Survey Exposes Persistent Cash Usage in Indian Real Estate Despite Digital Push
A LocalCircles survey across 301 Indian districts reveals that despite government efforts to promote digital payments, cash transactions remain prevalent in the real estate sector.
Cash TransactionsReal EstateDigital PaymentsTransparencyBlack MoneyReal EstateNov 07, 2025
66% of property buyers reported using cash for part of their transaction, with 26% paying over half the property value in cash. Additionally, 19% of buyers used cash for between 30-50% of the property value. The survey also revealed that 44% of property buyers paid bribes to three or more agencies during the purchase process, indicating systemic issues in the property registration and transfer processes.
The prevalence of cash transactions in real estate points to several significant issues. Firstly, the use of cash facilitates the undervaluation of properties, allowing buyers and sellers to avoid taxes and registration fees. Secondly, the real estate sector continues to be a haven for undisclosed income, even nine years after demonetization. Lastly, the high incidence of bribery suggests that there are deep-rooted systemic issues that need to be addressed.
The Income Tax Department has been actively working to combat the issue of black money in real estate. Over the past year, 465 survey operations were conducted, leading to the detection of Rs 30,444.00 crore in undisclosed income. However, 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 indicates 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 more robust and comprehensive approach to address the persistent use of cash in real estate transactions. Strengthening regulatory frameworks, enhancing transparency, and promoting digital payments are crucial steps toward achieving a more transparent and fair real estate market in India.
Frequently Asked Questions
What percentage of property buyers used cash for part of their transaction?
66% of property buyers used cash for part of their transaction, according to the LocalCircles survey.
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 property buyers paid bribes to multiple agencies?
44% of property buyers reported paying bribes to three or more agencies during the purchase process.
How much undisclosed income was detected by the Income Tax Department?
The Income Tax Department 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, the persistence of black money, and systemic corruption in the property registration and transfer processes.
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