I-T Department Uncovers Major Under-Reporting of Real Estate Deals in Nagpur
The income tax department has discovered significant under-reporting of real estate transactions in Nagpur, with deals worth nearly Rs500 crore not reported by the sub-registrar office (SRO-7).
Real EstateIncome Tax DepartmentUnderreportingNagpurSro7Real EstateAug 13, 2025
Gross under-reporting has now been detected in SRO-7, which covers areas under Nagpur city. Primary investigations showed that deals worth close to Rs500 crore were not reported by the SRO. The investigations are continuing.
The action was taken by the income tax's Intelligence and Criminal Investigation (I&CI) wing, which also 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 running up to Rs10 to 20 lakh a year, purchased properties running into tens of crores. The money for the purchases was shown as unsecured loans, according to sources. In a number of 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 taxman keep tabs on deals that may not have been reported in the tax returns. Sources say some of the deals not reported by the SRO include those by some prominent persons in the city. A similar under-reporting was unearthed in Malkapur tehsil of Buldhana too.
The discovery of these under-reported transactions highlights the ongoing challenges in ensuring transparency and compliance in the real estate sector. The I&CI wing is expected to take stringent actions to prevent such under-reporting in the future and to ensure that all transactions are accurately reported to the income tax department.
Frequently Asked Questions
What is the significance of the Statement of Financial Transaction (SFT)?
The Statement of Financial Transaction (SFT) is a critical document that helps the income tax department keep track of high-value transactions, such as property registrations worth over Rs30 lakh. It ensures transparency and helps in identifying any discrepancies or under-reporting in tax returns.
What are the potential consequences of under-reporting real estate transactions?
Under-reporting real estate transactions can lead to legal penalties, including fines and prosecution. The income tax department can also demand back taxes, interest, and penalties for any unreported income or capital gains.
How does the I&CI wing of the income tax department operate?
The Intelligence and Criminal Investigation (I&CI) wing of the income tax department is responsible for investigating financial irregularities and ensuring compliance with tax laws. They oversee the reporting of transactions under the Statement of Financial Transaction (SFT) and take action against any under-reporting or fraudulent activities.
What areas does SRO-7 cover in Nagpur?
SRO-7 covers various areas within Nagpur city. The sub-registrar office is responsible for registering property transactions and other legal documents in these areas.
What steps can individuals take to avoid under-reporting in real estate transactions?
To avoid under-reporting in real estate transactions, individuals should ensure that all property purchases and sales are accurately reported to the relevant sub-registrar office. They should also maintain proper documentation and file accurate tax returns to avoid legal complications.
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