Benami Transactions (Prohibition) Amended Act, 2016

Benami Transactions (Prohibition) Amended Act, 2016 prohibits benami transactions and provides for confiscating benami properties, the act replaced Benami Transactions Act, 1988.

What is Benami Transactions (Prohibition) Act, 2016 ?

According to the act a benami transaction is a transaction, where a property is held by or transferred to a person, but has been provided for or paid by another person.

It also includes properties where the transaction is made in a fictitious name, the on paper owner of the property is not aware of or denies knowledge of the ownership and the property whose on paper owner is not traceable.

As per the act's provisions a "Benamidar" is a person in whose name the benami property is held or transferred, while a "Beneficial owner" is a person who actually benefitted from the property held by the benamidar.

Exemption under Benami Transactions (Prohibition) Act, 2016

According to the act excemptions are given to certain properties:

1) A property held by a member of a Hindu undivided family for his or another family member's benefit, paid off from sources of income of that family.
2) A property held by a person in a fiduciary(trustable) capacity.
3) A property paid by a person's income, but registered in the name of his/her spouse or child.

An Authority is established under the act to acquire benami properties, and four authorities to conduct inquiries or investigations:

1) Initiating Officer: Initiating Officer issue a notice to suspected benamidar, and may hold the property for 90 days from the date of issue of the notice, subject to permission from the Approving Authority. At the end of the notice period, the Initiating Officer may pass an order to continue the holding of the property as benami.

2) Adjudicating Authority: The Initiating Officer will refer the case to the Adjudicating Authority, who will decide whether or not to hold the property as benami based on examining all documents and evidence relating to the matter.

3) Administrator: In case an order of confiscating the property is passed, the Administrator will receive and manage the property in a manner and subject to conditions as prescribed.

4) Approving Authority: Initiating Officer hold the property as benami based on permission from the Approving Authority.

An Appellate Tribunal is also created under the act to hear appeals against any orders passed by the Adjudicating Authority. Appeals against orders of the Appellate Tribunal will be heared by the high court.

According to the act an entry into benami transactions will attract rigorous imprisonment up to seven years, or a fine upto 25 per cent of the fair market value of the property, or both.

The act also has provisions for certain sessions courts to be designated as Special Courts for trying any offences which are punishable under the act.

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