Benami Transactions (Prohibition) Act, 1988 - Wikipedia https://en.wikipedia.

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Benami Transactions (Prohibition) Act,

1988
Benami Transactions (Prohibition) Act, 1988 is an Act of the
The Benami Transactions
Parliament of India that prohibits certain types of financial transactions.
(Prohibition) Act, 1988
The act defines a 'benami' transaction as any transaction in which property
is transferred to one person for consideration paid by another person.[4][5]
Such transactions were a feature of the Indian economy, usually relating to
the purchase of property (real estate), and were thought to contribute to the
Indian black money problem. The act bans all benami transactions and
gives the government the right to recover property held benami without
paying any compensation.[6]

The act came into force on 5 September 1988. Although benami

transactions are now illegal, the act had limited success in curbing them.
An Act to prohibit benami
Updated versions were therefore passed in 2011 and 2016, seeking to more
transactions and the right to recover
comprehensively enforce the prohibitions. property held benami and for
matters connected therewith or
incidental thereto.
Contents Citation THE BENAMI
TRANSACTIONS
Etymology
(PROHIBITION)
Background
ACT, 1988 [1]; THE
Amendments
BENAMI
Enforcement
TRANSACTIONS
Authorities
(PROHIBITION)
Success
AMENDMENT ACT,
See also
2016[2]
References
Enacted by Parliament of India
External links
Commenced 19 May 1988[3]
Status: In force
Etymology
Benami is an Urdu word that means "without name" or "no name". In this Act, the word is used to define a transaction
in which the real beneficiary is not the one in whose name the property is purchased.[7] As a result, the person in whose
name the property is purchased is just a mask of the real beneficiary.[8]

Background
In 1973, the Law Commission of India after studying various Acts and prevailing benami system, recommended

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formulating an Act to tackle the issue. Accordingly, the Benami Transactions (Prohibition) Act, 1988 was enacted by
the Parliament which came into force on 19 May 1988.[3]

However, due to various deficiencies in the Act, the rules required for operationalizing the Act were not framed. To
address these deficiencies, several years later, in 2011, the Govt of India introduced "Benami Transactions
(Prohibition) Bill, 2011".[3][8]

Amendments
In an attempt to curb black money, in July 2016, Modi government decided to amend the original act[9] which was
subsequently passed by the Parliament of India as "The Benami Transactions (Prohibition) Amendment Act, 2016".
Thereafter, the Government notified the provisions of the act to come into force from 1 November 2016.[7] Mint
newspaper reported that the Benami act along with the Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015, will help the Government in its fight against black money both within and outside the
country. The 2016 Act also has safeguard mechanisms such as the adjudicating authority and the appellate mechanism
for appeals.[10]

The act "prohibits illegal benami transactions, and provides imprisonment up to seven years and fine for violation of
the Act which may extend to 25% of the fair market value of the benami property."[7]

Enforcement

Authorities
The Act establishes four authorities who will be able to conduct inquiries regarding benami transactions[11]:

Sl. Name of
Post of Authority Responsibility
No. Authority

Assistant Commissioner of Income-Tax (ACIT) or a Notice and attachment of

1 Initiating Officer
Deputy Commissioner of Income-Tax (DCIT) property

Approving Additional Commissioner of Income-Tax (AdlCIT)

2 Notice to furnish evidence
Authority or a Joint Commissioner of Income-Tax(JCIT)

Possession and management of

3 Administrator Income Tax Officer (ITO)
properties confiscated

Adjudicating Confiscation and vesting of

4 Officers Drawn from ITD
Authority property

Success
On 26 July 2017, the Modi government told the Rajya Sabha that after coming into force from 1 November 2016,
properties worth over Rs 800 crore (Rs8b/£94.7m/$125m(2017)) are under attachment in more than 400 proxy
transaction cases identified so far. Furthermore, the government has set up 24 Benami Prohibition Units (BPUs)
across India for taking action under the Benami Act.[12]

See also

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Benami Transactions (Prohibition) Act, 1988 - Wikipedia https://en.wikipedia.org/wiki/Benami_Transactions_(Prohibition)_Act,_1988

List of Acts of the Parliament of India

References
1. "THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988" (http://dea.gov.in/sites/default/files/Benami%20Tran
saction_Prohibition_%20Act1988.pdf) (PDF). dea.gov.in.
2. "THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT ACT, 2016" (http://egazette.nic.in/writereaddata/
2016/171245.pdf) (PDF). The Gazette of India. 11 August 2016. Retrieved 10 January 2019.
3. "58th Report of the Standing Committee on Finance on the BTP Bill, 2011" (https://web.archive.org/web/20131022
063537/http://164.100.47.134/lsscommittee/Finance/15_Finance_58.pdf) (PDF). Archived from the original (http://
164.100.47.134/lsscommittee/Finance/15_Finance_58.pdf) (PDF) on 22 October 2013. Retrieved 22 October
2013.
4. "Benami Transaction_Prohibition_ Act, 1988" (https://web.archive.org/web/20130812221150/http://finmin.nic.in/law
/Benami%20Transaction_Prohibition_%20Act1988.pdf) (PDF). Archived from the original (http://finmin.nic.in/law/B
enami%20Transaction_Prohibition_%20Act1988.pdf) (PDF) on 12 August 2013.
5. The Benami Transactions (Prohibition) Act, 1988 (https://books.google.com.au/books?id=8Wn0lpZXv8EC&pg=PA
1). Universal Law Publishing. p. 1. Retrieved 12 July 2015.
6. "Benami Act provisions to come into force from 1 November" (http://www.livemint.com/Politics/kl34fv6i685B7r5u0
NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html). Livemint. Retrieved 17 February 2017.
7. "Smart things to know about benami property transactions" (http://economictimes.indiatimes.com/wealth/real-estat
e/smart-things-to-know-about-benami-property-transactions/articleshow/55634985.cms), The Economic Times, 28
November 2016
8. "Cabinet approves new act to deal with benami transactions" (http://articles.timesofindia.indiatimes.com/2011-07-2
1/india/29799674_1_benami-transactions-benami-property-black-money). The Times Of India. 21 July 2011.
Retrieved 22 October 2013.
9. "Cabinet approves benami transactions bill" (http://www.livemint.com/Politics/hI1oYSBRiHBdiGqljAvPBK/Cabinet-
approves-benami-transactions-bill.html). Retrieved 28 October 2016.
10. "Benami Act provisions to come into force from 1 November" (http://www.livemint.com/Politics/kl34fv6i685B7r5u0
NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html). Retrieved 28 October 2016.
11. "India: Concise Overview Of The Prohibition Of Benami Transactions Act, 1988" (http://www.mondaq.com/india/x/
559548/real+estate/Concise+Overview+Of+The+Prohibition+Of+Benami+Transactions+Act+1988). Mondaq.
12. "Benami properties worth over Rs 800 crore attached: Centre" (http://economictimes.indiatimes.com/news/politics-
and-nation/benami-properties-worth-over-rs-800-crore-attached-centre/articleshow/59776940.cms). Retrieved
26 July 2017.

External links
Text of the Benami Transactions (Prohibitions) Act, 1988 (https://web.archive.org/web/20130812221150/http://finmi
n.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf)

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