New Benami Transactions Informants Reward Scheme, 2018 by the Income Tax Department (Download PDF)

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Income Tax Department has launched New Benami Transactions Informants Reward Scheme, 2018 w/objective to enhance people’s participation in IT Department’s efforts to unearth black money & to reduce tax evasion.

Image of Ministry of Finance

Image of Ministry of Finance

Image of Ministry of Finance

Key Facts of Scheme

  • This reward scheme is aimed at encouraging people to give information about benami transactions & properties as well as income earned on such properties by such hidden investors & beneficial owners.

  • Foreigners will be eligible for such reward. Identity of persons giving information will not be disclosed & strict confidentiality shall be maintained.

  • Govt. had earlier amended Benami Property Transactions Act, 1988, by Benami Transactions (Prohibition) Amendment Act, 2016 to make law stronger.

Need for Scheme

  • It was found in many cases that black money was invested in properties in names of others, even though benefits were enjoyed by investor concealing his beneficial ownership in his tax returns.

  • Objective of new scheme is to obtain people’s participation in IT Department’s efforts to unearth black money & to reduce tax evasion.

Reward Procedure under Scheme

  • Under Benami Transactions Informants Reward Scheme, 2018, person can get reward up to Rs. 1 Cr. for giving specific information in prescribed manner to Joint or Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of IT Department about benami transactions & properties as well as proceeds from such properties which are actionable under Benami Property Transactions Act, 1988, as amended by Benami Transactions (Prohibition) Amendment Act, 2016.

What is Benami?

  • Benami is Hindi term which means “w/o any name”.
  • In legal terms, this is used to define transaction which is done in name of person who is not actual beneficiary, i. e. property is purchased thru false identity.
  • Actual beneficiary finances deal & holds property papers & has rights to sell assets.

Benami Transaction (Prohibition) Amendment Act, 2016

Objectives:

  • Primary aim was to plug lacunae in 1988 rules by clearly defining what constituted benami transactions.

  • Establish relevant adjudicating authorities

  • It sought to set up appellate tribunal to deal w/benami transactions, appeals & specifying penalty for transgressions.

Provisions in Act:

  • Amended definition: Benami transaction in which property is held by or transferred to person, but is provided for or paid by another person. Added other transactions which qualify as benami, such as property transactions where:

  • Transaction is made in fictitious name,

  • Owner is not aware of denies knowledge of ownership of property

  • Person providing consideration for property is not traceable.

Types of Benami Property

  • Benami property may include assets of any kind including movable, immovable, tangible, intangible, any right or assets or legal documents. It includes Gold & financial security.

  • Benamidar as person in whose name benami property is held or transferred, & beneficial owner as person for whose benefit property is being held by benamidar.

Penalty:

  • Person found guilty may have to face rigorous imprisonment of 1 year up to 7 years, & fine which may extend to 25 % of fair market value of benami property.

  • Penalty for providing false information to be rigorous imprisonment of 6 months up to 5 years, & fine which may extend to 10 % of fair market value of benami property.

Appellate Tribunal:

  • It will hear appeals against orders passed by Adjudicating Authority. Appeals against Tribunal orders, in turn, will be heard by High Court.
  • This policy initiative will bring transparency in residential market & able to redress problem of property rates.
  • It will check black money circulation on electoral funding thru unaccounted money from benamidars.
  • This is fight effectively against corruption & drive against black money in India.
  • New scheme will boost revenue collection by bringing more land under tax ambit.
  • Details of reward scheme are available in Benami Transactions Informants Reward Scheme, 2018, copy of which is available in IT offices & on official website of IT Department www.incometaxindia.gov.in.

- Published/Last Modified on: August 17, 2018

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