Income Tax Department Uncovers Major Property Transaction Lapses Worth ₹5,500 Crore Across Nagpur's Sub-Registrar Offices

The Income Tax Department has revealed significant underreporting of real estate transactions across multiple sub-registrar offices in Nagpur, with officials confirming that property deals worth over ₹5,500 crore have gone unreported despite mandatory filing requirements under Maharashtra regulations.

Widespread Non-Compliance in Financial Reporting System

According to department sources, all property transactions exceeding ₹30 lakh must be reported through the Statement of Financial Transactions (SFT) mechanism. However, the investigation has uncovered systematic lapses in compliance across the region's registration offices.

The probe initially focused on the Hingna SRO, where officials discovered that deals worth ₹2,500 crore had not been disclosed through proper channels. Department insiders revealed that this single office may have left nearly ₹1,000 crore worth of transactions unreported over a five-year period.

Digital System Bypassed Despite New Protocols

Sources within the investigation team indicated that despite the introduction of a digital filing system in FY 2024-25, designed to capture all high-value registrations automatically, some SROs appear to have manually filtered submissions. This practice allegedly excluded significant transactions from official records.

Officials noted that additional cases have emerged, with one instance showing ₹100 crore in property deals being omitted from reports. In approximately a dozen high-value deals alone, around ₹50 crore remained unreported, according to departmental findings.

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Systemic Red Flags Trigger Expanded Investigation

Department analysts explained that the mismatches were flagged when they noticed sharp drops in reported monetary values despite rising deal volumes. This discrepancy spawned suspicions of intentional suppression of transaction data.

The probe has since expanded to cover at least four more SROs in Nagpur, with the Intelligence and Criminal Investigation wing orchestrating a comprehensive audit across the region. Officials confirmed they are working to capture missing SFT data while considering penalties or prosecution for identified discrepancies.

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Tax Evasion Implications and Regulatory Response

Department officials highlighted that unreported deals allow buyers or sellers to avoid recording capital gains, effectively evading tax liabilities even when transactions involve legitimate bank transfers. Public petitions have revealed that approximately 20% of tax evasion cases relate to undeclared property transactions.

The revelations have exposed significant cracks in the SFT mechanism and the digital compliance system intended to safeguard transparency in real estate dealings. Authorities are now ensuring strict compliance while weighing appropriate legal action against those found negligent.

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Wider Implications for Real Estate Sector

The escalation of this probe reflects growing concerns about organized tax avoidance and potential real estate syndicates operating within the system. Officials indicated that the investigation's scope may expand further as more discrepancies come to light.

Industry observers noted that these developments could impact future property registration processes and may lead to stricter oversight mechanisms across Maharashtra's real estate sector.

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