Benami Transactions Amendment Act 2016
The amendment of the above act is to amend the prohibition of Benami Property transactions act 1988. The effect of this amendment act is retrospective i.e. with effect from 1988.
- After the introduction of the provision of Benami transactions act, 1988, as there were some infirmities in the said 1988 act and to set right the rules were required to be framed but as the rules were not framed as such the said act 1988 did not come into force.
- However, later a new bill, “The Benami Transactions Prohibition) bill, 2011, was to replace the provisions of “The Benami Transactions Prohibition) act 1988, was introduced in lok sabha in July 2011. this bill was referred to the standing committee on Finance by Loksabha for its examination. the report was submitted by the standing committee in July 2012. The standing committee made various recommendations and suggested changes to the proposed bill which was introduced in the loksabha. But The Benami Transactions Prohibition) bill 2011 however lapsed in view of the dissolution of the 15th
- the new bill The Benami Transactions Prohibition) bill 2015 incorporating the various features was prepared and forwarded to the ministry of Law. It was suggested by the ministry of law that it would be advisable to comprehensively amend the existing provisions of The Benami Transactions Prohibition) act 1988, so that the offences committed during the last 26 years are also covered. this would enable action against The benami Transactions” took place on or after 1988 Act.
- Taking into account the provisions of The benami Transactions Prohibition (Amendment) bill 2015, the standing committee on finance headed by Dr.M.Veerappa Moily, has suggested comprehensive changes to the existing The Benami Transactions Prohibition) act 1988. therefore the present amendment act 2016 is to amend the 1988 and not proposing a new Act.
- In this background, The benami Transactions Prohibition) Amendment act 2016 has come into force;
- But no where the definition of The Benami Transactions “ as per the amendment act 2016, needs to be examined taking note of the following to evaluate whether the transactions for acquiring land fills out of the ambit of The Benami Transactions”
- The Funds used for acquiring the land/Immovable property shall be out of Known source of Income”
- The acquisition/holding of land/immovable property should be a genuine and bonafide transaction:
- The transactions to acquire/hold the land/immovable property should be under bonafide arrangements entered into in relation to transfer of immovable property
- Any bonafide transition should not be deemed as Benami” when it involves transfer of Immovable property entered into under:
- a registered agreement to sell
- A registered GPA
- A registered Development agreement on payment of stamp duty.
- Benami Transaction does not cater to situation where the consideration is bonafide, with paid or provided by a lender under a Financial arrangement.
A transaction or an arrangement- the property is used for the immediate or future profit, direct or indirect, of the person who has provided the consideration, except when the property is held by a person standing in a fiduciary capacity for the profit of another person towards whom he stand in Such Capacity.