The government has withdrawn a provision that would have allowed taxpayers investing unaccounted money in the real estate sector to do so without scrutiny over its source, following widespread criticism.
The amendment was passed in parliament today (29 June) through the Finance Bill.
Earlier, the government had proposed that if a taxpayer disclosed actual investment beyond the declared deed value in previous real estate transactions, no authority would question the source of that additional money.
Critics argued that such an indemnity provision would effectively enable the whitening of illicit funds, as it removed the requirement to explain the origin of undeclared wealth.
The Centre for Policy Dialogue (CPD) had also criticised the proposal, warning that it could open the door for legitimising black money.
Under the revised framework, unreported income can still be invested under existing rules by paying regular tax rates along with an additional 10% penalty.
However, unlike the scrapped provision, this route will not offer immunity, meaning authorities can still question the source of funds.
Officials said this effectively closes the scope for unrestricted investment of undisclosed income in real estate, while retaining a regulated disclosure mechanism with penalties.
black money / Real Estate / Finance Bill
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