Lok Sabha passed comprehensive Bill to check benami transactions

Seeking to check black money, Lok Sabha has passed a comprehensive Benami Transactions Amendment Bill, with Finance Minister Arun Jaitley assuring that genuine religious trusts will be kept out of the purview of the legislation.

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.
• The Bill also seeks to establish an Appellate Tribunal to hear appeals against any orders passed by the Adjudicating Authority. Appeals against orders of the Appellate Tribunal will lie to the high court.

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.