Income-Tax Department probes ₹8,500 crore in property deals for evasion and benami ownership
The Income-Tax Department is scrutinising property transactions worth ₹8,500 crore, focusing on unreported, undervalued and benami deals. About ₹2,000 crore of the identified transactions are suspected to involve benami arrangements, with officials cross-referencing PAN data against income tax retur
The Income-Tax Department is tightening scrutiny of land and property transactions after identifying deals worth around ₹8,500 crore that were either not reported, were undervalued or involved suspected benami ownership, said people familiar with the exercise.
The transactions span bulk land purchases, agricultural land, farmhouses and other high-value properties, the people said, adding the department is looking at deals finalised in FY25 and reported in FY26 returns, besides those in the current filing cycle. About ₹2,000 crore of the identified deals are suspected to involve benami arrangements, the people said.
Officials are examining whether an individual shown as the purchaser or owner is also the same person who funded the transaction and ultimately benefits from the property. “We will be starting from the current and previous year and then will look at transactions in previous years also,” a senior official told ET, requesting anonymity as the probe is continuing. “In many cases, the PAN (permanent account number) used in the transaction did not have income to support the property transaction.”
The department has asked its field formations to match the PAN used in purchase, sale and transfer of land and property with that used by the taxpayer to file I-T returns. Officials are also checking the investment disclosed in the return against the value of the acquired property. In a benami transaction, a property can be registered in a person's name while the funds come from another person, leaving the actual beneficiary outside the immediate ownership record.
The department is also examining underreporting of property valuations and transactions where the recorded consideration doesn't capture the full amount paid. Unreported cash components in property deals are another area of focus. “Once the transaction value, PAN and return data are brought together, it becomes easier to identify where the money trail does not match the ownership trail,” the official said.
Many email intimations have been sent for such transactions. The exercise reflects a broader shift in the tax department's enforcement strategy from relying predominantly on searches and surveys to using transaction-level data to identify cases for action. Officials said the convergence of data from multiple channels and increased disclosure by the reporting entities in the last two years including banks and post offices are also helping the department to crack down on tax evasion.
The department has already initiated the NUDGE campaign in which taxpayers are alerted to specific discrepancies and given an opportunity to correct their returns based on mismatches in their tax returns and information available with the department. The Central Board of Direct Taxes (CBDT) recently used the model to pursue undisclosed overseas assets and income. The first campaign prompted 24,678 taxpayers to revise their returns, resulting in disclosure of foreign assets worth ₹29,208 crore and foreign income of ₹1,089.88 crore, according to the data shared by CBDT.
