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Real Estate Brokers Under Taxman’s Scanner

I-T dept will look into all real estate deals to check cases of tax evasion

AFTER realty developers and private equity ( PE) firms, it is now the turn of property dealers to come under the taxman’s scanner as part of the Income Tax ( I- T) department’s efforts to get the huge amounts of black money rolling in the real estate to account.

              “There is a great deal of black money involved in property transactions, especially in the metros. Black money accounts for 40- 60 per cent of all the deals, amounting to a huge loss to the exchequer both on behalf of the developers and the buyers,” a senior Central Board of Direct Taxes ( CBDT) official told the Press.

              “It is not only developers and the private equity firms that are the sources of routing black money in the sector. We are already closely scrutinising the developers.

              Now we are targeting the property brokerage firms and property dealers, who are mainly responsible for such deals,” he added.

              Earlier this week CBDT chairman Sudhir Chandra said that the department will start scrutinising property deals that had taken place in Delhi and surrounding areas over the last three years.

              Chandra said that the amount of black money is so much that if a person buys a house for Rs. 50 lakh, only half of it is shown on paper and the rest of it is paid in cash.

              The I- T department is planning to look into all the real estate deals so that no possible tax evasion takes place. The drive will first start from the national Capital region and later on will be extended to other cities as well.

              “ The crackdown will happen not only on buyers and developers but we are also going to take strict action against the property dealers who are party to such deals and promote the flow of black money,” the CBDT official said.

              In the past few years, the I- T department has raided the premises of many real estate developers, including some major players, after it received complaints of the involvement of black money in various deals.

              Officials said they recovered black money from most of the builders who were searched.

              The department said that even as the number of searches has gone down, the unaccounted assets have more than doubled over the last three years.

              “ Most of the individuals use property purchase to park their money as a form of investment.

              It has not only promoted the easy flow of black money in the sector but is also responsible for inflating the property prices,” the officials said.

              The department is also planning to set up a forum where buyers and consumers can lodge complaints against any property developers and buyers who ask for black money during property transactions.

              “ At present it is just in the initial phase of discussion. It may take some time for the forum to become operational. However, this will be very effective for the department to track such cases,” the official added.

              In the last few months the realty sector has attracted unwanted attention from the tax sleuth with its involvement in almost all the large scams in the country, be it 2G spectrum allocation, IPL or the Commonwealth Games.


BLACK & WHITE

  • CBDT will start scrutinising all property deals in Delhi over the last three years
  • The drive will start from NCR and will be extended to other cities later
  • T dept has raided the premises of many developers, including big players and recovered black money from most
  • Unaccounted assets are reported to have more than doubled in last 3 years
  • T dept plans to set up a forum where buyers and consumers can lodge complaints against property developers who ask for black money