Clean up Real Estate Market of India - Modi’s Fight Against Corruption continues....
Our honorable PM Mr.Modi is trying to keep no stone unturned, to drive away corruption from India. After Demonetization many reforms are done in taxation and various structural changes had been brought in to effect, in all major sectors of the economy, including real estate. To overhaul the messy real estate market of India, prior to Demonetization - i.e. scrapping of old 500 and 1000 rupees notes, Benami Act was brought into effect, last year, which was not covered much in the media.
Fight Against Corruption in Real Estate Market
Mr.Modi is trying to plug every loophole of corruption techniques. Buying real estate property in someone else's name is a common practice of wealthy people who buy large properties by evading taxes. All financial and land dealing departments of the government have already stepped up scrutiny measures of real estate assets with suspicious titles.
All moves are to clean up real estate market of India, right from the arcane land record department, loans, construction phases to final completion of registration proceedings.
Law for root-level corruption: Benami Property Act
To put a fight against corruption at the fundamental root-level, i.e. at land acquisition level, a law is enacted called as Prohibition of Benami Property Transaction Act or Anonymous Property Act which is popularly known as Benami Property Act. This law has been brought for those people who often use cash for which they haven't paid taxes on, to buy property and name it in for their trusted relatives or employees. The industry had estimated that about 5-10% of real estate property in many cities are bought by people who want to evade taxes.
How Modi government, is exploring all shortcomings of the law to fish out the culprits?
Sources have confirmed that the government, is specifically, using tax returns filed in July, raids and data from bank transactions to collect information about suspicious real estate property dealings.
1. Inaccuracy of tax law- The government believes that there are some flaws in the tax laws of the country, due to which mismanagement of Anonymous property and real estate dealings are done in the wrong way.
2. Income Tax Return Filing- The deposit of the income tax declaration or the filing of income tax returns, until July of this year, is being checked minutely. Suspicious people or companies are being checked first.
3. Recovered Documents in Raids- The Department of Income Tax has conducted raids in many parts of the country by coordinating them with the rest of the agencies. Among them, there are many cash and gold recovered in addition to important documents which are under scrutiny.
4. Transactions of Bank- The IT department and the rest of the agencies are tracking certain accounts throughout the country. The operators of these accounts, who have purchased benami properties or invested in the real estate sector by illegal means are under lense.
Which people are more suspicious?It is believed that political leaders, businessmen and NRI people who have invested in properties in the name of relatives or close friends are under suspicion.
Benami Property Law DirectivesThe law states that the people who hold assets that don't actually belong to them could face up to seven years in jail, with the seizure of the property.
“PM asserts – No question of retreat.”
It is very clear that the government of India is going to be tough with all wrongful activities happening in all the sectors which are hampering the growth of the nation and its people. With RERA has already been implemented to fight against the unlawful practice followed by a few builders in the market. Benami Act implementation is also sending a strong message to all those people who try to advantage of the loopholes in the system.
This has helped in building trust in consumers for the real estate property developers. It surely brings an atmosphere of transparency, availability of more affordable land property in the Indian market and deters others to amass land property by unlawful means.