The real estate sector, which has been making millions in profits over the past few years, has now come under the scanner of the IT department.
NEW DELHI: The real estate sector, which has been making millions in profits over the past few years, has now come under the scanner of the income tax department.
“The builders who have not paid a single penny as corporate tax while floating schemes every other day have come under our notice,” a senior official in the finance ministry told media.
He said the investigation wing of the IT department has kept a close watch on investments made by the companies, besides conducting search operations and scrutinising their documents. This has resulted in substantial tax deposits by the companies.
Parsvnath Builders deposited Rs 50.8 crore as advance tax till December, as against Rs 9.5 crore during the corresponding period last fiscal. The Omaxe Group, which had not deposited any advance tax by December last fiscal, has this time deposited Rs 30 crore.
The biggest surprise, sources said, is the increase in advance tax deposited by DLF Universal from Rs 3 crore last year to Rs 132 crore this fiscal.
Rising profits in real estate, coupled with the efforts of the IT department, have led to an increase in advance tax deposits by builders, a senior official said, adding that the government is also ready to encash the real estate boom.
The Eros Group and GTM Builders have also deposited Rs 40 crore and Rs 20 crore respectively after investigations were conducted by IT sleuths, the sources said.
Having requisitioned 450 vehicles to conduct field surveys for six months, the income tax department has collected over Rs 1,000 crore as additional tax deposits, Central Board of Direct Taxes spokesperson AK Sinha said. Due to the current boom in the real estate sector and high growth in housing loans, banks’ advance tax deposits have also gone up substantially.
Of the 25 top corporate tax paying companies, eight are from the banking sector, which includes public sector major State Bank of India, Punjab National Bank, and Bank of Baroda besides private sector banks like ICICI, Standard Chartered, HSBC, HDFC and Citibank.
Referring to rising tax revenue from real estate, Sinha said builders who want to raise funds from the market and banks, genuinely want to show their profits in account books and pay taxes.
The department is expecting a further increase in tax collections from this sector, he added.
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