26, May, 2017
The Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in Lok Sabha on May 13, 2015. The Bill seeks to amend the Benami Transactions Act, 1988. The Act prohibits benami transactions and provides for confiscating benami properties.
The Bill seeks to: (i) amend the definition of benami transactions, (ii) establish adjudicating authorities and an Appellate Tribunal to deal with benami transactions, and (iii) specify the penalty for entering into benami transactions.
It may have taken the government over 28 years to implement the Benami transactions law — with the passage of an amendment Bill, the Benami Transactions (Prohibition) Amendment Act, 2016, came into force on November 1, while the legislation was first enacted in 1988. However, the Centre is in no mood to waste any time as it goes after nabbing the culprits in fast-forward mode.
Results have begun to show within days of the Central Board of Direct Taxes (CBDT) setting up 24 Benami Prohibition Units (BPUs) to crack the whip on the unaccounted transaction.
According to an official release, the Income-Tax Directorates of Investigation have identified more than 400 Benami transactions up to May 23, 2017. These include deposits in bank accounts, plots of land, flat and Jewellery.
“Immovable properties have been attached in 40 cases, with a total value of more than Rs 530 crore in Kolkata, Mumbai, Delhi, Gujarat, Rajasthan and Madhya Pradesh,” the department told Press Trust of India. According to the report, premises of 10 senior government officials were raided in the past one month to unearth black money earned through corrupt practices and introduce accountability and probity in public life.
Earlier, the Prime Minister Narendra Modi-led government had pledged to strictly implement the Benami Transactions (Prohibition) Act, 1988, to curb corruption.
For the uninitiated, the Persian term Benami stands for a proxy. Investing in an asset using another person as a proxy is known as Benami transaction. Benami property includes movable and immovable, tangible and intangible, corporeal and incorporeal assets. Land being one of the most valuable assets, most park their money in property using a proxy to save taxes. Benami transactions also lead to sharp rise in property prices, making it unaffordable for an average India.
Under the provisions of the law, a Benami property could be attached and subsequently confiscation. Apart from that, a jail term of up to seven years can be imposed on a benamidar or the beneficiary. That is not all. A beneficiary might also have to pay as much as 25 per cent of the market value of the property as fine. There are also provisions for punishing the abettor --- a rigorous imprisonment of six months to seven years for providing false information. An abettor will also be liable to pay 10 per cent of the market value of the property as fine.
The guilty will be punished and justice will be met. But, the confiscated properties could be put to better use if the government goes ahead with a recommendation made by top-level bureaucrats. A group of senior bureaucrats had earlier suggested confiscated properties be used to build affordable houses for the poor. At a time when the government is working towards meeting the ambitious target of providing housing for all by 2022, this is an option worth trying.