What is Benami Property? – Prohibition of Benami Property Act Your Way To Success

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What is Benami Property? – Benami Property Prohibition Act

The property of Benami is that the popular word nowadays. We continue to hear this word very often however we can really know what the meaning of the Benami property is and the ownership implication of the benami property. During this post, we can | Let’s discuss] what is benami owned? What is the prohibition of property benami act? However benami property act eradicate black money?

What is Benami Property?

A real meaning of benami is without a name. Benami property means that property purchased in the name of another person. In simple terms suppose you want to buy a plot. However, after making a purchase, you are not buying a plot in your name. You are buying this plot in the name of the close relative tell your brother. The property acquired like this can be known as a benami property. The owner of the property is known as benamidar.

What is Benami Property? - Benami Property Prohibition Act

What is Benami Property? – Benami Property Prohibition Act

 

These types of properties are generally purchased for the direct or indirect benefit of a person paying the money for the purchase. Below are some examples of properties belonging to the category benami.

A property purchased in the fictitious name.
The owner of the property is missing or is not traceable.
The owner defined on the paper does not know about the transaction.
The money is paid from undisclosed income (black money) and the number of the PAN card is not mentioned.
Incase if the beneficiary and the owner of a property are not the same.

What are the exclusions for benami properties?

There are some exclusions for benami properties. These exclusions include –

If the property is purchased in the name of the wife or in the name of the single daughter, it is not benami property.
If a property is held jointly by a wife or other relatives with known source or fund, it is excluded from the benami properties.
If the property is already declared under the income statement scheme – IDS 2016.
In case of HUF, if the head of HUF or Karta decides to buy a property for the benefits of all the trustees.
Charitable or religious properties are excluded.

How will the Benami property be identified?

In order to identify the benami properties, the authorities consider the following factors.

The authorities will examine the source of the fund used to make the purchase of the property. The tax on this fund is paid or not.
If the property is purchased in another name what is the purpose behind the purchase of the property.
The authority will find out who has a document of ownership.
If you are earning some income from this property you have declared this income in your statement or not.
The authority will also evaluate that the actual possession of the property is with whom.

What is the prohibition of benami property?

In order to curb this negligence, the “Benami Property Prohibition Law” was formulated and strict provisions were established. This law is effective as of November 1, 2016. According to this act the following action can be taken against the properties of benami and the owners of benami properties.

According to the act the property identified as benami can be confiscated by the government without any compensation or payment.
Up to seven years in jail and fine up to 10% of the fair market value of the property.
Five years in jail and fine for providing incorrect information.
An appeal mechanism has been provided in terms of adjudicating authority and court of appeal.
You can find more information about banning the property benami act from here.

About you –

The possession of a Benami property is a crime against the nation. If you are holding these types of property prepare for penalties and imprisonment, including loss of property.

This step is taken to eradicate black money. People with black money will surely have a difficult time ahead.

You do not need to worry if you have already declared your income or assets in IDS 2016 or do not have benami properties

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