Income Tax Department Probes Massive Property Transaction Irregularities in North-West India
The Income Tax (I-T) department has launched a sweeping investigation into approximately 2.5 lakh property transactions, with a staggering cumulative value exceeding Rs 3 lakh crore, across the north-western region of India. This unprecedented scrutiny targets deals primarily concentrated in Gurgaon and Faridabad, where revenue offices have been flagged for systemic failures in reporting protocols.
Widespread Reporting Deficiencies Hamper Tax Compliance
Officials revealed that a significant number of these high-value transactions were either not reported at all or were documented with incomplete or incorrect Permanent Account Number (PAN) details. Such deficiencies render the data practically unusable for effective tax verification, severely undermining the department's capacity to monitor substantial financial activities and enforce regulatory compliance. The lack of accurate PAN information, mandatory for property deals above Rs 30 lakh, has created a major loophole for potential tax evasion.
Extensive Surveys Uncover Alarming Tax Evasion Patterns
Over the past year, the directorate of intelligence and criminal investigation based in Chandigarh conducted more than 40 surveys and spot verifications across revenue offices in Punjab, Haryana, Himachal Pradesh, and Union Territories including Chandigarh, Jammu & Kashmir, and Ladakh. Specific attention was given to sub-registrar offices, with targeted operations at the Wazirabad tehsil office in Gurgaon and Ballabhgarh tehsil in Faridabad.
These surveys meticulously cross-referenced property transaction records with I-T returns of buyers and sellers. A particularly revealing survey at Wazirabad tehsil in 2025 indicated annual tax evasion surpassing Rs 5,000 crore, largely attributable to the absence of PAN details during property registrations. Across 93 tehsils in 22 districts, PAN information was found missing in numerous cases, despite legal requirements.
Record-Breaking Detection and National Implications
The Rs 3 lakh crore figure represents the highest-ever detection of such irregularities in any single region within India. Sources suggest that on a national scale, unreported or incorrectly reported property transactions could potentially exceed Rs 7.5 lakh crore, highlighting a widespread issue that demands urgent corrective measures.
Non-Intrusive 'Nudge' Approach Precedes Enforcement
Before initiating formal legal proceedings, the I-T department employs a 'Nudge' strategy—Non-intrusive usage of data to guide and enable. This involves alerting taxpayers via email about discrepancies in their filings and encouraging voluntary revision of returns. "Action follows only if they fail to respond or revise the tax returns," clarified an I-T official, emphasizing a cooperative compliance framework.
Government and Departmental Initiatives to Curb Evasion
While cooperative banks and financial institutions also exhibited some level of non-compliance, discrepancies were most pronounced in tehsil offices. In response, the I-T department is actively engaging with these offices to ensure accurate PAN reporting for robust compliance checks.
In a proactive move, the Haryana government issued directives in January, instructing all deputy commissioners to ensure immediate submission of pending PAN details in property registrations. Tehsildars were specifically tasked with verifying records and clearing pendency on a priority basis, with particular focus on Gurgaon and Faridabad.
To further prevent tax evasion, the I-T department has mandated tehsil offices across the state to collect the Specified Financial Transaction Statement (SSFT) from parties involved in property transactions exceeding Rs 30 lakh during document registration. Submission of SSFT to the I-T department is obligatory under Section 285BA(1) of the Income Tax Act, 1961, reinforcing legal accountability.
