Representative image for raid.
Credit: iStock Photo
Recent raids by Income Tax Department sleuths on three sub-registrar offices in Bengaluru found that there was a huge mismatch between the market value of properties and the actual price paid by the buyers.
The sub-registrars had reportedly failed to file the mandatory tax statement to Income Tax Department. They were reportedly attempting to keep these transactions from appearing on the department's radar.
In the aftermath of these raids, the Income Tax Department will issue notice to those who bought such properties at an undervalued price and ask them to pay the tax that they evaded during registration. According to information available from the Directorate of Intelligence, the Criminal Investigation wing of the Income Tax department , sub-registrar offices in Hebbal, Rajajinagar and BDA were raided.
"The team raided sub-registrar offices that had failed to report the high value transactions -- above Rs 30 lakh -- to the Income Tax Department. The team found a large number of transactions where there is a huge difference between the market value and the actual price paid. The difference between these two will attract income tax payable both by the seller as well as buyer," said an official from the department.
In one particular case, the market value for the purpose of stamp duty was Rs 78 lakh, but the price paid was Rs 20 lakh, the official added. " For Income Tax purposes, the difference amount of Rs 58 lakh is taxable as deemed income in the hands of seller and department will be issuing a notice to those who bought that property," the source added.
During the raid, it is learnt that the Income Tax team obtained 'Index 2' from Kaveri-2 portal generated for reporting period from 2021-22 to 2024-25, and will identify cases of tax evasion.
The Income Tax department had, in the past, written to the state government on several occasions, including letters to the chief secretary, highlighting failure on the part of sub registrars to report high value transactions. "Reporting becomes critical to ensure collection of income tax as it encourages voluntary compliance by taxpayers,” said source.
"What action the state government takes against errant sub-registrars will be keenly watched," the official said.