Prime Minister Narendra Modi who is in Himachal Pradesh ahead of the assembly elections, hinted at a major crackdown against benami property on Saturday afternoon. During his speech, PM Modi said that Congress is worried as such assets of its leaders will not be spared in his government’s action. Launching a stinging attack on the opposition party over corruption at an election rally in Sundernagar, Modi said the Congress’ campaign against demonetisation was driven by its attempts to mislead the people and create an atmosphere against him before he can raise a “storm” over benami assets. “The time has come to return to the poor what had been robbed of them…. I am going to create a situation that they (Congress leaders) would not be able to reclaim their benami assets,” he said. These strong words from the Prime Minister once again lead us to the question, what is a benami property. Well, here is all you need to know:
1. Going by the literal meaning, benami is a property without any name. It is the kind of transaction where the person who pays for the property does not buy it under his/her own name.
2. The person in whose name this type of property is bought is called, benamdar and the property so purchased is called the benami property.
3. Even though a benami property is purchased on the name of someone else, the person who finances the deal is the real owner.
4. The property is held for the benefit – direct or indirect – of the person paying the amount.
5. Usually, a property purchased in the name of spouse or child for which the amount is paid out of known sources of income is called the benami property. Apart from this, a property held by someone in a fiduciary capacity also falls in the same category.
6. This means, by law, if you buy a property in name of your parents, too, can be declared as benami.
7. The Parliament had passed the Benami Transactions (Prohibition) Act, with the assurance from Finance Minister Arun Jaitley that genuine religious trusts would be kept out of the purview of this new legislation.
8. This new Act will make a provision of seven-year imprisonment and fine, replacing the three-year jail term, or fine, or both.
9. Assets of any kind — movable, immovable, tangible, intangible, any right or interest, or legal documents. As such, even gold or financial securities could qualify to be benami.
10. The benami act was introduced to curb on black money. It brings people with unaccounted income under the scanner.