High value transactions like sale and purchase of luxury apartments, residential as well as commercial properties in prime locations will now specifically come under the scanner of the Income Tax (IT) Department.

In the wake of ongoing boom in the real estate sector the IT Dept has decided to revise its scrutiny norms to curb tax evasion so as to ensure that people pay the necessary tax, sources in the Central Board of Direct Taxes (CBDT) told Deccan Herald.

To start with, the purchase of luxury apartments or residential properties over and above Rs one crore will automatically come under the scanner of the IT Department, sources said. Even purchase of commercial properties will also come under scrutiny.

In case of salaried persons, who purchase such high value properties through bank loans, if the Equated Monthly Installment (EMI) appears to be on higher side leaving meager amount for day to day living expenditure, the Department could very well ask for explanation, sources said. People going for second apartment or house above Rs 25 lakh in upwardly moving urban areas are also ‘very likely’ to come under the scanner.

Tax evasion

“It has come to the notice of the IT Department that in several cases of sale of properties the Capital Gain Tax is not paid at all. Even if the tax is paid the valuation is made deliberately low to minimize the tax payment,” sources said.

IT department plans to set up Special Cell in  Mumbai, Delhi, Chennai, Bangalore, Hyderabad, Visakhapatnam, Pune, Jaipur and Bhubaneswar. Property dealers and brokers engaged in high value  real estate business will also come under the scanner.