What is benami transactions Bill and why the poor needs to worry
In today’s Mann ki baat the PM said, India shall emerge as a new power; corrupt people are still trying to find a way out. They are trying hard to bring black money into system. Corrupt are trying t make poor as tool to park black money. They are trying to lure the poor; they are trying to put black money in their accounts. I want to caution these people, Please do not play with the lives of the poor. Do not put names of poor in record to hide black money. We have made a tough anti-benami transaction law.
The Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in Lok Sabha on May 13, 2015. The Bill seeks to amend the Benami Transactions Act, 1988. The Act prohibits benami transactions and provides for confiscating benami properties.
The Bill seeks to:
- amend the definition of benami transactions,
- establish adjudicating authorities and an Appellate Tribunal to deal with benami transactions,
- Specify the penalty for entering into benami transactions.
Recently the President of India, Pranab Mukherjee has given assent to the Benami Transactions (Prohibition) Amendment Act, 2016 and it has been notified by the government, officials said on Tuesday.
How a property becomes benami
The law has strict provisions preventing and confiscating benami properties A transaction Is defined as benami where a property is held by or transferred to a person, but has been provided for or paid by another person.
The Bill amends this definition to add other transactions which qualify as benami, such as property transactions where:
- The transaction is made in a fictitious name,
- The owner is not aware of denies knowledge of the ownership of the property
- The person providing the consideration for the property is not traceable.
How someone can be considered out of the benami Act
The Bill also specifies certain cases will be exempt from the definition of a benami transaction. These include cases when a property is held by:
- A member of a Hindu undivided family, and is being held for his or another family member’s benefit, and has been provided for or paid off from sources of income of that family;
- A person in the name of his spouse or child, and the property has been paid for from the person’s income; and the Bill defines benamidar as the person in whose name the benami property is held or transferred, and a beneficial owner as the person for whose benefit the property is being held by the benamidar.
What happens if someone has benami property and is caught?
As per the act, re-transfer of Benami property is now not allowed. However, the act also clarifies that those declaring Benami property under the Income Disclosure Scheme of 2016 will not be acted against. However, the central government can confiscate Benami property.
If someone is found entering into a Benami transaction can be imprisoned for a minimum one and a max of seven years. He/she can be fined up to 25 per cent of the fair market value can also be slapped.
If caught providing false documents or information, one can be jailed for a term ranging between 6 months and 5 years. They can also be fined 10 per cent of the fair market value of the property.