Govt Goes After Benami Properties, To Scan Deals Worth Over Rs 30 Lakh
It may have taken the government over 28 years to implement the Benami transactions law — with the passage of an amendment Bill, the Benami Transactions (Prohibition) Amendment Act, 2016, came into force on November 1, while the legislation was first enacted in 1988. However, the Centre is in no mood to waste any time as it goes after nabbing the culprits in fast-forward mode.
In May this year, the Central Board of Direct Taxes (CBDT) set up 24 Benami Prohibition Units (BPUs) to crack the whip on the unaccounted transaction.
According to an official release, the Income-Tax Directorates of Investigation have identified more than 400 Benami transactions up to May 23, 2017. These include deposits in bank accounts, plots of land, flat and jewellery.
“Immovable properties have been attached in 40 cases, with a total value of more than Rs 530 crore in Kolkata, Mumbai, Delhi, Gujarat, Rajasthan and Madhya Pradesh,” the department told Press Trust of India. According to the report, premises of 10 senior government officials were raided in the past one month to unearth black money earned through corrupt practices and introduce accountability and probity in public life.
Earlier, the Prime Minister Narendra Modi-led government had pledged to strictly implement the Benami Transactions (Prohibition) Act, 1988, to curb corruption.
What is new?
On November 14, Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra said the I-T Department was matching the tax profiles of all property registrations of above Rs 30 lakh under the provisions of the anti-Benami Act, as action against illicit asset holders was set to intensify.
Chandra said that so far the taxman had attached 621 properties, including some bank accounts, and the total amount involved in these cases, being probed under the Benami Transactions Act, is about Rs 1,800 crore.
"We will destroy all instruments that are used to convert black money into white," Chandra said, adding: "We have opened 24 units (of the I-T to implement the anti-Benami Act) all over the country. We are getting information from different sources," he said. "Our efforts in this direction are being intensified further."
For the uninitiated, the Persian term Benami stands for a proxy. Investing in an asset using another person as a proxy is known as Benami transaction. Benami property includes movable and immovable, tangible and intangible, corporeal and incorporeal assets. Land being one of the most valuable assets, most park their money in property using a proxy to save taxes. Benami transactions also lead to sharp rise in property prices, making it unaffordable for an average India.
Under the provisions of the law, a Benami property could be attached and subsequently confiscation. Apart from that, a jail term of up to seven years can be imposed on a benamidar or the beneficiary. That is not all. A beneficiary might also have to pay as much as 25 per cent of the market value of the property as fine. There are also provisions for punishing the abettor — a rigorous imprisonment of six months to seven years for providing false information. An abettor will also be liable to pay 10 per cent of the market value of the property as fine.
The road ahead
Last year, a group of senior bureaucrats had suggested confiscated properties be used to build affordable houses for the poor. At a time when the government is working towards meeting the ambitious target of providing housing for all by 2022, this is an option worth trying.