After demonetisation of Rs 500 and Rs 1,000 notes, Prime Minister Narendra Modi has hinted he would now target benami property holders in the country.
During the Mann ki Baat radio programme on Sunday, PM Modi promised to operationalise the new Benami Act, which came into effect from November 1. The amendment to the Benami Transactions (Prohibition) Act, 1988 was done "with a view to, inter alia, enable confiscation of benami property and provide for prosecution."
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"You are possibly aware of a law about benami property in our country which came into being in 1988, but neither were its rules ever framed, nor was it notified. It just lay dormant," Modi said in his Mann ki Baat radio address.
The Benami Transactions (Prohibition) Amendment Act, 2016 prohibits benami transactions and would also affect the real estate industry as those who buy property on the names of others will be penalised under the ambit of this law.
If found guilty, seven years of imprisonment and penalty will be levied. The benami property owner will also be liable to pay 25 percent of the fair market value of the property as fine. Not only benami bank accounts, but also property will be confiscated by the government.
While Congress vice-president Rahul Gandhi has been accusing Modi of pushing an ill-framed economic reform as well as saying that most of the black money is not in the form of cash, Modi's attack on benami property could be the answer to his questions.
The person who pays for the property is the real owner, but the property is bought on someone else's name. The new act prohibits recovery of the property by the real owner from the one on whose name it was bought. The property can be confiscated without any compensation in return.
"Section 58 under the law clearly states that in case of charitable or religious organisation properties, the government has the power to grant exemption," Union Finance Minister Arun Jaitley had said.
"With the passing of this amended Bill, there will be no way to avoid adding the proper name to a purchased property. This will bring in more transparency into the sector, minimise title risks and boost buyer confidence with regards to residential property transactions," added Anuj Puri, Chairman and Country Head of JLL India.
