PM Modi hints at crackdown on benami properties
Prime Minister Narendra Modi has hinted at a crackdown on benami properties and said the Congress is worried as such assets of its leaders will not be spared in his government’s action.
What is Benami?
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. ‘
What constitutes Benami property?
What isn’t a benami transaction?
- Property held under the name of spouse or child, for which the amount is being paid through a known source of income.
- A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income.
- Property held by someone in a fiduciary capacity; that is, transaction involving a trustee and a beneficiary.
How it affects the people?
Laws against benami properties?
- The first act against benami properties ws passed in 1988 as the Prohibition of Benami Property Transactions Act, 1988. To curb black money, the Modi government in July 2016 decided to amend the original act.
- So after further amendment, Benami Transactions (Prohibition) Amendment Act, 2016 came into force on November 1, 2016. The PBPT Act defines benami transactions, prohibits them and further provides that violation of the PBPT Act is punishable with imprisonment and fine.
- 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.