Benami Transactions (Prohibition) Act, 1988 - Revision history

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	'''Benami Transactions (Prohibition) Act, 1988''' (name changed to '''Prohibition of Benami Property Transactions Act, 1988''' by section 3 of the 2016 amendment<ref>[http://egazette.nic.in/WriteReadData/2016/171245.pdf Gazette notification of the 2016 amendment]</ref>) is an [[Act of Parliament\|Act]] of the [[Parliament of India]] that prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for consideration paid by another person.<ref name="BTPA, 1988">{{cite web\|title=Benami Transaction_Prohibition_ Act, 1988\|url=http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf\|archive-url=https://web.archive.org/web/20130812221150/http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf\|archive-date=2013-08-12}}</ref><ref name="google">{{cite book\|title=The Benami Transactions (Prohibition) Act, 1988\|publisher=Universal Law Publishing\|url=https://books.google.com/books?id=8Wn0lpZXv8EC&pg=PA1\|page=1\|access-date=2015-07-12}}</ref> Such transactions were a feature of the [[economy of India\|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.<ref>{{cite web\|title=Benami Act provisions to come into force from 1 November\|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html\|website=Livemint\|access-date=17 February 2017}}</ref>		'''Benami Transactions (Prohibition) Act, 1988''' (name changed to '''Prohibition of Benami Property Transactions Act, 1988''' by section 3 of the 2016 amendment<ref>[http://egazette.nic.in/WriteReadData/2016/171245.pdf Gazette notification of the 2016 amendment]</ref>) is an [[Act of Parliament\|Act]] of the [[Parliament of India]] that prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for consideration paid by another person.<ref name="BTPA, 1988">{{cite web\|title=Benami Transaction_Prohibition_ Act, 1988\|url=http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf\|archive-url=https://web.archive.org/web/20130812221150/http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf\|archive-date=2013-08-12}}</ref><ref name="google">{{cite book\|title=The Benami Transactions (Prohibition) Act, 1988\|publisher=Universal Law Publishing\|url=https://books.google.com/books?id=8Wn0lpZXv8EC&pg=PA1\|page=1\|access-date=2015-07-12}}</ref> Such transactions were a feature of the [[economy of India\|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.<ref>{{cite web\|title=Benami Act provisions to come into force from 1 November\|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html\|website=Livemint\|date=28 October 2016 \|access-date=17 February 2017}}</ref>

	The act came into force on 5 September 1988. Although benami transactions are now illegal, the act had limited success in curbing them. Updated versions were therefore passed in 2011 and 2016, seeking to more comprehensively enforce the prohibitions.		The act came into force on 5 September 1988. Although benami transactions are now illegal, the act had limited success in curbing them. Updated versions were therefore passed in 2011 and 2016, seeking to more comprehensively enforce the prohibitions.
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	==Amendments==		==Amendments==
	In an attempt to curb black money, in July 2016, [[Modi government]] decided to amend the original act<ref>{{cite news\|title=Cabinet approves benami transactions bill\|url=http://www.livemint.com/Politics/hI1oYSBRiHBdiGqljAvPBK/Cabinet-approves-benami-transactions-bill.html\|access-date=28 October 2016}}</ref> 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.<ref name=et1116/> [[Mint (newspaper) \| 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.<ref>{{cite news\|title=Benami Act provisions to come into force from 1 November\|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html\|access-date=28 October 2016}}</ref>		In an attempt to curb black money, in July 2016, [[Modi government]] decided to amend the original act<ref>{{cite news\|title=Cabinet approves benami transactions bill\|url=http://www.livemint.com/Politics/hI1oYSBRiHBdiGqljAvPBK/Cabinet-approves-benami-transactions-bill.html\|access-date=28 October 2016}}</ref> 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.<ref name=et1116/> [[Mint (newspaper)\|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.<ref>{{cite news\|title=Benami Act provisions to come into force from 1 November\|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html\|access-date=28 October 2016}}</ref>

	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."<ref name=et1116/>		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."<ref name=et1116/>
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	{{Taxation in India}}		{{Taxation in India}}
	~~{{Indian legislations}}~~

	[[Category:Taxation in India]]		[[Category:Taxation in India]]

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{{use dmy dates|date=July 2016}}
{{use Indian English|date=July 2016}}{{Infobox legislation
| short_title = The Benami Transactions (Prohibition) Act, 1988
| imagesize = 100
| imagealt =
| long_title = An Act to prohibit benami transactions and the right to recover property held benami and for matters connected therewith or incidental thereto.
| citation = THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988;<ref>{{cite web |url= http://dea.gov.in/sites/default/files/Benami%20Transaction_Prohibition_%20Act1988.pdf| website= dea.gov.in|title= THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988}}</ref>
THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT ACT, 2016<ref>{{cite web|url= http://egazette.nic.in/writereaddata/2016/171245.pdf|website= The Gazette of India|title= THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT ACT, 2016|date= August 11, 2016|access-date= January 10, 2019}}</ref>
| enacted_by = [[Parliament of India]]
| date_commenced = 19 May 1988<ref name="committee report on the BTP Bill, 2011"/>
| status = in force
}}

