Benaami Property: Are you at risk?
After demonetisation, Prime Minister Narendra Modi and the Indian Government may crack the whip on benami property holders.Many citizens re unsure if the propery they own will come under benaami properties.
What is a Benaami 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.
1. Property held under the name of spouse or child, for which the amount is being paid through a known source of income.
What isn’t a benami transaction?
2. A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income.
3. Property held by someone in a fiduciary capacity; that is, transaction involving a trustee and a beneficiary.
Assets of any kind — movable, immovable, tangible, intangible, any right or interest, or legal documents. As such, even gold or financial securities could qualify to be benami.
What falls under benami transaction?
How it affects the people?It is being done to curb on black money. People booked under the act may face loss of property, penally, and up to 7 years in jail . People with unaccounted income will sure have a tough time ahead. As for the general public, it won’t be much of an issue if their transactions are legal.
Advocate Rohit Nagpal explains what properties may fall under benaami transaction, and associated penalites for people involved in benaami transaction
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