Secured Properties under Benami Act
1. Property held under the name of spouse or child, for which the amount is being paid through a known source of income.
2. A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income.
3. Property held by someone in a fiduciary capacity; that is, a transaction involving a trustee and a beneficiary.
Properties that Benami Act Deal with
Assets of any kind- movable, immovable, tangible, intangible, any right or interest, or legal documents . As such, even gold or financial securities could qualify to be benami.
- The transaction is made under a fictitious name ,
- The owner is not aware of denies knowledge of the ownership of the property , or
- The person providing the consideration for the property is not traceable .
New Penalties For the Same Offence
It is being done to curb on black money. People booked under the act may face the loss of property, penalty, and up to 7 years in jail. People with unaccounted income will sure have a tough time ahead. As for the general public, it won’t be much of an issue if their transactions are legal. The best property lawyer in India can be consulted to make sure that your property transactions are 100% legal.
Amendments Brought Forward By This Act
The New Benami Act came into effect from November 1. It prohibits "illegal benami transactions, under which up to seven years of imprisonment and penalty for those indulging in such activities could be handed out".
Under the Act, the penalty for entering into benami transactions is imprisonment up to three years, or a fine, or both. The Bill seeks to change this penalty to rigorous imprisonment of one year up to seven years, and a fine which may extend to 25% of the fair market value of the benami property.
The Act also specifies the penalty for providing false information to be rigorous imprisonment of six months up to five years and a fine which may extend to 10% of the fair market value of the benami property.
Escape routes closed
All domestic benami transactions conducted since 1988 shall fall under the purview of the amended PBPT Act. Re-transferring the property to the beneficial owner won’t undo the impact and the re-transfer shall be construed as invalid and the benami transaction shall remain punishable. So, those considering re-transfer as an escape route, need to think again.
Tax Evaders Will Soon Become Tax Payers
Rather than hoarding the black money in cash, the tax evader invest their accumulated illegal money in buying benami properties. The whole process affects the revenue generation of government hampering growth and development of the state. Since the percentage of the taxpayer in the country is a dismal low, the government fails to successfully implement its policies and schemes due to lack of resources. A tough law against benami properties is the need of the hour to check corruption.
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