Benami Property Act to be effective from November 1, 2016

[] A new law to prohibit benami property transactions and curb the menace of black money, which provides for more stringent punitive measures, will come into effect from November 1, 2016

A new law to prohibit benami transactions, which provides for up to seven years’ imprisonment and fine, for those indulging in such activities, will come into effect from November 1. With a view to curb the menace of black money, the parliament in August, 2016, had passed the Benami Transactions (Prohibition) Act, after assurance from finance minister Arun Jaitley that genuine religious trusts will be kept out of the purview of the legislation.

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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 Act, 1988,” a CBDT statement said.

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While the existing law provides for up to three years of imprisonment or fine or both, for carrying out benami transactions, the amended legislation would provide for seven years’ imprisonment and fine. The act defines benami transactions, prohibits them and further provides that any violation is punishable with imprisonment and fine.

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The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner. “Properties held benami, are liable for confiscation by the government, without payment of compensation,” it said.

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An appellate mechanism has been provided under the act, in the form of an adjudicating authority and appellate tribunal. A joint or additional commissioner of IT, an assistant or deputy commissioner and a tax recovery officer in each principal CCIT region, have been notified to perform the functions and exercise the powers of the approving authority, initiating officer and administrator, respectively, under the act, the statement said.

While the 1988 act has nine sections, the amended law would have 71 sections. “Section 58 under the law clearly states that in case of charitable or religious organisation properties, the government has the power to grant exemption,” Jaitley said, responding to concerns of some parliament members about the applicability of the amended law, on properties in the name of deities, churches, mosques, gurudwaras or temples.

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Category: Lifestyle

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