Rahul Kumar has just sold his house in Noida in a typical, 60 per cent ‘white’ and 40 per cent ‘black’ deal prevalent in the market. However, sellers like Kumar are tensed due to the banning of ₹1,000 and ₹500 notes, which are typically used in such deals.

The decision will have an adverse impact on smaller and unorganised players, besides impacting the resale property market. Industry players said housing prices could witness downward pressure. “It is a fantastic move and quite a radical one. For the real-estate sector, we believe it will wipe out murky transactions,” said Niranjan Hiranandani, CMD, Hiranandani Developers. According to market estimates, close to 10-50 per cent of the value of the property being bought or sold takes place in cash in India.

“This is a transformational reform by the Modi government. Real-estate transactions in progress and not completed that involve cash will be impacted, leading to complications. This will certainly lead to pain in the realty sector in the short term, but it is a welcome move for the long run,” said Ravi Ahuja, Executive Director, Office Services and Investment Sales at Colliers International.

“Effectively, the primary market will not be very disturbed as the inventory was sold to end users who avail themselves of home loans. Moreover, the organised part of the RE industry has always been compliant and it is only the unorganised fly-by-night players who will be affected. This move will help industry fight more effectively for removal of section 43CA of the IT Act as now there is no reason to charge tax on so called deemed income to both the buyer and seller, post this move,” said Getamber Anand, President, CREDAI.

Anuj Puri of JLL India said: “Before too long, the caricatured version of black money driving Indian real estate will no longer be applicable.”

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