In real estate sector apart from delaying in delivery of possession of flats to home-buyers, the Maharashtra Real Estate Regulatory Authority (MahaRERA) would keep an eye on the use of black money in the real estate sector, said an expert.
If builders and homebuyers are alleged of using or investing unaccounted and black money, RERA officials can search and seize such properties, said famous property lawyer Parimal Shroff.
MahaRERA chairman Gautam Chatterjee said that the authority will perform its functions related to seizure and search of properties, where black money is invested only after getting complaints. The Real Estate (Regulation and Development) Act (RERA) has provisions related to breakdown on black money.
“The regulator has been given the power to search and seize properties. It can also check account books of builders,” said Shroff. “Even real estate agents can be summoned to trace the source of black money,” he added.
The Act directs that developers, real estate agents and brokers have to register with the authority. Agents and brokers are not allowed to market and sell any projects until they completely registered with RERA.
Shroff further added that under the RERA the developers have to deposit 70% of the amount collected from the buyer in a separate ESCROW account and he can withdraw part of it depending on the stage of construction.This makes the use of black money in the real estate difficult, he said.
Over the years the black money hoarders have invested in the real estate sector. The developers have used their black money to fund construction. However, with the state government increasing the ready reckoner rates in most places, there seems to be reduction of this black money component.
Another concern for the government is the 12% GST rate. Sceptics believe that to lower their GST burden, home-buyers may pay part of the money in cash. The Benami Transactions (Prohibition) Act, which was enacted last November, to breakdown on black money is also showing results.Till now, the Income Tax department (ITD) has attached 381 properties across the country worth about Rs 1,300 crore.