The Income Tax Department is preparing a drive to urge landowners who entered into joint development agreements (JDAs) but did not pay capital gains tax to settle their dues voluntarily. Sources revealed that in Kolkata and Bengaluru alone, around 25,000 to 30,000 such entities have been identified, with other major cities, including Delhi, also under scrutiny.
Joint development agreements are arrangements between real estate developers and landowners, often involving construction of multiple floors or houses on a piece of land. Under the Income Tax Act, landowners are required to pay capital gains tax on transfers made under such agreements.
The campaign, expected to roll out in the coming days, will involve sending emails and correspondence to identified taxpayers, encouraging them to disclose and pay the applicable tax voluntarily. Government sources stated that the majority of landowners may have missed paying taxes and are likely to comply once notified. For cases from the previous financial years, an additional 25% may be applicable, but voluntary compliance will ensure no penalty is imposed.
This initiative follows the department's increasingly successful "Nudge" strategy (Non-Intrusive Usage of Data to Guide and Enable Taxpayers). In recent campaigns, including one targeting foreign assets and income for FY 2023-24, 12,700 of 19,500 identified individuals revised their returns, reporting additional taxes exceeding Rs 1,000 crore. Similar drives have been carried out for virtual digital assets and HRA exemptions, encouraging compliance without resorting to punitive action.
The new campaign reflects the government's ongoing efforts to improve tax compliance in the real estate sector while offering taxpayers a non-punitive route to clear their dues.
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