Hyderabad: Demonetisation phase would end on December 30, after which Benami properties would be the next target of central government. Government plans to operationalise a strong law to effectively deal with ‘Benami’ properties. If Benami properties are proved, the offender could face up to seven years in jail, besides payment of 25 pc of the market rate of the property as fine. Additional 10 pc fine will have to be paid on providing wrong information.
‘Benami Transaction’ means a transaction or an arrangement where a property is transferred to, or is held by, a person called ‘Benamidar’, and the consideration for such property has been provided, or paid by, another person. Such property is referred to as ‘Benami Property’. A Benami property is basically property which lacks the official owner’s name. The property may be purchased in a family member’s name, and may not have been paid for by known income sources.
The practice of buying a property in the name of someone other than the buyer has been widely misused to buy real estate with undeclared income and with fake names and identities to avoid paying tax. It is estimated Benami properties worth billions of dollars are held under fictitious names across India. The law, called the Prohibition of Benami Property Transactions Act, which came into effect on November 1, says people who hold assets that don’t actually belong to them could face up to seven years in jail, besides seizure of the property.
After demonetization of high-value currency notes, Prime Minister Modi is all set to crack the whip on Benami property holders. Government is preparing strategy to amend the laws in this connection. Government will confiscate properties whose revenue and accounts have been kept secret. According to experts this move can bring greater transparency to a notoriously opaque sector and help check prices if a new law is implemented properly.