Gurugram: Many properties registered below circle rate, tehsil office raids show

GURUGRAM: Daylong searches by the income tax department at two tehsil offices in the city have
revealed that thousands of property registrations were executed at amounts much below the circle rates,
causing losses to the state exchequer.
The I-T raids at the tehsil offices in Harsaru and Kadipur continued from early morning till late in the
night on Friday. The tehsil offices came under the scanner of the I-T department because they had
allegedly withheld information on registry data for properties priced at more than Rs 30 lakh for the past
five years. Officials said that in these five years, the two tehsil offices had executed around 50,000 registries and
collected more than Rs 800 crore in stamp duty.

What caught the attention of the I-T officials is that only 10% of these registries were related to buying
and selling of properties. The rest of the deeds included registration of rent agreements and other such documents. The I-T teams, the officials said, are scanning the data collected from the tehsil offices and will soon
explore legal options against those found guilty of irregularities.
Realty market observers pointed out that with prices increasing rapidly in the sector, there would hardly be any property under the two tehsil offices that were cheaper than Rs 30 lakh. The lack of information on
registries in the past five years becomes all the more crucial because of the rising property prices, they said.

An I-T official said that executing registries below the circle rate was a violation of Section 50C
(devaluation of property price) of the Income Tax Act. Not just the revenue official concerned, the buyer
and seller of the particular property are also liable for action in such cases.
For instance, if the circle rate of a property amounts to Rs 90 lakh but the registry executed is worth only
Rs 50 lakh, the difference amount (Rs 40 lakh) will be shown as an “income” of the buyer and seller.
Both will then have to pay capital gain tax on the difference amount.
An official pointed out that by withholding information, the tehsil offices had provided illegal benefits to
many buyers and sellers of properties.
“This prevented the I-T department from acting against the buyers and sellers. Had they paid capital gain
tax, it would have augmented the state’s coffers,” he added.
Officials could not recollect the last time such raids were conducted at tehsil offices. “The searches have
lifted the veil off crucial information. We are planning more such raids in tehsil offices in the future,” the
official said.
On July 22 last year, the Haryana government had banned all registries in the state after it was found that
a number of illegal registries had been done during the first lockdown by local tehsildars in connivance
with property dealers.
Seven current as well as retired tehsildars were suspended by Haryana chief minister Manohar Lal Khattar and were later booked for violating Section 7 of the Haryana Development and Regulation of
Urban Areas Act, 1975. An investigation revealed there were around 1,200 land registries that had been executed without informing the town and country planning department or taking a no-objection certificate from it. According to rules, the registration of sale deeds of plots measuring less than half an acre cannot be done without permission from the DTCP.