Benami Transaction (Prohibition) Act 2016.

[Guest]

Can anyone please explain me the definition of a Benami Transaction as per the new ammended Act ?2016

[YAGAY andSUN]

What is benami transaction?

The Benami transaction is any transaction in which property is transferred to one person for consideration paid by another person in other words, person who pays for the property does not buy it in his own name. The person in whose name property is purchased is called Benamdar and property so purchased is called Benami property.

Exclusion to Benami transactions.

1. Property held in the name of Children or spouse.
2. Property jointly held with brother/sisters for which amount is paid out of known source of income.
3. HUF buying property in the name of Karta
4. Property held by someone in fiduciary capacity e.g. trustee, partner, director of company etc.

Key Highlights Benami Transactions (Prohibition) Amendment Act, 2016

• Persons indulging in benami transactions may face up to 7 years’ imprisonment and fine.
• Furnishing false information is punishable by imprisonment up to 5 years and fine
• Properties held benami are liable for confiscation by government without compensation
• Initiating Officer may pass an order to continue holding property and may then refer case to Adjudicating Authority which will then examine evidence and pass an order.
• Appellate Tribunal will hear appeals against orders of Adjudicating Authority. High Court can hear appeals against orders of Appellate Tribunal.

[Guest]

Thank u Sir,

But in the definition the wordings are like

(A) A transaction or an arrangement

(a) where a property is transferred to .or is held by,a person and the consideration for such property has been provided, or paid by, another person; and

(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration,

I was not able to differentiate between the two above. Whether the both are inclusive conditions or both are different?

[YAGAY andSUN]

These wordings represents the language of law. You may check either dictionary meaning or check the interpretation of Statue etc in details to know the difference in those wordings.

AI Summary

Benami transactions: property held in another's name for another's benefit, attracting confiscation and criminal penalties under the amended law. Benami transactions occur where property stands in one person's name but consideration is paid by another and the property is held for the benefit of the payer. The statute names the holder as the benamdar and the asset as benami property, lists exclusions for family and fiduciary holdings, criminalises participation and furnishing false information, permits confiscation without compensation, and establishes a procedure involving an Initiating Officer, Adjudicating Authority and appellate review.