In the past few years, we have seen the government major steps to end black money dealings through various measures such as the black money act, Income Disclosure Scheme, demonetization, etc. In this context, the terms ‘Benami property’, ‘Benami Act’, ‘Benami transactions’, etc. have been making headlines for quite some time now.
What does the term ‘benami’ really mean?The term ‘Benami’ in Hindi translates to ‘no name’ or ‘without name’. Benami transactions or Benami property would be one where a person’s own name is not used but the name of another person or a fictitious person is used instead.
The original law relating to Benami transactions was laid down in The Benami Transactions (Prohibition) Act, 1988. This Act consisted of only eight sections. The same was later amended by The Benami Transactions (Prohibition) Amendment Act, 2016 which was made up of 72 Sections.
Any property, whether movable or immovable, tangible or intangible, which has been the subject matter of a Benami transaction, is a Benami property. This would also include the consideration received from such property. Benami property would also include the right or such other document evidencing title or interest in such property.
Let us understand what a Benami transaction is and who are the parties involved with this example:
A property is purchased and registered in the name of Mr A. However, it is Mr B who actually pays for the same. Mr A only agrees to hold the property for Mr B. This makes Mr B the beneficial owner of the property.
In a Benami transaction, a property is transferred or held by one person (Mr A, the ‘Benamidar’) and the consideration for such property is paid by another person (Mr B, the ‘beneficial owner’) for whose benefit such property is held. The following transactions also fall under the definition of Benami transactions:
Exceptions The following type of transactions will not be treated as Benami transactions:
The various forms of punishment under the Benami Act are as follows:
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Cleartax is a product by Defmacro Software Pvt. Ltd.
SSL Certified Site