The benami transactions bill marks as government’s efforts to control black money and provides for impounding of assets held in the name of another person or under a fake name to avoid taxation and to hide illegally obtained wealth.
The bill will cover the movable, immovable, tangible and intangible properties. In case of joint ownership of property, the tax payer will have to show financing sources.
A major electoral promise of the National Democratic Alliance (NDA) was enactment of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act to catch those who have disguised foreign assets.
This bill, unlike an earlier lapsed version of it, which stipulated either a fine or an imprisonment, provides for a fine of up to 25% of the fair value of the asset and imprisonment of up to seven years.
Revenue secretary Hasmukh Adhia said last week that the government is hopeful of getting the bill passed in the monsoon session of Parliament.
The committee submitted its report in the budget session this year and proposed a host of small changes including providing more time to allow property holders to provide information, initiating investigation and filing appeals.
As said in the cabinet meeting, chaired by Prime Minister Narendra Modi, the amendments aims to strengthen the bill in terms of legal and administrative procedure. The legislation is also intended to effectively bar benami transactions and consequently prevent elusion of law through unfair practices. However, those who declare their benami properties under income declaration scheme will get exemption under the Benami Act.
A government statement said the bill will make all the stakeholders accessible and responsible for upholding the principles underlying the bill.