I-T Dept to issue notice where cash transaction is above Rs 20,000 in property purchase
Be ready to receive the I-T Department's notice if you have made above Rs 20,000 cash transaction in a property purchase in Delhi. I-T Department's Delhi division is going to start a drive against property purchases where the cash transaction crosses the limit of Rs 20,000.
"Income Tax Department's Delhi division is short-listing the registry of properties involving cash payment above Rs 20,000. I-T Dept has scanned all the registries made from 2015 to 2018 when I-T teams visited all 21 Sub-Registrar offices of Delhi. They scanned all the registries done from June 1, 2015, to December 2018 where the cash payment above Rs 20,000 was made," a senior I-T Department official said, requesting anonymity.
In order to curb the generation of black money by way of dealings in cash in immovable property transactions, Section 269SS of the Income-Tax Act effected some changes for the realty sector in 2015.
As per the tax law formulated by the Central Board of Direct Taxes (CBDT), which is effective from June 1, 2015, any transaction in real estate including agriculture land shall be required to be made through account payee cheque or real-time gross settlement (RTGS) or electronic funds transfer if the amount is Rs 20,000 or above.
If the cash transaction beyond the limit is done, then a penalty of an amount equal under Section 271 D of Income Tax Act will be imposed on a seller who accepts cash or refund of advance is made in cash by the seller of the property.
The assessment officer of I-T Department will start sending notices from next month. The notices will be sent to both the seller and the purchaser. The seller will be asked to pay the penalty of an equal amount if he has accepted cash above Rs 20,000. "We will also ask the source of money with the purchaser," added the I-T officer.