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Aadhar linkage to property records - Remedy to the sector

Monday, December 04, 2017
By Dr. Niranjan Hiranandani

Dr. Niranjan Hiranandani, President, NAREDCO National

In a move aimed to curb use of black money in the property transaction, Modi led govt took a bold step of Demonetization a year ago. This reminded me of several measures planned to be undertaken by the government to suck out black money out of the sector. In the fight against black money, govt then considered of linking Unique Identification Number (Aadhar card) with the property transactions. The move will surely help to bring in transparency and crack down on Benami properties.

The government’s move to link real estate transactions with Aadhaar began in states where e-registration of documents relating to property transactions had been made mandatory. For property-related deals, be it a plot of land or an apartment, registration of the deal requires identification of the parties involved. With e-registration being made mandatory in various states including Maharashtra, it seemed a logical move to bring in the Aadhar Card as the identity document; given the perception that it enjoys an advantage over other documents as regards verifying identity.

The Modi Government has been working towards a regulatory compliance regime for real estate, which is all about a process that brings in accountability, is transparent and also RERA compliant. It seeks to ensure that all stakeholders in real estate follow efficient, effective, and ethical business practices, while GST seeks to bring in a single rate of tax across the country. Ensuring that no one uses fake identification or duplicate documents for identity purposes is sought to be regulated by the Aadhaar system, which primarily is about a unique identity for each citizen. The Benami Properties Act was the first step in a process which began with Demonetization includes GST, RERA and further, goes through Aadhaar. Essentially, it is largely about identifying the individual who is party to the transaction; the other aspect is about linkage of the Aadhaar id with the PAN id for transactions – the obvious idea being to curb tax evasion, as also ensuring that the identity mentioned in the property documentation is the correct one.

The government’s thoughts about linking Aadhaar with property and land deals is something that has been spoken about since quite some time now.By linking Aadhaar to properties, the government can monitor the property transaction between two parties and curb registration of properties under others' names to park black money.  

We need to also keep in mind that linkage of Aadhaar to various government schemes and usage for identification has generated some debate. Legal action in form of petitions against the Aadhaar linkage is pending before courts.  Obviously, this is a point that will have to be kept in mind when the aspect of linking Aadhaar with property and land deals is taken up by the government.

Having said this, the Indian economy as also Indian real estate is undergoing a paradigm shift, with reformation acts like Benami Property Act, RERA and GST. We are witness to reforms aimed at a structured and transparent real estate industry, with a similar aspect when it comes to easy ways of doing business. Given this, Aadhar card should turn out to be one of the most effective ways of ensuring the authentic identification of parties involved into a property deal. The other advantage of linking real estate transactions with Aadhaar is to encourage digital transactions of land record under Digital India Land Records Modernization program (DILRMP).Hence, the move is welcomed and encouraged for the healthy environment of the sector and make it consumer friendly.

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