How to reduce black money in property deals
I made some angry tweets about black money in property deals, and Aam Aadmi Party supporters (predictably) asked me to make a suggestion on how to deal with the issue, and if it was useful, the party could adopt it.
Here is what I said:
Black money is such a tamasha. No one talks about every person who owns a home paying for part of it in black. Nationwide. Not even AAP.
Stand on road. Look at the buildings. Think of the flats in each. Now think area, district, state, country. That is how much black money.
No need to go to Switzerland. Every land records office has records of deals done. The white part is right there on paper.
Well, I don’t see what is so difficult. It is far more difficult to nab your bribe taking cops, which Aam Aadmi Party has done by pretty much turning citizens and their phones into walking sting operations.
Should not be so tough to wipe out black money in property deals.
The main reason for black money in property deals is to save money on tax. The amount of tax should be reviewed. If it is appropriate, so be it. If not, it should be reduced.
Then turn the whole thing into a sting operation. Flat sales can’t exactly be secret. So monitor the property records – the biggest source for a list of deals happening. Offer rewards to whistleblowers where cases get proved right – a percentage of the black money equivalent to whatever the tax amount is. Don’t get into major punishments and court cases and such. If investigations find that the flat has been purchased/sold for more money than stated on paper, have a procedure in place.
Offer violators the money they paid on paper and confiscate the flat. The end. If they were honest and didn’t do corruption, they may get hassled, but at least they don’t lose their investment. The corrupt lose the black money they invested. The state gets concrete assets that can be auctioned instead of long drawn court cases and people trying to apply influence or media pressure and what not.
Offer a date by when people who have already done their flat deals with black money before the new procedure kicks in can declare them and pay the difference in tax owed to the state. After that, it is open season on them too.
Or some variation thereof. With so many bureaucrats, AAP may even come up with something more effective.
Kitna paisa aayega to the state? How come no one speaks of this? Because it is an “everyone does it” wala cheating of the state. The idea is that the state gets some amount, right? Paid “just” a little less after spending so much on home. Real estate is so expensive these days. Got to save where you can, etc.
But it is black money. It is money owed to the state that is getting cheated. You are fighting to strengthen the state, then we all must pay. If it is too expensive to pay taxes on whole amount, then reduce the tax, but the deals must be transparent and dues paid. Simple.