NAGPUR: The income tax department is seeing an increasing number of tax evasion petitions (TEPs) concerning undisclosed property transactions. Officials say that underreporting by land registrar offices may be contributing to defaulters hiding these deals.
TEPs, which are formal complaints from the public about tax evasion, have drawn attention to the failure to disclose significant property sales in tax returns. Reports indicate that around 20% of these petitions relate to such issues.
Investigations have substantiated several allegations, resulting in the imposition of capital gains tax. In some instances, transactions were carried out entirely in cash. Land registrars, governed by the state government, are mandated to report all real estate transactions above Rs30 lakh (on which stamp duty has been paid) to the income tax department as part of the statement of financial transactions (STF) system.
A notable discrepancy has been observed between the transactions recorded at the Hingna sub-registrar’s office and those reported through the STF, triggering an inquiry. This indicates a necessity to fortify the STF mechanism.
When transactions are documented in the STF, they appear in the I-T system, making it simpler to identify non-disclosed deals. Unreported transactions, however, slip through the regulatory net. Even when payments are made by cheque, sellers can evade capital gains tax by neglecting to report the deal in their returns, as noted by officials. Capital gains tax is applied to profits generated from the sale of properties and other assets.
