Must Knows

Plea to link property with Aadhaar: HC seeks UIDAI’s response

[] The Delhi HC has sought the response of the UIDAI, on a plea seeking linking of movable and immovable property documents of citizens with their Aadhaar number

The Delhi High Court, on October 15, 2019, sought the response of the Unique Identification Authority of India (UIDAI), on a plea seeking linking of movable and immovable property documents of citizens with their Aadhaar number, to curb corruption, black money generation and ‘benami’ transactions. A bench of chief justice DN Patel and justice C Hari Shankar issued a notice to the UIDAI, which issues the 12-digit unique identification number called Aadhaar and sought its response in the matter before November 20, 2019, the next date of hearing. The court also asked the centre and the Delhi government to file their response, which they had not, despite the issuance of a notice to them on July 16, 2019.

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The Authority was impleaded in the petition by BJP leader Ashwini Kumar Upadhyay, after it moved the court seeking to be heard in the matter. Upadhyay, also a lawyer, in his plea has said it was the duty of the state to take appropriate steps, to curb corruption and seize ‘benami’ properties made by illegal means, to give a strong message that the government was determined to fight against corruption and black money generation.

(With inputs from PTI)

How will the linking of Aadhaar with immovable properties impact the property market?

What will happen if the government mandates the linking of Aadhaar numbers with immovable properties? We examine how it will affect property owners and whether it will clean up benami transactions

February 8, 2019: Whether it is your bank account, life insurance policy, mutual fund investment, demat account, or mobile connection, linking them with one’s Aadhaar number, is becoming all pervasive. The government, in a bid to deal with the menace of corruption and black money, has hinted that it may consider linking immovable properties with Aadhaar numbers, as well. If such a move is implemented, it will have widespread ramifications and make the implementation of the benami transaction law easier. The Benami Transaction Act was notified in November 2016, at almost the same time as the announcement of the demonetisation drive. This law is administered by the Income Tax Department. After the benami law came into force, the I-T Department has attached around 475 properties worth Rs 1,600 crores, till date.

Read also : Mortgagor: Meaning, rights and liabilities of a mortgagor

The benami transactions law has wider ramifications for real estate investments, than other investments. The requirement to link your Aadhaar number with your immovable property, may cover the transactions of registrations that are undertaken after the law comes into force. It may also require the furnishing of the Aadhaar number, for immovable properties already owned by you.

In fact, Maharashtra has announced that homebuyers who would use their Aadhaar Card for property registration would not have to produce two witnesses to carry out the transaction. Those who appear at the sub-registrar’s office without the Aadhaar Card would, however, have to come along with two witnesses.

Impact of requirement to quote the Aadhaar number, at the time of registration of the property

Once the requirement of quoting Aadhaar number for registration of new immovable properties comes into operation, the practice of buying and registering any immovable property in the name of any person who does not fund the purchase the property, will come to a halt. Moreover, the practice of buying immovable property in fictitious names, will also come to an end. In case someone still attempts to do the same, this will be detected by the I-T Department, sooner rather than later. With the increased use of technology and the all-pervasive nature of Aadhaar, the I-T Department will be in a far better position, to verify whether the person in whose name the property is purchased, has income commensurate with the investments in property standing in his name.

[] Will Aadhaar linkage reduce benami property transactions?

Since all immovable properties will be mapped with Aadhaar numbers, in case more than one property is purchased by a person, it will also be detected and make the task of the I-T Department easy, in detecting tax evasion through benami transactions in real estate. The use of black money may reduce due to this requirement, as only the person who has the funds will be able to buy the property. Hence, real estate prices will become stable and the abnormal volatility/speculation in prices, will reduce.

Impact of requirement to furnish Aadhaar number, for properties already registered and purchased

In due course, the government may mandate all the legal owners of immovable properties, whether land or building, to furnish their Aadhaar number to the office of registrar, where the properties are registered. When all the data are collated and analysed with the help of technology, it will be easy for the I-T Department to detect investments made in benami or fictitious names, based on the PAN number, which is already linked to the Aadhaar number.

Read also : Income tax benefits on rent paid

With the linking of bank accounts, mobile connections, investments and PAN card to the 12-digit Aadhaar number, the government will be able to use advanced data mining techniques, to find out inconsistencies and proceed with the properties, which are not mapped with any Aadhaar number. This will mostly happen, in the case of properties purchased in fictitious names.

Since the provisions of the Benami Transactions Act, provide for treating the transfer of such property as void, the beneficial owners (the person who has provided the funds to buy the property) will not be able to claim the property from the benamidar (the person in whose name the property is purchased). These moves will ensure that the use of black money in the real estate is reduced significantly.

It will force people to buy properties in their own names, rather than in the name of fictitious persons or some benami name.

The income tax laws also requires you to offer notional rent on all the properties owned by you, except one which can be treated as self-occupied. This requirement is often not followed by tax payers. Linking of Aadhaar, will also ensure that the income earned from such properties is disclosed in the income tax returns, thus, enhancing the collection of direct taxes.

(The author is a tax and investment expert, with 35 years’ experience)

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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