Black money refers to money removed from the official economy (via corruption, bribery, tax evasion, etc.) and stored in terms of cash within or outside of the country. Any monetary transaction which is done in cash and not shown officially on any documents is source of generation of black money.
Real estate is market in which sources confirms that 50 % business are done in cash. Most of real estate developers do so in order to save tax which is actually wrong. If you try to approach any builder they will say openly that terms of payment will be 40 % in while 60 % in black like that. Unfortunate No transparency exists in real estate market. Some of developer still prefers to have 100% white money transaction but that are only few sinababy.
I follow passionately, on corrupt people in India parking their lot of unaccounted money in to real estate market, thus real estate has become most popular parking place for all illegal wealth. Due to lot of black money price of land (agriculture, industrial and residential) purpose has shoot up like anything causing inflation in real estate market. Price has gone up in manner that you could not judge that it is real price or speculation. There are multiple reasons of asking black money during property deal:-
1. As per process builder/developer has to take approvals from different agencies in government/municipality at each sate malpractice/ bribery is involved, which cause builder to pay money in cash to get approval for project. Builder is passing on this burden to customer.
2. In order to save Tax and hide white transaction seller is asking for black money.
3. Builder/Developer has to make payment to other supplier like cement, steel building material supplier in cash which force builder to ask black money.