Tag Archives: Income Tax Department

Following black money expose CBDT orders probe against select real estate firms

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty-Agencies: The Central Board of Direct Taxes (CBDT) has ordered an Income Tax department investigation against a number of real estate developers who were recently shown by an investigative portal to be willing to accept alleged black money in property transactions.

The apex authority of the I-T department has asked its investigation units across the country to furnish to it reports of any action or probe conducted against the groups named by the portal in the past and in case such an action has not been done, the CBDT has ordered the same to be initiated.

‚ÄúThe CBDT has asked the investigation units of the I-T department that all these reports should reach it by the first fortnight of December,‚ÄĚ a senior official said.

The investigation done by portal Cobrapost.Com included many developers from the national capital region and those from other parts of the country including Mumbai.

While releasing the transcripts and video recordings of its investigation at a press conference here, the portal said that executives from these companies, including some CEOs and CMDs, were ready to accept anywhere between 10-80 per cent of the property value in black money.

These 35 real estate companies under scanner are spread across the national capital, Uttar Pradesh, Haryana, Rajasthan, West Bengal, Andhra Pradesh, Maharashtra and Karnataka.

While some companies had outrightly rejected the allegations that they accept black money in their property transactions, a few others had said that they have already taken action against the concerned executives.

The portal said that most of these executives expressed willingness to accept money abroad through hawala channels, including in Dubai, Bangkok, Singapore and the US.

The findings of this investigation, named ‘Operation Black Ninja’, have come at a time when the government is making all efforts to bring back unaccounted money stashed by Indian citizens abroad.

Cobrapost.Com conducted this sting operation for 18-month-long period across nine states. While releasing the transcripts and video recordings of its investigation at a press conference in New Delhi, the portal said that executives from these companies, including some CEOs and CMDs, were ready to accept anywhere between 10-80 per cent of the property value in black money.

The video clippings, which the portal said were recorded with spy cameras, showed conversations of senior executives from various companies with a person posing as a representative of a ‘prominent politician’, who was looking to convert black money into cash through substantial cash deals.

The findings of this investigation, named ‘Operation Black Ninja’, have come at a time when the government is making all efforts to bring back unaccounted money stashed by its citizens abroad.

Real estate, jewellery and mining major black money generators

Real estate, jewellery and mining are among the main sectors that are generating black money in the country, Parliament was informed.

Minister of State for Finance Jayant Sinha said in a written reply to a query in the Lok Sabha that the Income Tax Department has conducted searches on 273 entities between April-September in the current fiscal.

The total assets seized by the I-T department was Rs 283 crore and undisclosed income was to the tune of Rs 3,371 crore in the first six months till September, he said.

Sectoral analysis in respect of seizures of valuables and admission of undisclosed income during searched conducted by I-T department in the last three finance years indicates that the main sectors are real estate, trading and manufacturing, contractors, service, jewellery and mining, Sinha added.

In 2013-14 fiscal, the I-T department seized assets worth Rs 808 crore and the total undisclosed income was to the tune of Rs 10,792 crore.

In a separate reply, Sinha said that the revenue department has registered 139 cases under the Prevention of Money Laundering Act (PMLA) between January-October. The value of properties attached was Rs 1,911 crore.

For the year 2013, 143 cases were registered under PMLA and Rs 851 crore worth properties were attached.

Intent questioned, taxation dilemma with SEZs

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: Social activist Medha Patkar has rather questioned the need of SEZs and acquisition of such huge tracts of land. Referring SEZs as “pervert corporate projects” Patkar points out that the Maharashtra Industrial Development Corporation (MIDC) had about 80,000 acres of unutilised land – information unearthed through the Right to Information Act.

“When there is so much land with the MIDC, what is the need to acquire more land?” says Bharat Patankar of Shramik Mukti Dal, an NGO.

Undoubtedly, land is a thorny issue for SEZs. The difficulty lies in getting land that is contiguous, vacant and not double-cropped.¬†”It is impossible to get large tracts of land near cities. We gave up the Maval project as we, as a policy, do not go in for projects that the people do not want,” says Nanda.

This calls for the government to translate its intent into an overarching framework. Failing this, land acquisition will remain a contentious issue. Though the government asserts its seriousness to not just promote exports through SEZS but also manufacturing with the proposed National Investment and Manufacturing Zones (NIMZs), the seriousness is yet to be delivered on the ground level.

Commerce Minister Anand Sharma says he remains upbeat about NIMZs becoming a reality. According to the New Manufacturing Policy, each NIMZ is expected to come up in 5,000 hectares or more, and acquiring the land would be the state’s responsibility.

Then there are taxation issues that have put the seriousness and intent of SEZ developers on the back foot. The imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax is believed to be among the key reasons for the cloud over SEZs.

According to an industry expert, the absence of tax exemptions for new SEZs has also led to decline in interest in tax-free enclaves. Investors are very apprehensive about the feasibility to set up SEZs after the new tax structure. The two taxes are a said to cast a shadow over the new SEZs in the pipeline.

“The decision to impose MAT has made SEZS an unattractive proposition. Also, with DTC likely to remove SEZ benefits, there is further scepticism,” says NCAER’s Aggarwal.

The government too has conceded that the imposition of these levies has led to a visible slowdown in export growth from SEZs. “Policy clarity is lacking,” says Ramadas Kamath, Senior Vice President (Infrastructure), Infosys.

The main aim of the SEZ Act of 2005 is to boost exports, create jobs, bring in new investment and improve net foreign reserves, he points out.

“But the focus is lost in the many ‘ifs and buts’ in the Act and the rules. Also, the Commerce Ministry and the Finance Ministry speak in different languages,” he says, citing the example of Instruction No. 70 issued by the Department of Commerce in November 2010 clarifying various policy and operational issues relating to IT SEZs. “It was rejected by the Finance Ministry. Investors don’t know which way to go,” says Kamath.

