After demonitisation of currency, the next step towards recovery of black money is crackdown of benami transactions and properties.
Benami property is any property without a name. If the buyer cannot disclose his income at the time of purchase, the transaction is considered Benami. The person on whom the property is purchased is known as Benamidar.
Any property, be it in the name of your relatives or joint, if you are able to produce the source of income, it cannot be called as Benami Property. Benami Property not only includes property but also includes jewellery, fixed deposits, Life Insurance.
The Benami Transaction (Prohibition) Act, 1988 which came into force on 19Th May, 1988 was the primary act concerned with the curbing and ceasing of all transactions regarding any Benami property. The main motive behind the transactions were to avoid payment of taxes, creditors by avoiding payment.
This amendment has been framed in such manner as to what procedure would be followed and how should be implemented. The amendment also provides that every transaction and person will be scrutinized with the help of their Income Tax Returns.
As an example, a benami property is a property bought by a person in the name of another person. There is a popular perception that benami transactions are used to disguise the real ownership for reasons, including tax avoidance, maintain secrecy, creating personal wealth at the expense of business, parking unaccounted money.
Talking about the Benami Transaction amendment act,2016 I feel that the government has done a brilliant job by taking this step. The Act of 1988 has only 9 sections that dealt with Benami property and its transactions on a superficial level. But the amendment in 2016 increased the sections from 9 to 72 which now gives the act a wider meaning and stricter penalty for the offenders. The government should also make sure that the said amendments are implemented and the officers at the grass root level should be given the charge of the same. It is a progressive step that was required in order to curb the corruption in our country.
After this amendment, there is mandatory to provide PAN Card on transactions of above Rs. 50,000 and TDS should be deducted from those who purchase a property worth Rs.50,00,000 and in the whole process, if the deal is found out to be incompetent to the terms then CBDT, Income Tax Department will issue the notice to that person.
It also includes strict punishment for people involved in such transactions shall be punishable with rigorous imprisonment for a term which shall not be less than 1 year but may extend to 7 years of imprisonment and a fine. This enactment would help to crack down corruption induced property owned by people. This act would allow for better control over all improper transactions, as well as the restriction of revenue sources.
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