To curb black money, the government had made some amendments in the Benami Property Act on 1 November 2016. Benami property was passed in 1988 but this act did not benefit much.
What Is Benami Property?
As much as it was thought, amendments were made to increase the scope of Benami Act so that transactions through black money can be stopped.
So guys, in today's post we are going to talk about what is benami property, which transactions will be called benami transactions and how much fine and punishment has been provisioned on benami transactions, so let's start.
First of all, let us talk about what is benami property. Benami property can be called in simple words that it is without anyone's name, that is, a person does not buy a property in his own name but buys it in someone else's name.
But if the person avails the benefit from that property then such transaction will be considered as benami transaction and such property will be considered as benami property in the name of the person in whose name the benami property is purchased.
That person will be considered as a benami donor. Apart from this, such transactions will also be considered as benami transactions in which a person gives cash to another person and that other person buys a property in his own name from that cash.
But the person whose benefit will be received first, the benefits arising from the property can be received in any form, direct or indirect, it is not necessary that these benefits are received now, they can be received in the future also.
which properties can be included in benami property.
Let us now talk about which properties can be included in benami property. It is not necessary that only real estate transactions will be included in benami property. All types of property, movable, immovable, trachable, untouchable, any interest or right or legal document will be included in benami property. also joins
That means, if you have purchased any shares in someone else's name, it will also be considered as benami transaction.
let's talk
When will property purchased in the name of one's wife or children be considered benami property? If the property is purchased in the name of wife or children's relative.
So this can also be a benami property but the meaning of this is that it has been purchased from an unknown source i.e. you are buying a property with black money in the name of your life partner, children or relatives.
So this will be considered as benami property. Therefore, if you buy any property in the name of your life partner or children, then it is important that you show it in your income tax return.
transactions which will not be considered benami transactions
Let us talk about transactions which will not be considered benami transactions. There are some transactions in which property is purchased in someone else's name, but even then that transaction is not considered benami.
1. Keeping any property in his name by the Karta or member of H.U.F Hindu undivided family which is being used for the benefit of other family members, this transaction will not be considered as benami transaction in the condition when the consideration for this transaction i.e. the consideration for H.U.F. K is given from Nosaw
2. Buying property by an individual in the name of his life partner or children from his non-source of income will not be considered as benami transaction.
3. Any person, being a responsible person, transfers any property in his name, for example, as a trustee, executor, partner of a partnership or as a depository, then this will also not be considered as benami transaction.
4. Purchase of property by a person in the name of his brother or sister or lineal or ascendant or descendant, where that person is a joint owner but such property is also purchased from a non-source, then it will not be considered as benami transaction.
how much fine and punishment
Let us talk about how much fine and punishment has been provisioned for the person owning benami property or doing benami transaction. In the Benami Property Act, there is provision for both punishment and fine for the person doing benami transaction.
If any person does benami transaction, then he will be fined equal to 25℅ of the fair market value of the property and there is a provision of imprisonment for a minimum of one year and a maximum of 7 years.
Apart from this, if any person gives wrong information to the officer, then a fine equal to 10℅ of the fair market value will be imposed on him and he can be sentenced to a minimum of 6 months and a maximum of 5 years.
In today's post, you learned what is benami property and which transactions will not be considered benami transactions and how much fine and punishment has been provisioned on benami transactions.
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