Cabinet approved amendment in the Benami Transactions (Prohibition) amendment Bill

The Union Cabinet has given its approval for introducing amendments to the Benami Transactions (Prohibition) (Amendment) Bill, 2015 in Parliament. The amendments aim to strengthen the Bill in terms of legal and administrative procedure so as to overcome the practical difficulties which may arise in the implementation of the provisions of the Bill when it becomes an Act.

Significance of the Bill:

• The legislation is intended to effectively prohibit benami transactions and consequently prevent circumvention of law through unfair practices.
• It empowers the Government to confiscate benami property by following due procedure. It therefore promotes equity across all citizens.
• Also, those who declare their benami properties under income declaration scheme will get immunity under the Benami Act.

Details:

• The Benami Transactions (Prohibition) Amendment Bill is aimed at curbing domestic black money.
• The bill provides for a fine of up to 25% of the fair value of the asset and imprisonment of up to seven years, unlike an earlier lapsed version of the bill, which stipulated either a fine or imprisonment.
• Under the bill, the term “property” will cover movable, immovable, tangible and intangible properties. In case of joint ownership of property, the tax payer will have to show financing sources.

Background:

The bill was tabled in May last year but was subsequently referred to Parliament’s standing committee on finance. The committee submitted its report in the budget session this year and recommended a host of small changes including providing more time to allow property holders to furnish information, a time-bound process for initiating investigation and for filing appeals.

What is benami property?

The benami (without a name) property refers to property purchased by a person in the name of some other person. The person on whose name the property has been purchased is called the benamdar and the property so purchased is called the benami property. The person who finances the deal is the real owner.