Buying property in your mother's name could now fetch you seven years in jail. According to the Benami Transactions (Prohibition) Amendment Act 2016, which came into force on November 1, last year unless you are a joint holder in the property with your mother, father, or sibling you could go to jail for indulging in benami transactions.
According to the amended Act, you can buy property only in the name of your spouse or in any of your children's name without being a joint holder.
The Act is already being enforced by the IT Department. A senior finance minister official told DNA on Monday that it had issued 87 notices and attached bank deposits worth crores in 42 ?cases nationwide under the amended Benami Transactions Act 2016. The IT department will then go on to examine other benami transactions like real estate and stocks.
It's not just real estate on which one can be prosecuted. The new act defines property as any asset whether movable like the entry of stocks, penny stocks, RTGS or immovable (land home), tangible or intangible, corporal or non-corporal or any interest or any right, any document or any instrument.
Almost everything has been included under this new Benami Transactions Act 2016, if one looks at the wording. The new act clearly says that: "No person shall enter into any Benami transaction. A person has included individual, HUF, Firm and company or any artificial jurisdictional person. The property is transfer to or hold by a person, and the consideration of the same is provided or paid by some other person, and it is for immediate or future benefit direct or indirect of the person who has provided the consideration."
Finance Ministry sources said that the move was introduced because people with black money were buying property and depositing that money for the property under fictitious names. On paper, they were not the owners but enjoyed all the benefits. A senior finance ministry official said, "It is assumed that some corrupt political leaders, government officials and developers are the ones indulging most in Benami transactions. Under this amended Act we hope that most will come forward and declare their benami transactions."
The government has given a window till March 31, 2017 for all Benamidars and their beneficiaries to come forward and declare their illegal transactions.
What is Benami property?
Benami property means any property which has been bought by black money or in the name of another person to hide the real ownership of the property.
What has now happened?
The government has amended the 28-year-old original Benami Transactions Act 1988 to the newly stringent Benami Transactions (Prohibition) Amendment Act 2016, which came into force on November 1, 2016.
What are the implications of this amended Act?
Now, all those who have bought property under their mother, father or sibling's name without being a joint shareholder ca now face seven years RI in jail. They will also have to face 25 per cent penalty on the rate of fair market value on the property as well.
What will the government do with the Benami property?
The government will confiscate the property without paying any money to the Benamidar.
What is the way out?
The beneficiary will have to declare the Benami transactions before March 31, 2017. The money from these illegal transactions must be declared and deposited under the Prime Minister Garib Kalyan Yojana 2016.
