Cabinet okays law on benami transactions to curb black money

NEW DELHI: After the measure to bring back black money stashed abroad, government today cleared a bill to deal with benami transactions with confiscation of property and prosecution in a bid to eliminate the menace of domestic unaccounted wealth, especially in realty sector.

The Union Cabinet approved the new Benami Transaction (Prohibition) Bill which provides for stringent measures against violators like confiscation of wealth, imprisonment and fine.

"The Benami Transactions (Prohibition) (Amendment) Bill, 2015 provides for attachment and confiscation of benami properties and also fine with imprisonment. This is one more initiative to fight the menace of black money inside the country," said an official statement issued after the Cabinet meeting.

For decades, benami transactions by nature have been entered into by people who buy immovable and other properties in others' names to avoid tax and disclosure of ownership.

It has been one of the major sources of generation of domestic black money. There are no exact estimates of how much black money is involved in benami transactions.

"As a sequel to the announcement in the budget, the Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to amend the Benami Transactions (Prohibition) Act, 1988 by moving of the Benami Transactions (Prohibition) (Amendment) Bill, 2015 in Parliament," it added.

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.