7 years’ jail for benami transactions

7 years’ jail for benami transactions

Context

The Income-Tax Department on Wednesday warned people to “keep away” from benami transactions, cautioning that violations under the newly enacted law invites criminal prosecution and rigorous imprisonment up to seven years

Rigorous punitive measures

Benamidar [in whose name benami property is standing], beneficiary [who actually paid consideration] and persons who abet and induce benami transactions are prosecutable and may face rigorous imprisonment up to 7 years, besides being liable to pay fine up to 25% of fair market value of benami property

What is Benami property?

• Benami essentially means property without a name. In this kind of transaction the person who pays for the property does not buys it under his/her own name.
• 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 property is held for the benefit – direct or indirect – of the person paying the amount