« Top Headlines » Open DEMAT Account in 24 hrs  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal «  CEOs favour FBT abolition... Professionals can’t claim Sec 32 tax benefit, says SC... » I-T dept mulls capital tax on property deals November, 29th 2007 In a tacit acknowledgment that it is virtually impossible to stamp out black money from real estate deals, income tax officials are in favour of a new levy on such transactions.   The suggestion is to introduce a capital transaction tax based on the circle rate of the state in which the deal is registered.   The reason for the move, which may be part of next years tax proposals in the Budget, is to ensure that the exchequer gets some revenues from the real estate boom.   The tax could be levied at the rate of one per cent on the declared value of the transaction either on the seller or the buyer. Property values are skyrocketing in the country and we know that there is massive under-reporting of actual transaction value, said a senior government official.   Buyers and sellers under-value property transactions to avoid paying high stamp duty and income tax, but they pay the brokers a fee, say, 1 per cent, on the entire value of the deal. The capital transaction tax can be levied at a very marginal rate, with the base being the existing circle rate in the local area, the official added.   Circle rates are area-based minimum rates applicable for registration of properties and vary from state to state. For instance, Delhi has been divided into eight circles graded A to H and the circle rates vary from Rs 6,000 to Rs 43,060 per square metre.   Typically, the cash-to-cheque or draft payment ratio (also called black and white in real estate circles) is 60:40.   In housing deals that are financed through institutional loans, the incidence of black money is lower. However, land deals, for which finance is harder to come by, tend to have a higher black money component.   It is such transactions on which income tax officials are focused. All real estate transactions of Rs 30 lakh and above have to be reported to the tax authorities by the registrars of properties.   This is a mandatory commitment as part of the Annual Information Return of seven different high-value financial transactions required to be furnished under section 285BA of the Income-Tax Act, 1961, by specified individuals and agencies.   In 2006-07, the number of real estate deals worth Rs 30 lakh and above went up by 40 per cent to nearly 108,000 across the country.