Benami Property: All You Need To Know About Benami Act
By Team Legistify / 2017-02-21
Benami property, or property that has been taken in the name of someone else, is considered illegal in India and attracts a high amount of penalty. Read about benami property in India and the law associated with it.

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Benami in Hindi means "without a name". A property bought by an individual, not under his or her name is benami property. It can include property held in the name of spouse or child for which the amount is paid out of known sources of income. A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income also falls under benami property. The transaction involved in the same is called benami transaction.

As a usual practice, to evade taxation, people invest their black money in buying benami property. The real owner of these properties is hard to trace due to fake names and identities. The person on whose name the property is purchased is called benamdar. The benami transactions include buying assets of any kind — movable, immovable, tangible, intangible, any right or interest, or legal documents.

In August, Parliament passed the Benami Transactions (Prohibition) Act, with the assurance from Finance Minister Arun Jaitley that genuine religious trusts would be kept out of the purview of this new legislation.

“The rules and all the provisions of the Benami Transactions (Prohibition) Act shall come into force on November 1, 2016. After coming into effect, the existing Benami Transactions (Prohibition) Act, 1988, shall be renamed as the Prohibition of Benami Property Transactions Act, 1988,” the Central Board of Direct Taxes (CBDT) said in a release.

The new legislation will make a provision of seven-year imprisonment and fine, replacing the three-year jail term, or fine, or both. You can consult a good property lawyer in India to know more about the concept of benami transactions and the penalty associated with them.

Benami property, or property that has been taken in the name of someone else, is considered illegal in India and attracts a high amount of penalty. Read about benami property in India and the law associated with it.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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