It is argued that uncertainty in tax laws and poor administration of SEZ laws will only drive away foreign investors in the year ahead. The Indian government is expected to come out with fresh guidelines soon to revive SEZs and it may be a timely intervention. The brand SEZ has nevertheless got hit, investors apprehensive, developers reluctant and the government exploring more options than answers.

Property sellers without PAN face 20% tax hit

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty-Agencies:  Those selling immovable property without disclosing their permanent account number (PAN) are in for a tough time with the government mandating a 20% tax deduction at source (TDS) in such transactions.

The new rules that came into effect from Saturday, June 1, require buyers of immovable property, other than agricultural land, to pay TDS of 1% of the deal size for transactions in excess of Rs 50 lakh.

The proposal, which was announced in the Budget, was notified on Friday,¬†Income Tax (I-T) department officials said. The move is part of the government’s drive to clamp down on black money in the system, with¬†real estate transactions seen as a major source of generation of black money.

While the rules would result in a check on the “white” component of the transaction, as often sellers insist that a large part of the consideration be paid in cash to skirt the capital gains tax. In many cases, where the seller has undisclosed income, cash comes into play and the share can be as high as 50%. The deal size is also underreported to avoid stamp duty.

The I-T department is hoping that through the latest measure, at least some part of the cash economy would come under check, although it already has information of property transactions above Rs 30 lakh.

The rules notified on Friday, May 31, require all buyers to deposit the 1% TDS electronically on the I-T department’s website by filling a form online . Those without access to the online system can fill up the form and make the payment at an authorized bank branch.

IT raids 10 real estate firms in Indore

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty-Agencies: The Income Tax (I-T) department has raided on 45 premises of Indore-based 10 real estate firms on Saturday, Sep 22. A team of 300 officials conducted the operations and recovered Rs 2 crore in cash and sealed 15 lockers of nine realtors. The raids are expected to continue on Sunday as well.

Local media quoted the department spokesperson saying that a host of irregularities have come to the fore during the raid so far. At DB, it was found that the land plots were shown to be acquired at discounted rates thus evading huge amount of tax.

At Silver Spring, which is said to have considerable amount of FDI, it was found that a plot measuring over 400 acre was acquired in an area close to its project in the city and was being sold as plots at existing market rates.

A number of bogus entries were found during the raid. In case of Sakar, stamp duty had been duly paid by the company as per rule. However, its registry was done at a much lower price.

Some of the other builders on whose premises the search was under way include¬†Apollo,¬†Garha, NRK,¬†Pumarth, Moha Chug, Mamsukhani, Royal and Bhandari. Pumarth’s Mumbai office is also being investigated, the spokesperson was quoted.

CBDT to come out with accounting norms for real estate

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyThe Revenue department on Thursday, Sep 6, said it will soon come out with accounting standards for the real estate sector to bring about uniformity in reporting of financial results.

“We will shortly come forward with accounting standard in this regard (for real estate sector),” Central Board of Direct Taxes (CBDT) chairperson Poonam Kishore Saxena told reporters In New Delhi.

She further said the report of the CBDT-appointed committee on accounting standard for the real estate sector was being examined by the Tax Planning and Legislation (TPL), a wing of the CBDT.

The accounting standard deals with recognition of income and expenses and would bring about uniformity in reporting of accounts by the real estate companies.

Earlier, the CBDT report on black money too has pitched for modification of Accounting Standards to check generation of black money by real estate developers.

It said that land and real estate are possibly the most important class of assets used for investment of black money.

In order to deal with the problem, the CBDT had set up an accounting standard committee to harmonise the accounting standards issued by Institute of Chartered Accountants of India (ICAI) for the purpose of notification.

Saxena said, “the committee has submitted on August 14 to me their final report, but it does not actually lay down any standard for the purpose of real estate sector.

“They have pointed out that there are areas including revenue recognition in real estate developers on which there are no accounting standards and central government may consider on its own issuing that accounting standard”, she added.

The report, she further said, was being examined by the tax officials and requisite notifications would be issued shortly.

Real estate top violator of black money, economic intelligence informs Finance Ministry

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Income Tax Department, Finance Ministry, Government of India, CAG, Comptroller and Auditor General of India, Hasan Ali, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyEconomic intelligence agencies have informed the Finance Ministry that a major chunk of illegal funds and black money is being generated and routed in the real estate sector of the country.

Special departments like the Central Economic Intelligence Bureau (CEIB), Income Tax (Intelligence) and the Directorate General of Excise Intelligence have alerted enforcement agencies like the Enforcement Directorate and I-T (Investigations) to conduct special operations and keep a tight vigil on the funds moving in this sector.

At a meeting of the Economic Intelligence Council (EIC) chaired by Finance Minister Pranab Mukherjee some time back, the CEIB reported that during the year 2011, the maximum percentage of undisclosed income (40 per cent) was detected in the real estate sector, followed by the manufacturing sector (27 per cent).

The concealed incomes were detected by the investigation units of the I-T department and the total undisclosed income in the real estate and construction sector was more than Rs 1,400 crore, while the manufacturing sector reported more than Rs 1,100 crore of stashed funds during the calendar year.

The CEIB is the nodal body for collection and dissemination of economic intelligence data. It coordinates with all the concerned agencies in the area of economic offences like the I-T, ED, Directorate of Revenue Intelligence (DRI), Customs and other agencies like the Narcotics Control Bureau, CBI and the IB.

The data also indicates the modus operandi used by tax evaders in these sectors — wrong claim of deductions under the I-T Act, unreported cash transactions, multi-layered transactions, routing of funds from foreign shores, including tax haven nations, and under-valuation of profits.