I-T dept seeks data of property deals worth Rs 1 cr or more in last 10 yrs

The income tax (I-T) department has asked all sub-registrars and tehsildars under its jurisdiction in Mumbai to send it details of property deals worth Rs 1 crore or more in the past 10 years. 

This is aimed at nabbing those who stash unaccounted money in benami property. 

The letters from the I-T department, seeking information of property registrations between April 2007 and June 2017, were issued under Section 21(1) of the Prohibition of Benami Property Transactions Act, 1988. The Central Board of Direct Taxes altered this law significantly through a notification on October 25 last year.

According to estimates of experts dealing in property registrations in Mumbai, there would be at least 500,000 agreements worth Rs 1 crore or more from the past 10 years.

“Without doubt one of the primary destinations for unaccounted money is real estate. Almost all of it is held in benami properties,” said Dinesh Kanabar, chief executive officer, Dhruva Advisors LLP

He added the efforts of the tax authorities were aimed at scrutinising data to find out property acquired from unaccounted sources or were held in someone else’s name. “This is an effort in the right direction.”

To ensure all types of property transfers are covered, the department has asked sub-registrars to provide details of all registrations — development agreements, tenancy transfers, certificates of sales, flat/office/commercial premise sales, amalgamations-demergers, exchange of properties, gifts, lease agreements (with deposit over Rs 1 crore), mortgages, power of attorneys, surrender/partitions of properties/rights, release deeds, transfer of lease, and works contracts. 

The list covers the whole gamut of property transfers. The I-T department has asked for names, address and PAN numbers of sellers and buyers, along with the value of the agreements vis-à-vis the market value, details of properties, and registration dates. Kanabar said, “Properly directed, such an inquiry can go to the root of the issue: Who the real owner of a property is, and can unmask benami holders. The amended law gives sufficient powers to the authorities to deal with cases where properties are held in someone else’s name.”

Sources said the information received will be used with analytics to find out mismatches and identify suspected benami holders. They would be sent notices.

Kanabar said, “What has been a matter of concern is whether these are roving enquiries or have a basis to go by, and also whether after gathering the information that revenue authorities are providing there would be a follow-up mechanism to take the inquiries to a logical conclusion. This has been lacking in the past. Also, property owners who are not in violation of the law should not be harassed.”

According to the 1988 Act, once a piece of property is established to be benami, it can be seized by the authorities.

Net to catch untaxed wealth 

Benami properties are a favourite of those seeking to hide unaccounted money

Total deals

About 50,000 deals of Rs 1 crore are made every year. I-T department should get information of about 500,000 deals over past 10 years

Details sought

Buyers and sellers names, PAN, and agreement and market values

Under cover

Actual number of deals of Rs 1 crore or higher could be far more, as most agreements are made at ready reckoner rates — accepted market value for paying stamp duty