Income Tax Department Investigates Real Estate Deals in New Delhi
The Income Tax Department has initiated an investigation into real estate transactions in New Delhi to address concerns regarding black money and tax evasion. This initiative will eventually expand to other metropolitan areas. The department aims to scrutinize the role of undeclared funds and tax avoidance in these dealings over recent years.
“Analysis of the property deals will start with New Delhi and appropriate actions would be taken as required”, stated Sudhir Chandra, Chairman of the Central Board of Direct Taxes (CBDT).
Increased Scrutiny of Developers and Dealers
Following numerous complaints about the involvement of black money in the real estate sector, the Income Tax Department has conducted raids on several real estate developers in the past few years, including prominent figures in the industry. IT officials assert that these raids have uncovered substantial amounts of undeclared income from numerous builders.
The department is implementing a new process to monitor funding sources for developers' projects, encompassing both individual investors and property dealers. It is estimated that approximately 40-60 percent of the cash component in these transactions goes unreported, enabling builders to evade taxes on their cash income. The department is intensifying its focus on larger dealers rather than smaller players.
Trends in IT Department Raids and Asset Seizures
Over the past four years, the value of assets seized by the Income Tax Department has more than doubled, despite a simultaneous decrease in the number of raids conducted. Specifically, the department searched 529 groups in 2006-07. The frequency of these searches subsequently decreased to 454 in 2007-08, 429 in 2008-09, and further down to 409 in 2009-10.