NEW DELHI: All real estate transactions will have to be reported to the country's anti- moneylaundering agency once the government amends a key law that seeks to curb black-money transactions. The government plans to amend the Prevention of Money Laundering Act , which will require property registrars to file data of transactions recorded by them with the Financial Intelligence Unit, or FIU, a finance ministry official said. "The scope of the (Prevention of Money Laundering) Act is being widened," the official said.
FIU is the national agency responsible for processing and disseminating information on suspect financial transactions to enforcement agencies across the world. The government may also bring several other transactions under the anti-moneylaundering act, according to the official. These may include futures and options trade in commodities. Real estate transactions in excess of 30 lakh are already reported to the Income-Tax Department, but the government wants to tighten scrutiny of the sector, often accused of rampant use of black money and moneylaundering.
Although there is no authentic data available, the cash component in property transactions is widely believed to be as high as 50%. This helps tax evaders park untaxed money easily in property deals. "The realty sector is known to be vulnerable to laundering, so this is a move in the right direction," said anti-moneylaundering expert Navita Srikant. "But suspicious transactions require real-time monitoring and coordination between supervising authorities.
Automation of transactions , training of officers and knowledge of red flags to raise suspicious transaction is the key." Bringing real estate transactions under the anti-moneylaundering law will ensure harsher punishment for tax evaders.
Law to Help Track Tax Havens
At present, many states rely on circle rates to check the use of black money in land deals. A circle rate is the minimum rate fixed by the government for valuation of a property. But it is not considered foolproof as the rate leaves scope for intra-region variations . The amended law will also help track transactions involving funds from tax havens or territories named as "risky" by the financial action task force, or FATF.
FIU is the national agency responsible for processing and disseminating information on suspect financial transactions to enforcement agencies across the world. The government may also bring several other transactions under the anti-moneylaundering act, according to the official. These may include futures and options trade in commodities. Real estate transactions in excess of 30 lakh are already reported to the Income-Tax Department, but the government wants to tighten scrutiny of the sector, often accused of rampant use of black money and moneylaundering.
Although there is no authentic data available, the cash component in property transactions is widely believed to be as high as 50%. This helps tax evaders park untaxed money easily in property deals. "The realty sector is known to be vulnerable to laundering, so this is a move in the right direction," said anti-moneylaundering expert Navita Srikant. "But suspicious transactions require real-time monitoring and coordination between supervising authorities.
Automation of transactions , training of officers and knowledge of red flags to raise suspicious transaction is the key." Bringing real estate transactions under the anti-moneylaundering law will ensure harsher punishment for tax evaders.
Law to Help Track Tax Havens
At present, many states rely on circle rates to check the use of black money in land deals. A circle rate is the minimum rate fixed by the government for valuation of a property. But it is not considered foolproof as the rate leaves scope for intra-region variations . The amended law will also help track transactions involving funds from tax havens or territories named as "risky" by the financial action task force, or FATF.
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