New ‘benami’ Act to take effect from Nov. 1

  • 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

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