₹8,500 Crore Realty Transactions Under Income Tax Department Scrutiny

The Income Tax Department has identified real estate transactions worth around ₹8,500 crore where land and property deals were either not reported, or property values were understated, or benami ownership is suspected.

According to officials, the transactions include large-scale land purchases, agricultural land, farmhouses and other high-value properties. The department is examining deals conducted in FY2025 (and reported in FY2026 returns), along with transactions emerging during the current return-filing cycle.

According to the department, in several cases the PAN used for purchasing the property does not show sufficient declared income to support the transaction. Therefore, officials are matching the PANs used in the purchase, sale and transfer of land and property with the PANs used by taxpayers to file their income tax returns.

Officials are also examining discrepancies between the investment declared in tax returns and the actual value of the property acquired. Under-valuation of properties and undisclosed cash payments in property transactions are also under scrutiny. This examination is particularly important in suspected benami transactions, where a property may be registered in one person’s name while the payment is made by another person, with the actual beneficiary remaining outside the ownership records.

Officials said that bringing together transaction values, PAN details and income tax return data makes it easier to identify mismatches between the flow of funds and property ownership.

The exercise reflects a broader shift in the Income Tax Department’s enforcement strategy. Instead of relying primarily on searches and surveys, the department is increasingly using transaction-level data to identify potential tax evasion. Officials said that data integration across multiple sources, along with increased information sharing by reporting entities such as banks and post offices over the past two years, is helping strengthen enforcement.

The department has also launched the ‘NUDGE’ campaign, under which taxpayers are alerted to potential discrepancies between their tax returns and information available with the department, giving them an opportunity to correct or revise their returns.

The Central Board of Direct Taxes (CBDT) recently used a similar approach to identify undisclosed foreign assets and income. According to CBDT data, the campaign resulted in 24,678 taxpayers revising their returns, leading to the disclosure of foreign assets worth ₹29,208 crore and foreign income of ₹1,089.88 crore.

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