Benami Act provisions to come into force from 1 November
Benami Transactions (Prohibition) Amendment Act, 2016 gives the government powers to confiscate benami properties
New Delhi: The income-tax department on Friday notified the provisions of the Benami Act with effect from 1 November, reinforcing the fight against tax evasion.
The Benami Transactions (Prohibition) Amendment Act, 2016 seeks to give the government powers to confiscate benami properties—assets held in the name of another person or under a fictitious name to avoid taxation and conceal unaccounted-for wealth.
The bill, which had amended the older Benami Transactions (Prohibition) Act, 1988, got Parliament’s approval in August this year.
The amended Act seeks to remove lacunae in the old legislation and has provisions that make violation of the Act punishable with imprisonment of up to seven years and a fine of up to 25% of the fair value of the asset. It also states that properties held benami are liable for confiscation by the government without payment of compensation.
The term “property” will cover movable, immovable, tangible and intangible properties.
This Act, along with the stringent Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, to penalize those with unaccounted wealth abroad, will help the government in its fight against black money both within and outside the country.
Safeguard mechanisms such as the adjudicating authority and the appellate mechanism for appeals have also been notified in the rules.