Beware of Benami: The new name of the game! - Indian Real Estate Forum

Rashmi · 29-05-07

If you have a benami property, it may get acquired and auctioned by the government, according to a proposed amendment to the current law on benami transactions being processed by the law ministry at present. Also, it could become mandatory to get your property deeds verified from a chartered accountant.

The government is planning to amend the Benami Transaction (Prohibition) Act, 1988 to bring in these changes. The move is aimed to help the government keep tabs on benami property transactions. The amendments will also empower the Centre to acquire benami properties in the country, auction them and pass on the proceeds to states where there property is located, for developmental activities.

The law ministry is in the process of finalising a draft note to bring about amendments in the Act. There is a strong view in the government that benami transactions have fuelled the unprecedented rise in property prices over the past one-and-half years. Such deals generate a false demand in the property market and lead to rise in prices.

Cracking down on benami deals would drive black money out of circulation and boost government revenues substantially, a government official said. An audit of property deed by a chartered accountant will help in detecting anything unusual about it. Local authorities would also work in co-ordination with government-approved chartered accountants and tax officials. If the officials find anything unusual in a property deal, they can instantly check and alert the authority.

The benami prohibition law was passed by the Parliament in 1988 and its implemented entrusted to Central Board of Direct Taxes in 1991, but the rules for implementing the Act have not been framed so far. This was because the law ministry had pointed at certain infirmities in the law. One such grey area was lack of a specific provision for vesting of confiscated property with the Centre. The changes which are being considered will address these lacunae in the law paving the way for its implementation.

Manoj Misra · 31-05-07

This is really an interesting move. Given the fact that most of the politician and bureaucrats also take the "benami" route to create wealth (from black money), it needs to be seen how the law will be implemented!

Manoj Misra

29-05-07	#1
Rashmi Member Join Date: Nov 2006 Posts: 90 Thanks: 0 Thanked 0 Times in 0 Posts	Beware of Benami: The new name of the game! If you have a benami property, it may get acquired and auctioned by the government, according to a proposed amendment to the current law on benami transactions being processed by the law ministry at present. Also, it could become mandatory to get your property deeds verified from a chartered accountant. The government is planning to amend the Benami Transaction (Prohibition) Act, 1988 to bring in these changes. The move is aimed to help the government keep tabs on benami property transactions. The amendments will also empower the Centre to acquire benami properties in the country, auction them and pass on the proceeds to states where there property is located, for developmental activities. The law ministry is in the process of finalising a draft note to bring about amendments in the Act. There is a strong view in the government that benami transactions have fuelled the unprecedented rise in property prices over the past one-and-half years. Such deals generate a false demand in the property market and lead to rise in prices. Cracking down on benami deals would drive black money out of circulation and boost government revenues substantially, a government official said. An audit of property deed by a chartered accountant will help in detecting anything unusual about it. Local authorities would also work in co-ordination with government-approved chartered accountants and tax officials. If the officials find anything unusual in a property deal, they can instantly check and alert the authority. The benami prohibition law was passed by the Parliament in 1988 and its implemented entrusted to Central Board of Direct Taxes in 1991, but the rules for implementing the Act have not been framed so far. This was because the law ministry had pointed at certain infirmities in the law. One such grey area was lack of a specific provision for vesting of confiscated property with the Centre. The changes which are being considered will address these lacunae in the law paving the way for its implementation.

31-05-07	#2
Manoj Misra Member Join Date: May 2007 Location: Greater Noida Posts: 60 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	Interesting Move.. This is really an interesting move. Given the fact that most of the politician and bureaucrats also take the "benami" route to create wealth (from black money), it needs to be seen how the law will be implemented! Manoj Misra Last edited by saini; 01-06-07 at 08:37 AM.

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search