Deliberately not mentioning the transaction information of the property in the income tax return, using fake buyer or seller names in purchases, and above all, the use of fake Permanent Account Number (PAN) to execute buy or sale of the property behind the authority's back are some of the ways that are being exploited regularly .
According to the country's income tax officials, there is a huge amount of tax evasion in the housing sector in the country. They have taken the initiative to catch the real culprits. As a first step, the tax authorities have already started verifying the validity of the property purchase and sale records held in the property registrar's office; such information has come to light in a recent report.
The report also claims that the investigating officers of the Income Tax Department are already examining the registrars and records of property deals in several cities across the country, including Varanasi, Lucknow, Gorakhpur, Kanpur and Bhopal. They are examining the purchase and sale of properties worth Rs 30 lakh or more.
Some officials of the registrar's office were also involved in tax evasion. In many cases, both the name and the PAN were found to be 'fake' during the search of the buyer and the seller, the report also added.
At present, Section 114 of the Income Tax Act mandates that if an account holder withdraws or deposits a large amount of money, the bank has to send the details to the Income Tax Authorities. Officials are still investigating how the tax evasion took place.
A majority of the experts said that such investigations are necessary to stop benami transactions and unaccounted assets across the country. They claim that luxury flats are usually bought with large sums of money using shell companies. In this way, unscrupulous traders have been bringing black money into the market for a long time.
PAN and Aadhaar property documents of both the buyer and seller were made mandatory to prevent unaccounted money laundering in the market. However, from the recent incidents, the Income Tax Department has noticed that both parties are using fake PAN and Aadhaar. As a result, there is a possibility that the information about who is buying and selling the property will go unnoticed by the Income Tax Department.
According to a news source, earlier this year, the Income Tax Department had conducted searches against various companies and individuals. Those whose income from agriculture was Rs. 50 lakh or more were examined.
The Income Tax Department has also examined the accounts of firms that had declared income of Rs 5 lakh or more per acre and were found to be inconsistent. The report also said that the head offices of some cooperative banks were also investigated. There is a huge difference between depositing money and withdrawing it.