The Income Tax Department has flagged over ₹10,978 crore in property transactions for compliance gaps across five border states, with Uttar Pradesh accounting for the largest share at ₹4,081 crore.
More than ₹10,000 crore worth of real estate transactions across five border states have come under Income Tax Department scrutiny for suspected under-reporting and compliance gaps, according to sources cited in an NDTV Profit exclusive report. Worth being upfront about the sourcing here, this is based on "highly placed sources" rather than an official CBDT press release, and no other outlet appears to have independently corroborated the specific figures yet, so treat the numbers as reported rather than formally confirmed.
The analysis covers Uttar Pradesh, Rajasthan, Gujarat, Bihar and West Bengal, relating to FY25-26. The department identified 14,743 property transactions carrying compliance gaps, including 2,552 that weren't reported at all. Breaking down the value, ₹9,350 crore relates to defective filings, ₹1,628 crore comprises unreported transactions outright, and a further ₹63 crore in cash tied to property deals wasn't disclosed. The gaps themselves span several categories, non-reporting, incorrect PAN details, under-reported transaction values, transactions logged in the wrong fiscal year, and undisclosed cash components.
Among the five states, Uttar Pradesh accounts for the largest flagged value by far, ₹4,081.27 crore, nearly 1.5 times Rajasthan's ₹2,694.62 crore, the next-highest state. Gujarat follows at ₹1,795.65 crore, Bihar at ₹1,472.81 crore, and West Bengal at ₹554.15 crore. Given how much of our own coverage this year has focused on UP-RERA's own numbers, both the state's approval volumes and its investment figures, this scrutiny exercise is worth reading as a separate, tax-focused lens on the same broad market, not a comment on any specific NCR micro-market's legitimacy.
Beyond flagged transaction values, the report highlights something structurally interesting, cash activity relative to actual tax paid runs dramatically higher than the national benchmark across all five states. Uttar Pradesh's cash deposit-to-tax ratio stands at 21.38 times, against a pan-India benchmark of just 2.5 times, and its cash withdrawal-to-tax ratio sits at 15.6 times versus a national 0.74 times. Assam posts a deposit ratio of 17.31 times and withdrawal ratio of 16.76 times.
West Bengal, Gujarat and Bihar all show similarly elevated ratios, every one of the five states sits well above the national benchmark on both measures. A higher ratio essentially means cash movement in a state is running far ahead of what its tax base would predict, exactly the kind of gap that draws regulatory attention.
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The findings are feeding into a broader CBDT push to tighten compliance in border regions specifically, according to the same sources. The plan includes expanding scrutiny down to the district level and coordinating with the RBI, SEBI, the Financial Intelligence Unit-India, the Ministry of Corporate Affairs and the Enforcement Directorate on high-risk cases. The department also intends to cross-check income tax returns, TDS records, specified financial transactions, banking data and international data to surface further discrepancies.
Given how much of our own reporting this year has centred on verifying developer registration, RERA status and construction progress, this is a useful reminder that compliance risk in a property transaction doesn't stop at the developer's paperwork, a buyer's own reporting and payment trail matters just as much, particularly the cash component of any deal.
Anyone transacting in a state flagged this prominently, Uttar Pradesh especially, given how much of Hommea's own coverage centres on Noida and Greater Noida specifically, would do well to ensure every part of a transaction is properly documented and reported, rather than assuming a registered project alone is sufficient protection against this kind of scrutiny.
