Supreme Court mandates reporting of cash transactions over ₹2 lakh in property deals

In a ruling aimed at curbing black money in real estate transactions, the Supreme Court of India directed that all property deals involving cash transfer of ₹2 lakh or more must be reported to the Income Tax Department.

The ruling, delivered on April 26, 2025, emphasizes that by law, sub-registrars must inform the I-T department whenever cash payments over ₹2 lakh are mentioned in sale documents.

The apex court further ruled that if the department finds out about the unreported transactions during searches, assessments, or through other sources, it must notify the Chief Secretary of the concerned State or Union Territory.

The Registrars of High Courts, Chief Secretaries of all States and UTs, and the Principal Chief Commissioners of Income Tax have been ordered to communicate the ruling to district judiciary, registration officials, and tax officers to ensure proper compliance and facilitate regular audits.

As per the judgment, any document involving transfer of immovable property, which mentions ₹2 lakh or more in cash as consideration, must be flagged by the authorities. They are also expected to provide full details, including:

• Nature of the document
• Amount
• Details of buyer and seller

Failure to comply with these instructions could result in serious administrative consequences, as per the apex court.