Benami Property

  1. A week before Demonetization was announced on November 8, 2016, the Indian Parliament amended an act prohibiting Benami transactions and thus, the Benami Transactions (Prohibition) Amendment Act, 2016 came to force on Novemeber 1.
  2. What is benami property after all?
  3. As per the act, a property is called ‘benami’ if it is held in the name of one person, but the payment has been made by another person from his unknown source of income.
  4. Thus in the benami transactions, real beneficiary is not the one in whose name the property is purchased.
  5. Benami transactions such as property dealings are done to hide the ill gotten money obtained through bribes, extortion, drugs and other illegal activities.
  6. The new act prohibits illegal benami transactions, and there is rigorous imprisonment up to 7 years and penalty which may extend to 25 percent of the value of the benami property.
  7. With the government in complete attack mode, earlier the black money was flushed out and now dealers and owners of such properties would have to face the Modi-fied rules!
  8. The common man need not worry rather cheer up.
  9. Earlier, first they had to pay more to buy property due to inflated prices and then pay bribes to get the property related paper work done. Thus double jeopardy.
  10. Now little scope for black money, lesser scope for corruption and fair chances of abundance of properties that too at lower prices.
  11. The prices were inflated not because there were scarcity of houses, but one person was holding too many benami properties.
  12. This is a welcome move as houses specially in the cities would now be affordable, in the reach of the common man, slum problem can also be addressed, and government’s ‘Housing for all’ programme may be fast-tracked.
  13. Independent India has never seen such a massive drive against corruption and black money.
  14. The moves have also been appreciated by the foreign media and chances are that India’s rank in Transparency International’s (TI) Corruption Perceptions Index (CPI) would improve.
  15. Singapore is also a South East Asian country but is known for its cleanliness in administration and thus investors rush to it.
  16. Hope this makes India a brighter spot on the world map for investment and trade.
  17. However imagine how India would now look like if seen from the Moon? The land of Queues !