Why Realty Sector Contributes To Black Money In India?

By SiliconIndia   |   Wednesday, December 19, 2012   |    3 Comments
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Another reason behind this major problem is the wide gap between the demand and supply of housing.  Although there is paucity of properties, several property owners have stocked their properties hoping that the price will head towards north in the coming years. Hence, both the mismatch between demand and supply and speculative urge give rise to the chances of bribery in real estate segment.



According to market experts, most of the real estate transactions involve illegal money, which means 50 percent of the money could be paid in cash in order to avoid taxes.



2) Property deal involves whopping transaction costs



The property taxes are huge for buyers as well as for sellers. In some cases, the property taxes may shoot up to 10 percent of the total property value. When it comes to paying taxes, a buyer has to pay taxes to register the property in their name and a seller has to pay capital gains on the variation amount between the purchase and sale.



Also Read: India's Tallest Residential Towers

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Reader's comments(3)
1: as opposed to verifying what in form of law can be done to prevent it, IF we have more efficient, moral and non corrupt officials at all land related government offices, we may fare better here. Also, if there are people in the government machinery that "refuse" to take a bribe and ensure that none in their respective units do so are required to reduce this scourge. Jai Hind.
Posted by:Srivas - 21 Dec, 2012
2: People also convert their white money into black to earn high returns. Few people purchase property through black money and sale it out in white and purchase again a residential property to save taxes few invest in capital gain bonds. Involvement of uneducated and very less educated people are main problem of this sector. Biggest problem is trend.
Posted by:Mukesh Chand Gupta - 19 Dec, 2012
3: Corruption is in every sector not only in real estate.
Posted by:Jini - 19 Dec, 2012
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