For All’ by 2022
The mission of housing for all is a very noble and progressive mission initiated by the government. To achieve this dream, various measures have been taken like giving infrastructure status to the affordable housing segment, Real Estate Regulation Act (RERA), Pradhan Mantra Awas Yojana (PMAY) etc.

Then in November 2016, demonetization (note-bandi) was introduced which decreased the cash threat while purchasing homes. Consequently, property prices became stable by regulating themselves by 15-25%. Moreover, home loan rates offered by banks has also come down by 1%-8.35%.

Challenges And Issues Faced By Homebuyers
The homebuyers across the nation are taking these changes in consideration and are showing activeness to buy homes. Homebuyers will decide the budget, choose a property, compute and calculate the eligibility for home loans, managing the funds for registration, interiors etc.

Sometimes, getting a home loan seems easier than managing the hard money required. This comes to around 20%-40% of the total price of the property. This becomes difficult because a normal buyer wants years to save up to an amount that is 2%-4% of the price of the property.

There are many homebuyers who are availing a home loan as well as a personal loan. The EMI on personal loans amounts to almost double of the EMIs on home loans. That is the reason why banks prefer people availing a bigger amount of home loan rather than availing a different personal loan.

Home Loan Portfolio Status
The negligence in home loans, home loan rates offered by banks and the losses are the lowest over loan sizes. Because of this, banks are able to afford more risk by the help of greater LTVs.

Mild Property Prices
There are many factors in the recent past like demonetization, unsold inventory in real estate, easy funding for real estate sector and many more which are expected to help in the stability and calmness in the property prices for the coming years.

Prudent Lending
No change has been made in the range of LTV which is 90%. The effective measure which can be taken is to make a compulsory relaxation in LTV by 5-10% for investors to distinguish between the homebuyers who are investing for the first time and the investors.

When India is moving towards the dream of Housing for All, a little less stringency in the rules of LTV will actually benefit many families across the country.

The Delhi Metro Rail Corporation (DMRC) has finally started its new venture in real estate sector. The 2BHK and 3BHK flats by DMRC will be developed in Okhla and Janakpuri of Delhi as DMRC housing scheme. These flats by DMRC are expected to open their applications for booking next month.

Total number flats by DMRC which will be constructed, is 550, out of which 90 will be in Okhla and 460 in Janakpuri. The price of flats in DMRC housing scheme will range between Rs.60 lakh-Rs.120 crore. The plots on which the construction will take place are next to Okhla metro station and Janakpuri metro station.

The projects under DMRC housing scheme will be based on the norms and standards of Transit Oriented Development. The delivery of these 2BHK and 3BHK flats by DMRC is likely to be scheduled in 2019 while the best part is that a reservation of 15% will be made for the EWS (Economically Weaker Sections).

The bookings will be made open for the public most probably by next month and the printing of the plans and brochures for the DMRC housing scheme is also about to begin.

Almost similar to what happens in housing schemes by DDA, projects under DMRC housing scheme will also deliver flats to the applicants by a lucky draw system. All the people whose names will be there in the list will be handed over the flats and the remaining will get their refunds.

The DMRC has had various projects in development of properties like building staff quarters in certain areas of Delhi.

Just like the application system in residential projects, DMRC is also planning to develop and sell commercial units to government and public organizations by inviting applications. The plans of developing these commercial complexes are in areas near Bhikaji Cama Palace and Jantar Mantar.

Real estate sector in India was facing a slump since a time period of 2-3 years, but thankfully a positive diversion took place in H1 2016. H1 2016 as compared to H1 2015 has seen an increase of 7% in volumes. Price regulation in the metro cities had proved to be beneficial as it resulted in increased sales and decreased inventory.  Along with all this, buying second homes in India, which are popularly known as vacation homes, had also become a common trend.

The Note-Ban Impact
The effects of demonetization in real estate sector have been extremely negative in terms of prices and sales. Owing to the after-effects of demonetization, the sales volume came down by 9% in just two months. But thankfully, the residential part of the real estate sector in gaining pace at a steady rate. The consumers have bounced back in full force in the market and are keen on buying homes. But the exact situation is not applicable to the concept of buying second homes in India. The working of this sector has to be understood.

The Working
As the restriction was made on the currency with all the cash withdrawn from the market, the demand for second homes has increasingly gone down. The buyers, who are earning purely legal income or can afford to invest in second homes through legal channels, are the only people who are actually showing interest in buying second homes in India. The interesting thing is that even these people are hoping for the prices to reduce and the real estate sector in India to get a hold of itself.

Effects Of Budget
The effects of demonetization in real estate sector were still showing recovery, when the Budget 2017 hit the market with full force. This is because the tax benefits on buying second homes were capped by the government. The deduction was restricted at Rs.2 lakh, but a provision being given to carry forward the loss for 8 years.  But people who want to enjoy the benefits of buying second homes in India will still face a loss.

To overcome the negative impact of tax benefits on buying second homes in India being capped, a sensible solution has to be taken up. These include analyzing the portfolio and managing the finances in a way that along with being able to enjoy the benefits of buying a second home, you are not facing any loss.

Situation In The Future
The effects of demonetization are visible in the primary market as well as the secondary market. A price of correction of 10-15% is also witnessed in the real estate, which can increase further also. But now all eyes and hopes are on RERA, as people are expecting a positive outcome after the implementation of RERA.

According to a latest incident, a taxpayer was denied the amount which she claimed for the House Rent Allowance (HRA) by the Income Tax Appellate Tribunal (ITAT). The rent was paid in cash by her to the mother, but she could not support this fact with any documents require for tax exemption. Ironic to this, another taxpayer was allowed the exemption in HRA even when the rent was paid to his spouse.

The fact remains that the salaried employees have very few ways to save the tax paid. And therefore, people take the maximum advantage possible out of these few ways which includes the exemption in HRA. They pay the rent to the kin with whom they are living and are able to enjoy the exemption available for HRA. However, the rent paid to the kin is genuine or not, is a totally different thing altogether.

But what option do these new decisions by the ITAT leave with the taxpayer? The fact remains that paying rent to a close relative or known is not considered illegal but what is risky is that, if the ITAT officials dig deep into the documentation and authentication process and if the taxpayer is not able to prove the authenticity, then the entire claim would be cancelled.

So, to remain safe and to enjoy the exemption available for HRA, one should follow some precautions while the rent is paid to a close relative. Proper documents for tax exemption or agreement should be prepared and signed by both the parties. Along with this, the payments in cash should be avoided and banking channels should always be preferred.