As part of initiating strict actions against benami transactions, the Income Tax Department on Wednesday warned people to keep away from such deals. Violations under the newly enacted law invite criminal prosecution and rigorous imprisonment up to seven years, the authority cautioned.
The department put out an advertisement in leading national dailies titled "Keep Away from Benami Transactions". It urged conscientious citizens to help the government eradicate it.
Any transaction in which property is transferred to one person for a consideration paid or provided by another person is considered as benami transaction. Properties which people buy but not under their name are known as benami properties. To spend black money and save taxes, people buy assets in the name of their relatives.
"Benamidar (in whose name benami proper is standing), beneficiary (who actually paid consideration) and persons who abet and induce benami transactions are prosecutable and may face rigorous imprisonment up to seven years. Besides that they will be liable to pay fine upto 25 per cent of fair market value of benami property," the ad explained.
The tax authority attached benami assets worth Rs 18.33 billion across the country, issued 517 notices and made 541 attachments, from November 1, 2016, to October 2017. The department started initiating action under the new Benami Transactions (Prohibition) Amendment Act, 2016 from November 1, 2016, the advertisement said.
The ad warns that persons who furnish false information to authorities under Prohibition of Benami Property Transactions Act, 2016, are prosecutable and may be imprisoned up to 5 years besides being liable to pay fine up to 10 per cent of the fair market value of benami property.
Benami property may be attached and confiscated by the government. This action will be in addition to prosecution under the Income Tax Act of 1961 for tax evasion charges. The tax department is the nodal department to enforce the Benami Act in the country.
