Govt offers scope to legalise undisclosed property investments

The government has proposed allowing taxpayers to legalise undisclosed funds invested in land, buildings and apartments by paying applicable taxes, according to the FY2026-27 budget proposal.

The government has proposed a new provision enabling individuals to legalise undisclosed investments in land, buildings and apartments through voluntary disclosure and payment of prescribed taxes.

Under the proposed Finance Bill, taxpayers who declare previously undisclosed investments or property transactions and pay the required taxes will not face questions or legal action regarding the source of those funds.

If the actual purchase price of a property exceeds the value declared in the registration deed, the taxpayer will be required to pay income tax on the undisclosed amount at the regular applicable rate. Similarly, undisclosed gains from property sales will be taxed at the prevailing capital gains tax rate.

However, taxpayers against whom legal proceedings have already been initiated under the Income Tax Act before making a disclosure will have to pay an additional 20 percent tax or penalty on the undisclosed amount.

The proposal also bars individuals convicted of criminal offences or those currently facing criminal cases from availing themselves of the facility.

Tax experts say such measures may help increase short-term revenue collection but could raise concerns about fairness for compliant taxpayers and potentially limit the scope of investigations into undisclosed wealth.

The proposal was included in the FY2026-27 national budget presented in Parliament by Finance minister Amir Khosru Mahmud Chowdhury on Thursday.

TZ