The Income Tax Department announced the enforcement of the Benami Transactions (Prohibition) Amendment Act, 2016 (BTP Amendment Act), from 1st November 2016 in order to make it more realistic to the authorities to control benami transactions.
What is Benami Transactions (Prohibition) Amendment Act, 2016?
The BTP Amendment Act, the existing Benami Transactions (Prohibition) Act, 1988, shall be renamed as Prohibition of Benami Property Transactions Act, 1988 (PBPT Act).
- Benami Transactions (Prohibition) Act, 1988 is an Act of Parliament of India that prohibits benami transactions and the right to recover property held benami. It came into force on 5 September 1988.
- The Act defines benami transactions and also provides imprisonment upto seven years and fine for the violation of the Act. The official notification says, ‘The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner.Properties held benami are liable for confiscation by the government without payment of compensation.’
- The benami transaction is any transaction in which property is transferred to one person for a consideration paid by another person.
- In this Act, the word is used to define a transaction in which the real beneficiary is not the one in whose name the property is purchased. As a result, the person in whose name the property is purchased is just a mask of the real beneficiary.
- In an attempt to control black money, in July 2016,Modi government decided to amend the original act which was subsequently passed by the Parliament of India as The Benami Transactions (Prohibition) Amendment Act, 2016.
- The Government , also notified the provisions of the act to come into force from 1 November 2016. The 2016 Act also has safeguard mechanisms such as the adjudicating authority and the appellate mechanism for appeals.
- The new legislation provides for seven years imprisonment and fine for those indulging in illegal transactions and properties held benami are liable for confiscation by the government without payment of compensation.
- The amendments aim tostrengthen the Act in terms of legal and administrative procedure. The benami (without a name) property refers to property purchased by a person in the name of some other person.
- The person on whose name the property has been purchased is called the benamdar and the property so purchased is called the benami property. The person who finances the deal is the real owner.