The government has decided to involve Aadhaar or unique identification (UID) numbers in property transactions, a move expected to curb fraudulent or benami deals.
To begin with, the urban development ministry will link both Aadhaar numbers and permanent account numbers (PAN) for conversion of properties in Delhi from leasehold to freehold.
This will apply to properties administered under the land and development office (L&DO), a wing of the urban development ministry. L&DO has under it more than 53,000 properties in the capital.
A leasehold gives a person or an entity the right to occupy a property for a fixed period of time, whereas a freehold gives unrestricted ownership of real estate.
“Before the final conversion of the property happens, UID will provide us with complete data for that number and we will match all UID components including fingerprints and iris scans to make sure that the everything matches,” said a government official briefed on the matter, requesting anonymity.
“It will also establish genuineness of ownership of a property, which is difficult otherwise and it will help the ministry in identification of owners,” the official said.
In effect, linking Aadhaar to property conversions has the potential to get rid of benami transactions, or deals where the actual owner fronts an unrelated person as the buyer for reasons such as tax avoidance. There are no accurate estimates on the extent of benami transactions in the country.
“There will be less chances of benami transactions and there will be no scope to use fictitious names as the owner will have to be physically present to verify,” said Sanjukta Bhaduri, professor of planning at the School of Planning and Architecture in New Delhi.
The urban development ministry decided to link Aadhaar numbers to property transactions to ensure that the actual owner is involved in a property conversion, said a second government official familiar with the talks between the ministry and the Unique Identification Authority of India, which is spearheading the project to give a unique identity to every resident of the country.
“The linkage will help in fraud detection and also in fast-tracking the application process of a genuine person. Because, many times, to establish a person’s identity, field verification and other things have to be done, which is a time-consuming process,” the official said.
“Not only will the urban development ministry link the conversion to citing of the UID number, but it will also make the conversion an online procedure,” said the first government official mentioned earlier. “At the time of submitting the application for conversion, the person will have to mention his/her UID number and then only will the ministry begin the procedure.”
Neeraj Bansal, director, risk consulting at KPMG, said linking UID and PAN numbers is a step in the right direction to curb benami transactions. “However, if the government wants to completely eliminate the possibility of benami transactions then they also need to automate land records and put them online,” he said.
Surabhi Agarwal contributed to this story