Business Mantra: Faridabad
Benami Transactions Prohibition Act 1988 needed some amendments relating to definition of Benami transactions, establishing the Adjudicating Authority and Appellate Tribunal to tackle the Benami transactions effectively and efficiently and for specifying penalties on defaulters who enters Benami transactions.
So in order to bring these amendments Benami Transactions Prohibition Amendment Bill 2015 was introduced in Lok Sabha by Finance Minister ‘Mr. Arun Jaitley’ on 13thMay, 2015 and again some amendments based upon recommendation of standing committee have been proposed by Central Govt. on 22thjuly, 2016.
Now, according to the latest amendments proposed, the definition of Benami transaction:
- Such transactions, in which any property is held by or any property transferred to a person, without having been provided for or paid for the consideration of such property by such person means property is held by someone else and consideration has been paid by another person. But if the transaction has been entered in a proper way like payment of stamp duty has been made and the contract has been registered, then such transaction shall not be held Benami transaction.
- If anyone purchases a property in the name of his/her family member using his known sources of funds will not be considered as Benami transactions. An important point for consideration here is known a source of funds is not only known sources of income but any other source also like by way of loan etc. Mr. Jaitley himself cleared this point in the Parliament.
- A Benami property will not be re-transferable from Benamidar individual to beneficial owner of such property or anyone representing him. If it is done, then such transaction will be void. But if the beneficial owner discloses such property in Income Declaration Scheme 2010 then this provision will not be applicable on such transfer.
- In case of confiscation of Benami property all the rights & titles of such property shall vest with Central Govt.
- Initiating officer on suspecting any transaction as Benami transaction, then investigation may be initiated by him by way of issuing a notice to Benamidar against such transaction. If the identity of beneficial owner is known, the notice shall be issued to such beneficial owner also.
- Adjudicating Authority may ask for the information for investigation from Benamidar or beneficial owner by giving a period of 30 days and appeal against the decision of Adjudicating Authority may be made in Appellate Tribunal for Benami transactions.
Although provisions in act are already there for dealing with unexplained investments and transactions, yet a special act for the same would act as deterrent for entering into Benami transactions.