The Indian government is getting ready to crack down harder on hidden property deals made in someone else’s name. These are transactions where properties are purchased in the name of someone else, often a person with no real financial background, while the true owners remain hidden. Such arrangements are common in slum areas and rural villages, and they not only encourage corruption but also weaken the tax system.
Greater Access to Data
A panel set up by the Central Board of Direct Taxes has suggested that officials should be given wider access to information. Databases linked to Aadhaar, state property registries, and even driving license records could help investigators trace the real owners behind suspicious property purchases. In cases where the actual beneficiary cannot be identified, the law may allow authorities to confiscate such assets.
The Issue of Dummy Directors
Shell companies are still one of the biggest hurdles. They often list dummy directors who exist only on paper and have no real role in the business. These individuals usually do not have any real income, rarely file income tax returns, and sometimes even take loans simply to cover up money trails. By identifying and monitoring these dummy directors more carefully, authorities hope to dismantle networks of hidden ownership.
Aadhaar as a Transparency Tool
Linking financial data with Aadhaar could also make a difference. When details such as bank accounts, property purchases, or even email addresses are connected to Aadhaar, it becomes easier to spot whether the records match. This makes it harder for anyone to hide behind false identities. Privacy concerns are valid, but many experts believe that stronger transparency will benefit the economy in the long run.
Tackling Shell Companies More Effectively
The committee has also recommended fresh measures to keep closer track of shell companies. Real-time monitoring of suspicious financial transactions, greater sharing of property records between states, profiling of certain vault accounts, and even watching cryptocurrency transfers are all being considered. Together, these steps aim to close the loopholes that still allow benami deals to thrive.
A Step Towards Accountability
India’s Prohibition of Benami Property Transactions Act has been in force since 2016, but its impact has been limited due to gaps in enforcement. The latest proposals are designed to plug those gaps and encourage better coordination between agencies.
Finding the Balance
While the government is keen to tighten the law, experts warn that authorities must not be given unlimited powers. The challenge lies in ensuring that genuine taxpayers are protected while those who misuse the system are brought to justice.
If these measures are implemented thoughtfully, they could bring about a major shift in how property ownership is tracked in India and ensure that the real estate sector becomes more transparent and accountable.