Govt introduces bill in Lok Sabha to check benami transactions

The government on Wednesday introduced amendments to the Benami Transactions (Prohibition) Act, 1988, hours after the Lok Sabha passed a bill to bring back black money stashed abroad.

Minister of state for finance Jayant Sinha introduced the Benami Transactions (Prohibition) Bill as the House was to conclude the budget session.

The union cabinet had earlier in the day approved the new Benami Transaction (Prohibition) Bill which provides for stringent measures against violators, in yet another effort to check generation of black money in the country.

For decades, benami transactions 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 reliable estimates of how much black money is involved in benami transactions.

The amended bill proposes to limit the scope of such transactions to close relatives like husband and wife or children.

The original Act was enacted in 1988, but the rules under it could not be formulated due to inherent infirmities in it.

The new bill provides for attachment and confiscation of benami properties and fine and  imprisonment.

"The department of revenue in consultation with the legislative department has amended the Benami Transactions (Prohibition) Act, 1988," an official statement said.

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.

This is a sequel to the announcement in the Budget for 2015-16. The government had in the Budget 2015-16, presented at the end of February, announced that it would come out with a new and more comprehensive Benami Transactions (Prohibition) Bill.

The Benami Transactions (Prohibition) Act was earlier enacted in 1988, but the rules under that Act could not be formulated due to inherent infirmities in it.

Again, in 2011, the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.

The bill was referred to the standing committee on finance for examination, which submitted its report in June 2012. However, the bill lapsed with the dissolution of 15th Lok Sabha.