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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}} | ||
[[Category:Taxation in India]] | [[Category:Taxation in India]] | ||