Indian Government has taken one more steps to curb black money in India, this time people doing Benami transactions are targeted.
"Benami Transaction" means a transaction or an arrangement where a property is transferred to, or is held by, a person called "Benamidar", and the consideration for such property has been provided, or paid by, another person and such property is referred to as "Benami Property".
In August 2016, Parliament had passed the Benami Transactions (Prohibition) Act, with the assurance from Finance Minister Arun Jaitley. The rules and all the provisions of the Benami Transactions (Prohibition) Act came into force on November 1, 2016 and the existing Benami Transactions (Prohibition) Act, 1988, was renamed as the “Prohibition of Benami Property Transactions Act, 1988”.
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.
The gist of new legislation of Benami Act is highlighted as below:
- In case of the offence of benami transaction, the guilty person shall be punishable with rigorous imprisonment for a term one to seven years and shall also be liable to fine up to twenty-five percent of the fair market value of the property.
- Every suit or proceeding of a benami transaction pending in any Court (other than a High Court) or Tribunal or before any forum on the date of the commencement of this Act shall stand transferred to the Adjudicating Authority or the Appellate Tribunal, as the case may be, having jurisdiction in the matter.