Why parking black money is risky business
Wondered if the realty sector is safe for parking black money? Think again, for more and more cases are coming to light of people losing everything in dubious deals. Taking the legal route out does not work.
Atul Sinha (name changed) invested ₹ 3crore in cash for a assured returns scheme in a residential project. The developer, who Sinha met through a close friend, even gave him a written and signed acknowledgment slip for the investment. A few months later, when the developer failed to pay him, Sinha protested but could not take any legal action because it was difficult for him to prove his own source of income. “I put pressure on the developer through some police officials who were my friends but that didn’t help. The developer said he had lost a lot of money in business and could not make payments. I can’t take him to any court because I will have to prove how I got the money,” says Sinha.
According to many real estate brokers, transacting in cash is risky business. In many land deals and apartment sales, people are duped because they want to evade tax or duties and accept or pay huge amounts in cash. “In one of the cases, fake notes were handed to a seller by a homebuyer and he couldn’t do anything. You can’t expect legal help for an illegal transaction,” says a property dealer.
According to Neeraj Sinha, a Delhi-based charted accountant, “It’s better for people to pay penalty and tax to the income tax department to get their money converted to white instead of investing it in real estate.”