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Tuesday, December 27, 2016

Benami Property? All you should know

The Prime Minister Narendra Modi is all prepared to take on the 'benami' properties to curb black money and the corruption in the country.
As we all have listen in his last Mann Ki Baat of this year, the PM Modi has said the government will soon implement a law effectively to deal with the benami properties. Just like the demonetisation we will strongly act against 'benami' properties. Only the demonetisation is not enough to curb black money and to end courruption in the country. He said after the demonetisation the next target will be 'benami' property.

What are benami property?
Benami according to its hindi pronunciation, it means without name. A property which is bought by an individual, not under his or her name, in the name of others. If anyone buy property in the name of others, the name on whose the property has been purchased is known as benamdar and then the bought property is known as benami property. The person who finances the deal is the real owner of that property and the transaction used in the deal become benami transaction.

It has become usual practice that the people invest their black money in benami property direct or indirect to evade taxation. Therefore it is very hard to trace the real owner of these properties because of fake name and identities used in the deal.

As for as the benami transactions is concern if anyone buy, any kind of assets like - movable, immovable, tangible, intangible, any rights or interest, or legal documents, the transaction involved in this deal become benami transaction.

How any property can be Benami Property
1. If any Property purchased in the name of spouse or child and for which a known sources of income is used to paid out the deal amount.

2. If any joint property with brother, sister or other relatives is purchased and for which the deal amount is paid out through known sources of income.

3. Property held by someone in a fiduciary capacity

If anyone buy a property in name of parents, may be too, can be declared as benami.

What is the provision in the Benami Act?
The government has ammended, the existing Benami Transactions (Prohibition) Act 1988 and has came into effect from 1st November, 2016 and the new law has been renamed as Prohibition of Benami Property Transactions Act, 1988 (PBPT Act).

The Finance Minister Arun Jaitely have given assurance in the parliament that the genuine religious trusts would be kept out of the preview of the new legislation.

The highlights of the Act :
* If anyone indulging in benami transaction it will be punishable by Imprisonment and fine.

* If any properties held benami are liable for confiscation by government without compensation.

* The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner.

* Initiating Officer may pass an order to continue holding the property and may later refer case to Adjudicating Authority

* Adjudicating Authority will then examine evidence and pass an order 

The affect of Benami Transaction on the common people.
The people who evade tax invest their accumulated illegal money in benami properties rather than hoarding the black money in cash. This kind of work affects the government revenue generation that hamper growth and development of the country. 

As we all know the percentage of tax prayer is very low in the country, because of this the government fails to successfully implement the policies and the schemes for the development of the country due to lack of resources.

Keeping this in mind the government has ammended the existing law into new law with more tough provision to curb the black money and to end overall corruption in the country. The PM Modi's next move is to srike on Benami Property as he said in the last Mann Ki Baat.

The PM Modi has also insisted that if necessary more tough law against benami properties can be introduced to curb the black money and end corruption.

All it is being done to curb the black money and to end corruption. It is now sure that the people with unaccounted income will have a tough time ahead. As for the general public is concern, it won’t be much of an issue if their transactions are legal.

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