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November 2016
The Benami Transactions (Prohibition)
Amendment Act, 2016, designed to curb black money and passed by parliament in
August, came into effect on Tuesday. The Total Investment & Insurance Solutions
An amendment of the 1988 Benami
Transactions Act, the new law provides for up to seven years' imprisonment and
fine for those indulging in such transactions, whereas the earlier law provided
for up to three years of imprisonment or fine or both. The Total Investment & Insurance
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"The rules and all the provisions
of the Benami Transactions (Prohibition) Act, shall come into force on November
1, 2016. After coming into effect, the existing Benami Transactions
(Prohibition) Act, 1988, shall be renamed as the Prohibition of Benami Property
Transactions (PBPT) Act, 1988," a Central Board Of Direct Taxes statement
here said last week.
The amendments aim to strengthen 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 Total Investment & Insurance
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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.
The PBPT Act prohibits recovery of the
property held benami from benamdar by the real owner.
As per the Act, properties held benami
are liable for confiscation by the government, without payment of compensation.
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Insurance Solutions
An appellate mechanism has been provided
under the act, in the form of an adjudicating authority and appellate tribunal.
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According to the government, the four
authorities who will conduct inquiries or investigations are the Initiating
Officer, Approving Authority, Administrator and Adjudicating Authority.
"Section 58 under the law clearly
states that in case of charitable or religious organisation properties, the
government has the power to grant exemption," Finance Minister Arun
Jaitley said, while reassuring parliament that properties in the name of
genuine religious trusts will be kept out of the purview of the legislation. The Total Investment & Insurance
Solutions
Highlights of the Act:
* Up to seven years' imprisonment and
fine for indulging in benami transactions
* Furnishing false information is
punishable by imprisonment up to five years and fine
* Properties held benami are liable for
confiscation by government without compensation
* Initiating Officer may pass an order
to continue holding the property and may then refer case to Adjudicating
Authority
* Adjudicating Authority will then
examine evidence and pass an order
* Appellate Tribunal will hear appeals
against orders of Adjudicating Authority
* High Court to hear appeals against
orders of Appellate Tribunal The
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