The Central Board of Direct Taxes (CBDT) is planning to form a dedicated special unit to investigate and act against 'benamidars' and black money holders having undisclosed foreign income and assets.
The Income Tax Department also on Friday warned those who undertake benami transactions that such acts would invite rigorous imprisonment (RI) of up to seven years under the I-T Act. The tax department said a `strong team' will soon get cracking to effectively deal with benami properties as well undisclosed foreign income and assets.
''There is a serious need of a separate unit, which will only probe and prosecute against benamidars and those black money holders who have undisclosed foreign assets like investigation and assessment unit of the income tax. This unit may be headed by Director General-level officer,'' ANI quoted a senior income tax official as saying.
At present, the joint / additional commissioner of income-tax, an assistant / deputy commissioner of income-tax and a tax recovery officer in each region exercise the powers of the approving authority, initiating officer and administrator respectively under the Prohibition of Benami Property Transactions Act (PBPT).
The Income Tax Department had identified 235 benami properties and attached properties worth Rs55 crore till mid-February.
The Benami Transactions (Prohibition) Amendment Act, 2016 provides for rigorous imprisonment of up to seven years and a fine, which may extend to 25 per cent of the fair market value of the benami property for violations. It also empowers the government to confiscate deposits of the people using others' accounts to convert unaccounted wealth into white money.
A property becomes 'benami' when a person is holding it on behalf of the real owner for any gain. A property transaction in a fictitious name or in which the owner disowns knowledge of the arrangement is also a benami deal and will be covered by the proposed law.
Even movable properties like gold and company stocks will come under the purview of benami transactions.
Benami transactions are one of the main channels of black money investment and the government has been facing heat on black money from the Supreme Court, civil society and the opposition for not doing enough to deal the menace.
Benami transactions are illegal under the Benami Transactions (Prohibition) Act, 1988, as well. However, the existing law does not lay down detailed rules or gives the government power to confiscate benami properties.
The I-T Department has now published advertisements in leading dailies warning the taxpayers. It said, "Do not enter into benami transactions" as the Benami Property Transactions Act, 1988, is "now in action" from November 1, 2016".
"Black money is a crime against humanity. We urge every conscientious citizen to help the government in eradicating it," it said.