The original law relating to Benami transactions was laid down in The Benami Transactions (Prohibition) Act, This Act consisted of only. The Benami Transactions (Prohibition) Act – Property Lawsin India at , a website for Indian Laws and bareacts, legal advice. The Benami Transactions (Prohibition) Act, (‘Primary Act’) was enacted in the year to prohibit all benami transactions. The Act.
|Published (Last):||4 October 2018|
|PDF File Size:||9.98 Mb|
|ePub File Size:||2.38 Mb|
|Price:||Free* [*Free Regsitration Required]|
The word “Benami” means anonymous or nameless and the term “Benami Transaction” is used to describe a transaction where one person pays for property but the property is transferred to or held by somebody else.
Benami Transactions (Prohibition) Act, 1988 – Meaning & Provisions
The person who pays for the property is the real beneficiary, either at present or at some point in the future, but is not recorded as the legal owner of the property. This enables the payer to achieve undesirable purposes such as utilizing black money, evading the payment of tax and avoiding making payments to creditors.
The Benami Transactions Prohibition Act, ‘Primary Act’ was enacted in the year to prohibit all benami transactions. The Act defined a ‘benami transaction’ as “any transaction in which property is transferred to one person for a consideration paid or provided by another person”.
Kan Singh AIR SCexplained Benami Transaction as “Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner.
However, the Primary Act was not comprehensive enough and lacked to make a big impact. The Rules of the Primary Act were not framed and benami transactions continued in India.
The Primary Act had several loopholes, including the absence of an appellate mechanism and lack of provisions for vesting of the confiscated property with the Central government.
The Benami Transactions Prohibition Amendment Act, ‘Amendment Act’ seeks to amend the Primary Act and is aimed at catching those with black money in the domestic economy hidden through benami properties. The reason for bringing an Amendment Act instead of a new Act is that the Primary Act has penal provisions and penal provisions cannot be applied retrospectively.
So if a new Act was passed inall those who acquired benami properties before would be given immunity. The Amendment Act increases the scope of transactions which qualify as benami and includes property transactions where:.
The Amendment Act specifies the following cases which are exempted from the scope of the definition of a benami transaction. When a property is held by:.
Property of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing title or interest in the property and where the property is capable of conversion prohibktion some other form, then the property in the converted form and also includes the proceeds from the property. The Act establishes four authorities who transactkons be able to conduct inquiries regarding benami transactions:.
Where any person enters unto a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory transacions or to avoid payment to creditors, the following shall be guilty of the offence of benami transaction:.
Fair Market Value is a price that the property would ordinarily fetch on sale in open market.
In cases where the trsnsactions is not ascertainable, another procedure will be prescribed. The Amendment Act seeks to clearly define the benami transactions, establish adjudicating authorities and an Appellate Tribunal to deal with benami transactions, and specifies the penalty for entering into benami transactions.
The Act is necessary to reduce generation and utilization of unaccounted black money. Real estate is considered as one of the major avenues for investment of unaccounted money in India.
All real estate transactions shall now be in the name of the actual owner who is paying the consideration from his known sources. The practice of including the correct name in property transactions will bring transparency in the sector. With increased transparency, title risks would be minimised and buyer confidence in property transactions will get a boost.
A fresh breath of professionalism will be ushered in. Moreover, this will also increase the tax revenue for the Government by curbing unaccounted money into the system. In the long term it will make India a more attractive investment destination, aligning transactions with ethical standards and will increase international institutional investors and financial institutions prihibition in this sector.
The content of this article is intended to provide a general guide to the subject matter.
Specialist advice should be sought about your specific circumstances. Your LinkedIn Connections at Firm. The term ‘Benami Transaction’ covers a transaction or Arrangement where a property is transferred to, or is held by, a person for a consideration provided, or paid by, another person; and the property is held for the immediate or future benefit, direct or indirect, of the person providing the consideration.
The Amendment Act increases the scope of transactions which qualify as benami and includes property transactions where: When a property is held by: The Act establishes four authorities who will be able to conduct inquiries regarding benami transactions: Issue of Show Cause Notice by Initiating Officer where he has reason to believe that any person is a benamidar in respect of a property.
Provisional attachment of property if necessary.
Benami Transactions (Prohibition) Act, 1988
Revoke provisional attachment if satisfied the property is not benami. Continuing provisional attachment or ordering provisional attachment where not satisfied that property is not benami and refer a statement of case to Adjudicating Authority.
Adjudicating Authority to hear affected persons and pass order holding that property is benami or not. The authority will decide within a year if the prohlbition is benami. Where adjudication order holds property as benami, hear affected persons and pass confiscation order.
Prohibition of Benami Property Transactions Act,
Appeals against orders of the Appellate Tribunal will be to the respective High Court with jurisdiction. Beneficial owner, Benamidar Any other person who abets or induces any person to enter into benami transaction The offences are non-cognizable and non-bailable. Do you have a Question or Comment? Interested in the next Webinar on this Topic? Click here to register your Interest. Events from this Firm. More from this Firm.
More from this Author.
News About this Firm. Recently, the Government of Maharashtra made an announcement which reiterated the position under Tranwactions law that a Muhammadan may gift immovable property without registration of such gift.
The Developer further rebutted that only upon such verification by the concerned relevant authorities that the said plots were included in the list prepared by DTCP. The real estate sector has been one of the top-most contributors to the country’s Gross Domestic Product GDP and employment creation.
An Insight On Defaults.
Benami Transactions (Prohibition) Amended Act,
Stamp duty and registration of instruments has always been a complex and talked about issue. Several questions are usually asked by people, such as:. Real Estate Sector in India is one of the few sectors that have witnessed exponential growth in the last two decades.
Real Estate and Construction. Real Estate Webinar Jan 12, Video. Property Hotline – Your Queries Answered!! Worldwide Europe European Union U. Energy and Natural Resources. Food, Drugs, Healthcare, Life Sciences.
Media, Telecoms, IT, Entertainment.