24 November, 2020

A Frozen Goldmine

A slump leaves the I-T dept sitting on real estate worth crores

A Frozen Goldmine
outlookindia.com
-0001-11-30T00:00:00+05:53

THE real estate slump has hit brokers, speculators and corporates across the land. Add one more name to the list:the Income-Tax department. Thanks to the slump, it's stuck with 64 prime pieces of real estate worth Rs 93.5 crore in Mumbai and another 34 properties in Delhi, worth Rs 9 crore when acquired.

But what is the I-T department doing with bungalows in Juhu and South Delhi? Simple. If someone is suspected of evading taxes by undervaluing his property, the department is empowered to purchase the property from the owner at the declared price. The owner has no option but to sell.

According to law, if the value of transactions of immovable property, located in any one of 28 notified cities and towns, exceeds a prescribed limit (see table), the buyer and seller are jointly required to file form 37-I, where the value of the property has to be declared. If the property is undervalued in the form, state governments lose stamp and registration duties which are calculated as a percentage of the registration price. If the...

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