Income Tax Department Uncovers Major Under-Reporting of Real Estate Transactions in Nagpur

The Income Tax Department has uncovered significant under-reporting of real estate transactions in Nagpur, adding to a growing list of discrepancies found in various sub-registrar offices (SROs). An earlier scrutiny revealed that property registrations worth close to Rs1,000 crore were not reported to the department by the SRO in Hingna. Now, gross under-reporting has been detected in SRO-7, which covers areas under Nagpur city. Initial investigations showed that deals worth nearly Rs500 crore were not reported by the SRO. The investigations are ongoing.

The action was taken by the Income Tax's Intelligence and Criminal Investigation (I&CI) wing, which oversees reporting under the Statement of Financial Transaction (SFT) by various agencies. An initial probe into the returns based on the findings showed a number of individuals who reported income ranging from Rs10 to 20 lakh a year, purchased properties worth tens of crores. The money for the purchases was often shown as unsecured loans, according to sources. In many cases, capital gains were not paid by the sellers of properties.

Any registration of a property worth over Rs30 lakh has to be reported under SFT. This helps the tax authorities keep tabs on deals that may not have been reported in tax returns. Sources indicate that some of the deals not reported by the SRO involve prominent individuals in the city. A similar under-reporting was also uncovered in Malkapur tehsil of Buldhana.

The findings highlight the need for stricter oversight and enforcement of reporting standards in the real estate sector. The Income Tax Department is expected to take further action to ensure compliance and recover any lost tax revenue. The ongoing investigations may lead to more revelations and potential legal action against those involved in these under-reporting schemes.

This issue underscores the importance of transparency and accountability in the real estate market, especially in major cities like Nagpur. The government is committed to ensuring that all transactions are reported accurately to prevent tax evasion and maintain the integrity of the financial system.