'''Benami Transactions (Prohibition) Act, 1988''' (name changed to '''Prohibition of Benami Property Transactions Act, 1988''' by section 3 of the 2016 amendment<ref>[http://egazette.nic.in/WriteReadData/2016/171245.pdf Gazette notification of the 2016 amendment]</ref>) is an [[Act of Parliament|Act]] of the [[Parliament of India]] that prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for consideration paid by another person.<ref name="BTPA, 1988">{{cite web|title=Benami Transaction_Prohibition_ Act, 1988|url=http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf|archive-url=https://web.archive.org/web/20130812221150/http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf|archive-date=2013-08-12}}</ref><ref name="google">{{cite book|title=The Benami Transactions (Prohibition) Act, 1988|publisher=Universal Law Publishing|url=https://books.google.com/books?id=8Wn0lpZXv8EC&pg=PA1|page=1|access-date=2015-07-12}}</ref> Such transactions were a feature of the [[economy of India|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.<ref>{{cite web|title=Benami Act provisions to come into force from 1 November|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html|website=Livemint|access-date=17 February 2017}}</ref>

The act came into force on 5 September 1988. Although benami transactions are now illegal, the act had limited success in curbing them. Updated versions were therefore passed in 2011 and 2016, seeking to more comprehensively enforce the prohibitions.

==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.<ref name=et1116>{{citation |title=Smart things to know about benami property transactions |url=http://economictimes.indiatimes.com/wealth/real-estate/smart-things-to-know-about-benami-property-transactions/articleshow/55634985.cms |work=[[The Economic Times]] |date=28 November 2016 }}</ref> As a result, the person in whose name the property is purchased is just a mask of the real beneficiary.<ref name="Amendment - 2011">{{cite news|title=Cabinet approves new act to deal with benami transactions|url=http://articles.timesofindia.indiatimes.com/2011-07-21/india/29799674_1_benami-transactions-benami-property-black-money|archive-url=https://web.archive.org/web/20130423025527/http://articles.timesofindia.indiatimes.com/2011-07-21/india/29799674_1_benami-transactions-benami-property-black-money|url-status=dead|archive-date=April 23, 2013|access-date=2013-10-22|work=[[The Times of India]]|date=Jul 21, 2011}}</ref>

==Background==
In 1973, the [[Law Commission of India]] after studying various Acts and prevailing benami system, recommended formulating an Act to tackle the issue. Accordingly, the Benami Transactions (Prohibition) Act, 1988 was enacted by the [[Parliament of India|Parliament]] which came into force on 19 May 1988.<ref name="committee report on the BTP Bill, 2011">{{cite web|title=58th Report of the Standing Committee on Finance on the BTP Bill, 2011|url=http://164.100.47.134/lsscommittee/Finance/15_Finance_58.pdf|access-date=2013-10-22|archive-url=https://web.archive.org/web/20131022063537/http://164.100.47.134/lsscommittee/Finance/15_Finance_58.pdf|archive-date=22 October 2013|url-status=dead}}</ref>

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".<ref name="committee report on the BTP Bill, 2011"/><ref name="Amendment - 2011"/>

==Amendments==
In an attempt to curb black money, in July 2016, [[Modi government]] decided to amend the original act<ref>{{cite news|title=Cabinet approves benami transactions bill|url=http://www.livemint.com/Politics/hI1oYSBRiHBdiGqljAvPBK/Cabinet-approves-benami-transactions-bill.html|access-date=28 October 2016}}</ref> 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.<ref name=et1116/> [[Mint (newspaper) | 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.<ref>{{cite news|title=Benami Act provisions to come into force from 1 November|url=http://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.html|access-date=28 October 2016}}</ref>

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."<ref name=et1116/>

==Enforcement==
===Authorities===
The Act establishes four authorities who will be able to conduct inquiries regarding benami transactions:<ref>{{cite web| url=http://www.mondaq.com/india/x/559548/real+estate/Concise+Overview+Of+The+Prohibition+Of+Benami+Transactions+Act+1988|title=India: Concise Overview Of The Prohibition Of Benami Transactions Act, 1988| website= Mondaq}}</ref>
{| class="wikitable"
|-
! Sl. No. !! Name of Authority !! Post of Authority !! Responsibility
|-
| 1 || Initiating Officer || Assistant Commissioner of Income-Tax (ACIT) or a Deputy Commissioner of Income-Tax (DCIT) || Notice and [[attachment (law)|attachment]] of property
|-
| 2 || Approving Authority || Additional Commissioner of Income-Tax (AdlCIT) or a Joint Commissioner of Income-Tax(JCIT) || Notice to furnish evidence
|-
| 3 || Administrator || Income Tax Officer (ITO) || Possession and management of properties confiscated
|-
| 4 || Adjudicating Authority || Officers Drawn from ITD || Confiscation and vesting of property
|}

===Results===
On 26 July 2017, the [[Modi government]] told the [[Rajya Sabha]] that after coming into force from 1 November 2016, properties worth over {{INRConvert|800|c|year=2017|mode=historical}} were 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.<ref>{{cite news|title=Benami properties worth over Rs 800 crore attached: Centre|url=http://economictimes.indiatimes.com/news/politics-and-nation/benami-properties-worth-over-rs-800-crore-attached-centre/articleshow/59776940.cms|access-date=26 July 2017}}</ref>

==See also==
* [[List of Acts of the Parliament of India]]

==References==
{{Reflist|30em}}

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

{{Taxation in India}}
{{Indian legislations}}

[[Category:Taxation in India]]
[[Category:Acts of the Parliament of India 1988]]
[[Category:Anti-corruption measures in India]]
[[Category:Modi administration]]