IT dept to review all realty deals to unearth black money
April, 19th 2011
The income tax department plans to review realty deals following allegations of rampant use of black money in many transactions. "We will take appropriate action wherever we find involvement of black money in such transactions," said Sudhir Chandra , chairman, Central Board of Direct Taxes .
Chandra said the department would begin scrutiny of property deals in the national capital region and follow it up in other metros.
The value of most real estate transactions in the national capital are suppressed to save on stamp duty, capital gains tax and wealth tax and are believed to have black money component as high as 65%, said another income tax official.
The black money component continues to remain high despite most states now fixing circle rates, or minimum rate at which a property can be registered, for various localities.
The income tax department receives data on all property registrations worth more than 30 lakh as a part of its special data capturing mechanism from property registrars.
In a separate proposal, the government is also considering making it mandatory for registrars to report all property transactions under the anti-money laundering law. Any property transaction used to launder illicitly earned money will, after an amendment in the Prevention of Money Laundering Act, attract harsher punishment.
The department is expected to rely heavily on technology and information on taxpayers it receives from various sources under 360 degree profiling.
Realty sector has been on the income tax department's radar for a while and tops the list of sectors most searched.
"The department has received many complaints of the involvement of black money in the sale and purchase of land and houses," the official said.
Recently, a well-known Mumbai developer admitted to undisclosed income of 200 crore. In a separate case, 100 crore was recovered from a Surat-based real estate company .
In 2009-10 and 2010-11, the I-T Department unearthed unaccounted income of over 30,000 crore in its search and seizure operations.
Chandra said while the number of searches had come down but the amount of undisclosed wealth had increased as the department was making effective use of technology. "Use of technology and data as part of 360 degree profiling system has improved the quality of searches," Chandra said.