The Benami Transactions (Prohibition) Amendment Act 2016, which was passed by Parliament in August this year, has come into effect.
The Act was designed to curb black money and the latest amendments are aimed at giving the Act some teeth in terms of legal and administrative procedure.
The extant Benami Transactions (Prohibition) Act is all set to be renamed as the Prohibition of Benami Property Transactions Act (PBPT Act).
What are Benami Transactions?
Benami Transactions refer to those transactions wherein a property is held by or transferred to a person which has been provided by or paid by another person.
It also includes property transactions where
1) A transaction has been made under a fictitious name
2) The owner is not aware or denies knowledge of the ownership of the property
3) The person providing the property is untraceable.
The person on whose name the property was purchased is called the ‘benamdar’ and the property so purchased is called as benami property. The person who finances the whole deal is the real owner.
Here’s a list of important features of the Act:
- Under the Act the real owner cannot recover the benami property held by ‘benamdar’
- The government can confiscate benami properties without paying any compensation
- The government has given only four authorities the right to conduct investigation into the matter; they are the Initiating Officer, Approving Authority, Administrator and Adjudicating Authority
- Indulging in benami transactions can lead to up to seven years of imprisonment and fine
- Providing incorrect information is punishable by imprisonment of up to five years and fine
- Initiating Officer may pass an order to continue holding the property and may then refer case to Adjudicating Authority
- After examining evidence the Adjudicating Authority may pass an order
- Appellate Tribunal will hear appeals against orders of Adjudicating Authority.
Source: India Today