- The Benami Transactions (Prohibition) Amendment Act will come into force on November 1, 2016.
- Following this, the existing Benami Transactions (Prohibition) Act will be renamed as the Prohibition of Benami Property Transactions Act (PBPT Act).
About the Act:
- “The PBPT Act defines benami transactions, prohibits them and further provides that violation of the PBPT Act is punishable with imprisonment and fine.
- “The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner.
- Properties held benami are liable for confiscation by the Government without payment of compensation.”
- According to the new law, people caught with ‘benami’ properties could serve up to seven years of rigorous imprisonment and have to pay a significant fine.
- Additionally, the properties will be confiscated.
- Under the Act, a transaction is named ‘benami’ if property is held by one person, but has been provided or paid for by another person.
- A person could also face rigorous imprisonment for up to five years for knowingly giving false information and will have to pay a fine of up to 10 per cent of the market value of the property.
- The PBPT Act provides for the creation of an appellate mechanism called the Adjudicating Authority and Appellate Tribunal.
- “A Joint/Additional Commissioner of Income-tax, an Assistant/Deputy Commissioner of Income-tax and a Tax Recovery Officer… have been notified to perform the functions and exercise the powers of the Approving Authority, Initiating Officer and Administrator, respectively under the PBPT Act.
Source: The Hindu