transactions in the property sector, were executed using black money, according to Liases Foras, a consultancy.
Real estate accounts for more than a 10th of India's $1.85 trillion economy.
The government says black money, a term widely used in India to describe undeclared funds, often meant to avoid taxes, can be present in every stage of a project from land acquisition to home sales.
For the purchaser of a 5 million rupee home like those in Ulwe, a developer might typically ask for 1.5 million rupees in cash while making out a sales agreement for 3.5 million.
With banks willing to lend up to 75-85 percent of the official sale price, the buyer will then need to fund anything from 45 to 60 percent of the total cost from savings, which is difficult for many salaried, middle-income househunters.
It is unfair on the buyers, said Kolhapure, who has put his search on hold in the hope of a price correction that will help him afford a home for his family of five.
If the bill comes into force it might go some way in solving Kolhapure's problem.
The draft says developers will have to get accreditation for projects from the regulator, make public disclosure of details including the price of units, and maintain a separate bank account for each project to collect payments from buyers.
However, there is widespread cynicism about whether it can stamp out the practice given the belief that a large share of illicit money sloshing around the sector is tied to politicians.
There can't be a legal measure to put an end to black money ... because ultimately it ends up in the political cycle. That is where the requirement is, said a Mumbai-based income tax official who did not wish to be named.
Allegations last month of improper dealings between the son-in-law of ruling Congress party chief Sonia Gandhi and DLF , India's biggest property developer, underline the perception of a nexus between developers and politicians.
Activist group India Against Corruption accused DLF of arranging favourable loans and real estate transactions for Robert Vadra, a businessman married to Gandhi's daughter, who had previously announced a possible