I-T to review big property deals over Maharashtra tax evasion
June, 04th 2015
Suspecting massive capital tax evasions in property deals, the income-tax department in Maharashtra has sought the list of all high-value property deals in the state during last four years starting 2011-12.
"We have collected details of property transaction for the four years between 2011-12 to 2014-15 from the registration and stamps department of the Maharashtra government," a senior I-T official told dna.
According to the I-T sources, the data regarding 80,000 immovable property transactions involving 1.5 lakh sellers has been collected and the same is being verified with returns data available with the department.
The details collected by the I-T department include the transfer of capital assets, where stamp duty value assessed is more than the declared sale value, name and address of the seller and buyer, date of registration, sale consideration, description of the property and transaction amount, among others.
The move is aimed to stop black money circulation in real estate, one of the sectors that accounts for a large share of black money.
According to the tax officials, the difference between purchase and sale price of a property, referred to as capital gain, is taxable but many people who have sold properties have not filed returns of income in spite of having taxable capital gains. "This could invite penal action," said an official.
"It was noticed that thousands of real estate deals, whose valuation is above Rs 10 crore, were being shown as less than 50% on books," said the official.
"There is a high probability that many of the sellers have not filed returns of income in spite of having taxable capital gains on these transactions," he said.
"We have already begun action in some of the cases, while some other cases will go for re-assessment," add officials.
As per the provisions of the I-T Act, a penalty equivalent to tax is payable which may go up to three times if the capital gains on the land transactions are not correctly disclosed. Besides, non-payment of tax on such income would also invite prosecution under the said provisions.
As per the current income-tax rules, long-term capital gains on sale of a property held for three years attract 20% tax, while a property which is in possession with seller for less than three years will attract 30% tax. However, there is an exemption in certain cases. If the assessee purchases the new residential house within a period of one or two years after transfer of the original house, some concessions are being provided under the law, depending on the value of transaction.
For under-construction properties, the construction needs to be completed within three years from the date of transfer of the original house.