To get people’s participation in the Income Tax Department’s efforts to unearth black money and to reduce tax evasion

Posted On: 01 JUN 2018

It was found in many cases that black money was invested in properties in the names of others, even though benefits were enjoyed by the investor concealing his beneficial ownership in his tax returns. The Government had earlier amended Benami Property Transactions Act, 1988, by Benami Transactions (Prohibition) Amendment Act, 2016 to make the law stronger. With the objective of obtaining people’s participation in the Income Tax Department’s efforts to unearth black money and to reduce tax evasion, a new reward scheme titled “Benami Transactions Informants Reward Scheme, 2018”, has been issued by the Income Tax Department. This reward scheme is aimed at encouraging people to give information about benami transactions and properties as well as income earned on such properties by such hidden investors and beneficial owners.

Under the Benami Transactions Informants Reward Scheme, 2018, a person can get reward up to Rs. One crore for giving specific information in prescribed manner to the Joint or Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of Income Tax Department about benami transactions and properties as well as proceeds from such properties which are actionable under Benami Property Transactions Act, 1988, as amended by Benami Transactions (Prohibition) Amendment Act, 2016.

Foreigners will also be eligible for such reward. Identity of the persons giving information will not be disclosed and strict confidentiality shall be maintained.

Details of the reward scheme are available in the Benami Transactions Informants Reward Scheme, 2018, copy of which is available in Income Tax offices and on the official website of Income Tax Department www.incometaxindia.gov.in.

PIB

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Though the Benami Transactions (Prohibition) Act, 1988 has been on the statute book since more than 28 years, the same could not be made operational because of certain inherent defects. With a view to providing effective regime for prohibition of benami transactions, the said Act was amended through the Benami Transactions (Prohibition) Amended Act, 2016. The amended law empowers the specified authorities to provisionally attach benami properties which can eventually be confiscated. Besides, if a person is found guilty of offence of benami transaction by the competent court, he shall be punishable with rigorous imprisonment for a term not less than one year but which may extend to 7 years and shall also be liable to fine which may extend to 25% of the fair market value of the property.

The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from1st November, 2016. Several benami transactions have been identified since the coming into effect of the amended law. Show cause notices for provisional attachment of benami properties have been issued in 140 cases involving properties of the value of about Rs. 200 crore. Out of these, provisional attachment has already been effected in 124 cases. The benami properties attached include deposits in bank accounts and immovable properties.

The Government has put in place empowered institutions for efficient implementation of the amended law. In exercise of powers conferred under sub-section (2) of section 28 read with section 59 of the amended Prohibition of Benami Property Transactions Act, 1988, vide Notification No. SO 3290E, dated 25.10.2016 the Central Government has notified specified Income-tax authorities to act as Initiating Officer, Approving Authority and Administrator in respect of benami transactions. Further, vide Notification No. SO 3288E, dated 25.10.2016, the Adjudicating Authority has been notified

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

PIB

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New Delhi: The Cabinet today approved the new Benami Transaction (Prohibition) Bill which aims at curbing the generation of domestic black money.

“The Union Cabinet has approved the new Benami Transaction (Prohibition) Bill to curb generation of black money,” said a source after the Cabinet meeting here.

Apart from confiscation, the Bill provides for prosecution and aims to act as a major avenue for blocking generation and holding of black money in the form of benami property, especially in real estate.

The government had in Budget 2015-16, presented at the end of February, announced that it would come out with a new and more comprehensive Benami Transactions (Prohibition) Bill.

The Benami Transactions (Prohibition) Act was earlier enacted in 1988, but the rules under that Act could not be formulated due to inherent infirmities in it.

Following this, in 2011 the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.

The Bill was referred to the Standing Committee on Finance for examination, which submitted its report in June 2012.

However, the Bill lapsed with the dissolution of 15th Lok Sabha.
PTI

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New Delhi: A new Benami bill, aimed at curbing generation of domestic black money, will soon be brought before the Cabinet, government told the Lok Sabha today.

“As regards the Benami Bill, the redrafted Act is at a very advanced stage… A more modern Benami bill has been drafted. It will reach the Cabinet any day,” Finance Minister Arun Jaitley said.

Apart from confiscation, the Bill would provide for prosecution and would aim to act as a major avenue for blocking generation and holding of black money in the form of benami property, especially in real estate.

Jaitley said the inclusion of the parallel economy of black money into the main economy, would help government to lower tax rates.

“The need to curb domestic black money is extremely important. We need to bring slowly more and more of our economy into declared economy. This has ability to bring up tax collection, GDP, enables to help the government to bring down the taxation.

“If parallel black money comes into the economy, then the taxes go down,” Jaitley said.

The government had in Budget 2015-16, presented at the end of February, announced that it would come out with a new and more comprehensive Benami Transactions (Prohibition) Bill.

The Benami Transactions (Prohibition) Act was earlier enacted in 1988, but the rules under that Act could not be formulated due to inherent infirmities in the Act.

Following this, in 2011 the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.

The Bill was referred to the Standing Committee on Finance for examination, which submitted its report in June 2012. However, the Bill lapsed with the dissolution of 15th Lok Sabha.

PTI

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