Cash Transactions Persist in Indian Real Estate Despite Digital Push
A LocalCircles survey reveals that 66% of property buyers in India use cash for part of their transactions, highlighting ongoing challenges in transparency and compliance.
Real EstateCash TransactionsTransparencyDigitalizationBlack MoneyReal Estate NewsNov 07, 2025
The survey findings are concerning, particularly in the context of the government's push for digitalization. According to the data, two-thirds of property buyers used cash for part of their transactions, with 26% paying over half the property value in cash. Additionally, 19% of buyers paid between 30-50% of the property value in cash. The survey also reported that 44% of property buyers paid bribes to three or more agencies during the purchase process.
The prevalence of cash transactions in real estate points to several issues. First, the use of cash facilitates undervaluation of properties, allowing buyers and sellers to avoid taxes and registration fees. Second, the real estate sector continues to be a haven for undisclosed income, nine years after demonetization. Third, the high incidence of bribery indicates systemic issues in the property registration and transfer processes.
The Income Tax Department has been actively working to address the issue of black money in real estate. Over 465 survey operations have been conducted, leading to the detection of Rs 30,444.00 crore in undisclosed income. Despite these efforts, challenges remain. While metropolitan areas have seen some reduction in cash transactions due to digital reforms in new projects, smaller towns continue to struggle with non-transparent dealings. The persistence of cash transactions suggests that more comprehensive reforms may be needed to address the root causes of this issue.
The LocalCircles survey highlights the ongoing challenges in India's real estate sector regarding transparency and compliance. While digital initiatives have made some inroads, particularly in urban areas, the widespread use of cash in property transactions remains a significant concern. This situation calls for stronger enforcement measures and possibly new policy initiatives to promote transparency and reduce the circulation of black money in the real estate market.
In conclusion, the survey underscores the need for a multi-faceted approach to tackle the persistent use of cash in real estate transactions. Strengthening regulatory frameworks, enhancing digital infrastructure, and increasing public awareness are crucial steps towards achieving a more transparent and compliant real estate market in India.
Frequently Asked Questions
What percentage of property buyers used cash for part of their transactions?
According to the survey, 66% of property buyers used cash for part of their transactions.
How much of the property value did some buyers pay in cash?
26% of buyers paid over half the property value in cash, while 19% paid between 30-50% of the property value in cash.
What percentage of buyers reported paying bribes?
44% of property buyers reported paying bribes to three or more agencies during the purchase process.
How much undisclosed income has the Income Tax Department detected?
The Income Tax Department has detected Rs 30,444.00 crore in undisclosed income through 465 survey operations.
What are the main issues highlighted by the survey?
The survey highlights issues such as tax evasion, persistent black money, and systemic corruption in the property registration and transfer processes.
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