Rigorous imprisonment of up to seven years for benami transactions

The Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in Lok Sabha on May 13, last year by Finance Minister Arun Jaitley.

By: PTI | New Delhi | Published: August 16, 2016 4:06 pm
Minister of State for Finance Santosh Kumar Gangwar said that while there is no official estimation regarding black money of Indians stacked in Swiss banks, he cited media reports saying that money held by Indians in Swiss banks has fallen by nearly one-third. The benami law has strict provisions to confiscate benami properties. (File)

People keeping ‘benami’ properties to evade taxes will get up to seven years rigorous imprisonment and fine, as per a new law aimed at checking black money in real estate sector.

President Pranab Mukherjee has recently given assent to the Benami Transactions (Prohibition) Amendment Act, 2016 and it has been notified by the government, officials said on Tuesday.

The law has strict provisions to confiscate benami properties and stiff penalty for entering into such transactions, they said. A transaction is considered as benami (meaning nameless) where a property is transferred to or is held by a person and the consideration for such property has been provided or paid by another person.

In these cases, the property is held for the immediate or future benefit, direct or indirect, of the person who has provided its payment.

The Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in Lok Sabha on May 13, last year by Finance Minister Arun Jaitley. It was then referred to the Standing Committee on Finance which gave its report on April 28. Lok Sabha passed the bill on July 27 and Rajya Sabha gave its nod on August 2.

As per the new law which has amended Benami Transactions Act of 1988, whoever is found guilty of the offence of benami transaction shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to seven years and shall also be liable to fine which may extend to 25 per cent of the fair market value of the property.

Under the old law, the penalty for entering into benami transactions is imprisonment up to three years, or a fine, or both. The Act also has a provision of penalty for providing false information.

Any person, required to furnish information under this Act, knowingly gives false information to any authority or furnishes any false document shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine which may extend to 10 per cent of the fair market value of the property, the law said.

Also read: Benami law: Don’t give us a chance to use it, warns govt

However, no prosecution shall be instituted against any person under this law without the previous sanction of Central Board of Direct Taxes. The new law will check domestic black money especially in real estate sector, officials said.

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The legislation has provision for setting up of an authority as “Administrator” which shall have the power to receive and manage the benami property confiscated under the Act.

The new Act mandates central government to designate one or more courts of Session as Special Court for trial of offence punishable under it.

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  1. G
    G C
    Nov 13, 2016 at 11:41 am
    GC SUNEERlt;br/gt;lt;br/gt;In my opinion ,this law is very very useful in country like ours wher a potion of more 65 % bound to live their life on an expenses of less than rs 26/- per day. Almost all who have the properties in our country know that the properties r changing hands in the legal consideration of 5 to 10% of actual s price of the properties specially in un authorized colonies ,sub urban cities, and farm land and Industrial areas specially in so called SSI sector. This situation should be changed. Properties should be allowed to be sold online only through exchange like NSE,BSE,MCX in the manner as the shares, commodities are sold. G C Suneer
    (0)(0)
    Reply
    1. G
      G C
      Nov 13, 2016 at 11:40 am
      In my opinion ,this law is very very useful in country like ours wher a potion of more 65 % bound to live their life on an expenses of less than rs 26/- per day. Almost all who have the properties in our country know that the properties r changing hands in the legal consideration of 5 to 10% of actual s price of the properties specially in un authorized colonies ,sub urban cities, and farm land and Industrial areas specially in so called SSI sector. This situation should be changed. Properties should be allowed to be sold online only through exchange like NSE,BSE,MCX in the manner as the shares, commodities are sold. G C Suneer
      (0)(0)
      Reply