Government may approve benami property act changes today to fight against black money

The union cabinet is expected to approve amendments to the law on benami property law on Thursday to demonstrate its seriousness in fighting the menace of black money. The amendments to the Benami Transaction (Prohibition Act) will give the government the power to confiscate any property that is declared as benami, or held in the name of a person who has not paid the consideration for the property.

Although the Parliament had passed a law in 1988 prohibiting benami deals , it was never implemented, as the rules were not framed. The government had accelerated the process of framing rules to tighten the provisions in the old legislation after facing outcry over the issue form various quarters. It is believed that a substantial portion of the black money generated is parked in real estate in the names of friends and family.

The new law will set up an authority and empower it to confiscate an asset deemed to be benami if the owner fails to provide proven source of earning to acquire that property. The old law had also provided for setting up such an authority, but it was never notified. Under the new law the government will seize benami property, auction them and pass on the proceeds to states, where the property is located, for development activities. The act will also make it mandatory for all property deeds to be verified by a CA.

"This will reduce black money and boost government revenue and requirement for a mandatory audit will make it simpler for the authorities to keep track of deals," an official said. Benami transactions are primarily prevalent in the real estate sector, but the 2G scam has revealed that the possibilities exist in other sector as well. Some of the companies that received telecom licenses in 2008 were actually doing so for other undisclosed companies.


Source:- http://economictimes.indiatimes.com/markets/real-estate/news-/government-may-approve-benami-property-act-changes-today-to-fight-against-black-money/articleshow/9045436.cms

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Ankit Wani
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