BHUBANESWAR/CUTTACK: The Budget proposal to prohibit cash transaction beyond Rs 20,000 for purchase of immovable property is likely to cleanse real estate sector of black money in the twin cities of Bhubaneswar and Cuttack.
Real estate insiders said cheque payment or electronic transfer of money would curtail underhand dealings, as 'unaccounted for cash' rule the real estate market here.
Finance minister Arun Jaitley has proposed to amend the Income Tax Act for the purpose. "It would be a tricky situation and may curb fund flow further," said a real estate developer.
While over dozen developers have come under Crime Branch scanner for dubious land deals in past two years, flow of black money from chit fund and mining to realty was cited as reasons for unexceptionally high cost of housing in state capital.
On record, the developers said it would help bring in transparency. "The move will pin down black sheep in the profession. We welcome it," said president, Association for Odisha Realestate Developers Umesh Patnaik.
National joint secretary, Confederation of Real Estate Developers Association of India, D S Tripathy too welcomed the transparency move. He, however, described the budget as disappointing as the impact of increase in service tax from 12.36% to 14% will raise housing cost. "The Budget, in treating real estate with neglect, leaves the current problems of real estate where they are," he said.
Traders feel the Budget will help check flow of black money in other segments of business as well. Traders at Malgodown, state's biggest wholesale commodity market in Cuttack, said the proposed new law to tackle black money with tough measures will help business to grow in a fair manner.
"The proposed law for imprisonment up to 10 years and 300% penalty on tax for concealing income and assets will go a long away in bringing transparency in any business," said joint secretary, Cuttack Chamber of Commerce, Srikant Sahoo.
Houses worth Rs 25,000 crore are in different stages of construction in Bhubaneswar and its neighbouring areas.
Developers are refraining from new projects with around 30% houses remaining unsold.