Lok Sabha Question No. 223 (UNSTARRED), answered on 2023-12-04
Subject: Black Money in Real Estate Sector
Ministry: FINANCE
Asked by: Mala Roy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 223 TO BE ANSWERED ON MONDAY, 04 TH  DECEMBER, 2023 AGRAHAYANA 13, 1945 (SAKA)

## BLACK MONEY IN REAL ESTATE SECTOR

## 223:    SHRIMATI MALA ROY:

## Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has made any estimate of circulation of black money in real estate sector;
- (b) if so, the details thereof; and
- (c) the steps taken or proposed to be taken by the Government to curb the circulation of black money in this sector?

## ANSWER

## MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a) & (b):  There is no official estimation of circulation of black money in India, including in the real estate sector.

(c):   Various steps have been taken in the recent past to reduce the circulation of unaccounted money in the real estate sector, some of which are as under:

1. Some of the legislative measures under the Income Tax Act, 1961 and the Income Tax Rules, 1962 are as below:

- (i) Section 43CA and Section 50C were brought in for adoption of stamp duty value as consideration if it is more than the declared consideration.
- (ii) Section 50CA read with the relevant Income Tax Rules, 1962, provides for taking of stamp duty value of immovable property held by an unlisted company for the purpose of determination of capital gains on transfer of shares of such company.
- (iii) Section 56(2)(x) provides for taxing the amount of the difference between the stamp duty value and consideration received, if any, in case the same exceeds Rs. 50,000 in the hands of recipient.

- (iv) Section 194-IA provides that any person responsible for paying to a resident any sum exceeding Rs. 50 lakhs by way of consideration for an immovable property (other than agricultural  land)  has  to  deduct  tax  @1%  of  such  sum  at  the  time  of  payment.  The Finance Act, 2022 has amended this section to provide that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of 1% of the higher value out of sum paid to a resident taxpayer or the stamp duty value of such property.
- (v) In order to curb cash dealing in real-estate transactions, section 269SS was amended to prohibit  receipt  of  any  amount  of  Rs.  20,000/-  or  more  for  transfer  of  immovable property  otherwise  than  by  banking  channel.  Similar  restriction  is  provided  under section 269T.
- (vi) Section 285BA  requires  specified entities to furnish a  Statement of Financial Transactions (SFT) in respect of specified financial transactions during the financial year. Such specified financial transactions include transactions in property.
- (vii) Rule 114B and Rule 114E of the Income-tax Rules, 1962 provide for mandatory quoting of PAN and reporting of transaction of immovable property, if the consideration exceeds the respective thresholds specified in these rules.

2. The  Benami  Transactions  (Prohibition)  Act,  1988  was  comprehensively  amended through  the  Benami  Transactions  (Prohibition)  Amendment  Act,  2016  to  provide  for  an effective  regime  for  prohibition  of  benami  transactions.  Such  benami  transactions  include transactions in real estate sector also.

3. The  information  available  with  the  Income  Tax  Department  is  analysed  using advanced tools, with the aim to verify the compliance of an assessee with the relevant tax provisions, create necessary deterrence and to take appropriate action as per law in cases where any discrepancy is found.

4. Appropriate  actions  as  per  the  provisions  of  the  Income  Tax  Act,  1961  include conducting searches and surveys, assessment of income, levy of tax, imposition of penalty, launching of prosecution etc.

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