DELHI: Sticking to its poll promise of curbing black money, the NDA government has ensured smooth passage for the Benami Transactions (Prohibition) Amendment Bill, 2015 in both the houses of parliament and has been made effective from 1st November, 2016. Benami, literally means ‘nameless’ or ‘without a name’.
Here are 3 points to remember how the law will qualify a Benami Transaction
1) All property transactions which are made in fictitious name will be qualified as benami
2) Property where the owner is not aware or denies knowledge of the ownership of property is benami
3) And finally, where the person paying for the property is not traceable, will also be a benami transaction
What has given additional teeth to the dormant and ineffective old law (Benami Transactions Act of 1988) are the amendments which now provide for establishing an adjudicating authority to investigate all such transactions. Appeals against any order can be taken up to the Appellate Tribunal.
The new law provides for rigorous imprisonment of one year up to seven years for offenders, and a fine which can extend to 25% of the fair market value of the benami property. It’s not just the direct offenders, the new law can also nab those providing false information with rigorous imprisonment of six months up to five years, and a fine which may extend to 10% of the fair market value of the benami property.
However, the amended law exempts certain cases from the definition of a benami transaction. These include property bought for a member of HUF from the income of that family, property held by a person in a fiduciary capacity and any property bought in the name of spouse or child. The government has also left room for those who want to come forward and voluntarily disclose all such property holdings. Those who do declare their benami properties under Income Declaration Scheme, will get immunity under the Benami Act.