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14 Mar,2019 by Sanjeev Kr. Srivastava

FSI and TDR are the most commonly and widely used and heard terms. All of us must have heard these terms. The term FSI is generally coupled with a number i.e. 1 FSI, 2 FSI, etc. FSI and TDR is undoubtedly the most important and sometimes deciding aspect. However public and the persons in real estate are not aware about these terms and their exact legal meaning.

What exactly is FSI?
FSI stands for Floor Space Index. In simple words, it is the area of construction permissible on particular plot of land. FSI is the proportion of construction of all floors to the total area of plot of land. Once we understand this proportion, we can understand the meaning of 1 FSI, 2 FSI etc. For example if a plot of land is admeasuring about one thousand square meters, and the permissible FSI is 1, then about one thousand square meters of construction is permissible on that plot of land. Commercially speaking FSI is the original development or construction potential of a particular plot of land.

What is TDR?
Next most important term is TDR. TDR is an abbreviation of Transferable Development Rights. TDR is also a kind of FSI. How is TDR generated? To build or expand the public utilities like ground, garden, bus stand, roads, etc. sometimes government requires private land or portion of it. In such circumstances, the government acquires the required land belonging to private party. The compensation for such acquisition is paid in terms of money or TDR. TDR is nothing but the development potential or FSI of the area of land a TDR is given in form of DRC i.e. Development Rights Certificate. TDR or DRC is negotiable and can be transferred for consideration. The owner of acquired land can either use the TDR for himself or can sell it in an open market.