Benami Property Bill Highlights
It is a proven fact that black money and corruption hampers development and growth of the nation. The government of India is adamant to curb black money and all set to take on Benami properties.
A major step towards eradicating black money, a Benami property bill was introduced in Lok Sabha in May 2015 which sought an amendment to Benami Transaction Act, 1988. The bill included an amendment to the definition of Benami transactions, establish authorities to deal with Benami transactions and specify penalties for such transactions.
The bill seeks to empower the government to confiscate the property found as Benami.
In accordance with the bill, the New Benami Act has been put into effect from November 1, 2016. The act prohibits illegal Benami transactions. It defines Benami property transactions and penalties for it. Those found guilty under the act can be punished with up to seven years of the bill also seeks to cover the movable and immovable property.
What is called Benami Property?
A property is considered Benami property if:
- A person pays for the property but doesn’t buy it in his/her name in order to get some direct or indirect financial benefit.
- The property is purchased by a fictitious name.
- An owner of the property denies any knowledge of the ownership of the property.
- A person who made a transaction of the property can’t be traced.
Assets such as any movable or immovable property, any right, interest, legal documents, gold, financial securities can be considered as Benami.
What are the actions taken by the person having Benami property?
According to Benami transaction act, to hold Benami property is strictly illegal and stringent punishments are there if caught under the Benami Act.
If some suspicious transactions are found, first an investigation is made by authorities that include initiating officer, approving authority, administrator and adjudicating authority. They collectively make inquiries at different levels. The respondent will have to face trial in special court. If proved guilty, penalties can be imposed.
The penalties may include:
The Benami property may be confiscated by the government.
The person proved guilty for holding Benami property may be imprisoned and the imprisonment can be from 1 to 7 years. In addition to that 25% fine at the market value of the property may have to be paid.
If the Benami property holder, once identified, provides false information to the investigating authorities, he may be sentenced to additional imprisonment of 6 months to 5 years. Moreover, 10% fine of the market value of the property is to be paid.
It is wise to declare Benami transactions and stay away stringent punishments. The government has launched voluntarily income disclosure schemes; you can make disclosure under the scheme. Moreover, by doing so, you won’t lose your property, respect and live in peace!
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