After demonetisation, Prime Minister Narendra Modi and the Government of India may tighten the noose on benami property holders. Any citizen is unsure if they themselves come under benami property.
What is a benami property?
Benami essentially means property without a name. In such a transaction, the person who pays for the property does not buy it in his own name. The person in whose name the property is purchased is called benamidar and the property purchased is called benami property. The person making the deal is the real owner. ‘ The property is held for profit—directly or indirectly—of the person paying the amount.
What is not a benami transaction?
I. Property held in the name of spouse or child, for which amount is being paid through known source of income.
II. A joint property with brother, sister or other relatives for which amount are paid from known sources of income.
III. Property held by someone in a fiduciary capacity; That is, transactions involving a trustee and a beneficiary.
What comes under benami transaction?
Property of any kind – movable, immovable, tangible, intangible, any right or interest, or legal document. As such, gold or financial securities may also qualify to be benami.
How does it affect people?
This is being done to curb black money. Those booked under the Act could face damages to property, legal lapses and up to 7 years in prison. People with unaccounted income will surely move through tough times. For the general public, this will not be an issue if their transactions are legal.What properties can fall under benami transactions, and related penalties for those involved in benami transactions