Benami Transactions Act

After November 8 demonetization of Rs 500 and Rs 1,000 to crack down on black money hoarders, Prime Minister Narendra Modi now says the government will go after the benami property holders.

The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect on November 1. By law, benami property means any property which is the subject matter of a benami transaction and also includes the proceeds from such property.

Benami transaction" means a transaction or an arrangement: (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person.

and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration. Benami property is property that does not stick to the following criteria: a) Property held in the name of spouse or child for which the amount is paid out of known sources of income b) A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income c) Property held by someone in a fiduciary capacity. This means, by law, if you buy a property in name of your parents, too, can be declared as benami.

If an initiating officer believes that a person is a benamidar, he may issue a notice to that person. He may hold the property for 90 days from the date of issue of the notice, subject to permission from the Approving Authority.

At the end of the notice period, the he may pass an order to continue the holding of the property. If an order is passed to continue holding the property, he will refer the case to the Adjudicating Authority. The Adjudicating Authority will examine all documents and evidence relating to the matter and then pass an order on whether or not to hold the property as benami.

Based on an order to confiscate the benami property, the Administrator will receive and manage the property in a manner and subject to conditions as prescribed. The Bill also seeks to establish an Appellate Tribunal to hear appeals against any orders passed by the Adjudicating Authority. Appeals against orders of the Appellate Tribunal will lie to the high court.