New Delhi, May 13: In another initiative to fight the menace of black money in the country, the union cabinet on Wednesday approved the introduction of a bill to amend the law that prohibits benami transactions thereby making the legislation more stringent.
"The bill provides for the attachment and confiscation of benami properties and also a fine with imprisonment. This is one more initiative to fight the menace of black money in the country," a communique said after a meeting of the cabinet, presided over by Prime Minister Narendra Modi.
In the budget speech delivered on Feb 28, Finance Minister Arun Jaitley had outlined a number of steps the government intended to take to curb the menace of black money generated in the country -- both in terms of what is retained within the country and stashed away abroad.
"As regards curbing the domestic black money, a new and more comprehensive benami transactions prohibition bill will be introduced in the current session of the parliament," the finance minister had said.
"This law will enable confiscation of benami property and provide for prosecution, thus blocking a major avenue for the generation and holding of black money in the form of benami property, especially in real estate."
The Benami Transactions (Prohibition) Bill, 2011 had been introduced in the Lok Sabha, the lower house of parliament, by the Ministry of Finance on August 18, 2011. But the bill, which would have replaced the existing act of 1988, lapsed.
The bill sought to prohibit a person from entering into a benami transaction and called for any such property held in another person's name to be confiscated by the central government, which shall also hold all its rights and title.
With regards to penalties for benami transactions, the bill proposed a maximum punishment of two years imprisonment. It provided for the aggrieved party to move an Appellate Tribunal for the purpose and again the High Court within 120 days of the tribunal's order.These provisions, however, were not to apply to any transaction entered into by an individual in the name of the mother, father, spouse, brother or sister.
The bill defined benami transaction as an arrangement where:
- The property is held by a person on behalf of another person who has paid for it
- The property has been bought in a fictitious name
- The the owner of the property is not aware of or denies knowledge of such ownership.