Are you unknowingly possessing a Benami property?

New Delhi: Prime Minister Narendra Modi declared a war against corruption and claimed that war will not end with the current demonetisation exercise and that his next target would be the one’s owning ‘benami’ property. “We will take action against 'benami' property. This is major step to eradicate corruption and black money. If any money that was looted in India and has left Indian shores, it is our duty to find out about it," he said addressing functions in Panaji, Belagavi in Karnataka and Baramati in Maharashtra. What is Benami property?

• Benami property as the name suggests is the property without a name. Here the transaction happens in the name of someone other than the one who paid for the property.
• The property could be bought in the name of spouse, children or a relative
• The person on whose name the property is bought is known as a ‘benamdar’
• The property is generally held by someone whose current sources of income are insufficient to purchase the owned property
• It could be a joint property with sister, brother, or relatives for which the money is paid out of declared sources of income

  In August, Parliament passed the Benami Transactions (Prohibition) Act, with the assurance from the government that the religious trusts would be kept out of this legislation. As per the new legislation, a person falling under the Benami Act could be imprisoned for seven years, and also a fine could be levied on him or both. What doesn’t fall under Benami Property?

• Property purchased in the name of spouse, relative, child, parents and paid through a declared source of income
• Joint property with brother, sister, spouse, children which is purchased from a known source of income
• Transaction involving a trustee and a beneficiary