Income Tax Department Launches Drive Against Landowners Skipping Capital Gains Tax
The Income Tax Department is establishing a drive to cover the individuals who took part in joint development agreements but have not paid the required capital gains tax. Sources say approximately 30,000 such landowners have been caught in Kolkata and Bengaluru alone.
Joint development agreements are common across India. These are the deals where a landowner gives land to a developer in return for a share of the property built on it. Whether it is a small plot with a few floors or a larger tract with multiple houses or plots, the landowner must pay capital gains tax on the transferred land.
The drive is likely to begin in the upcoming days. Emails and official letters will be sent to the landowners by the tax authorities in this context, asking them to voluntarily disclose and settle their liabilities. The tax department is hoping they will comply on their own; the individuals who, for any reason, missed paying capital gains tax will now come forward to clear their responsibilities. The landowners who ignore the emails/letters will suffer further consequences.
Landowners whose transactions are associated with the previous financial year can update their Income Tax Returns (ITRs) and pay their required tax liability. An extra 25% may apply if the transaction belongs to earlier years, but paying voluntarily now will help avoid penalties.
