Following the demonetization of Rs. 500
and 1000 banknotes in India in 2016, Indian Prime Minister Mr. Narendra Modi
efficaciously stated that Benami Property would be his next target. The Hon'ble
Prime Minister also claimed to be tearing down the wealthy's black money and
constructing a far brighter future for the honest citizens of the world's
largest democracy. This aim was finalized after analysing the hasty ratio of
abrupt misusage of the flaw of the Benami Transactions (Prohibition) Act, 1988.
Before we begin, we must define the
term "Benami property"; a Benami transaction is one in which the
property is transferred to an individual but the acquisition cost is paid by
another individual. The negative thesis for this transaction is that
if there is a person named 'Z' who possesses a huge chunk of
black money. 'Z' will now acquire a property in the name of 'X' in order
to protect his pile of black money. The crucial thing to note is that,
while Mr. 'X' will own the property on paper, Mr. 'Z', the actual black money holder,
will enjoy possession of it.
The 1988 act was designed to eliminate
the conduct of Benami transactions in Indian territory. Nevertheless, the
aforementioned statute was in dire need of being amended and
transmogrify into far more substantial legislation. It may have been
late, but indeed yes, the requisite modifications were bought in 2016 viz 28
years after the program's inception.
The 2016 amendment fundamentally
rejuvenated the face of the act itself; provisions, clauses, and sections were
meticulously measured and altered to meet the needs of modern society. The
authorities are ordered to rigorously analyse and investigate each and every
transaction and contract. If the investigating authorities discover that the
buyer is financially unfit to purchase any explicit property, movable or
immovable, they will be given a legal notice to submit the source of their
income; if the suspect succeeds in satisfying the respectful authorities,
he/she will be given a clean chit and thus will be proven innocent. At the drop
of the hat, if the suspect fails to satisfy the authorities' questions, they
will be treated in accordance with the law.
Since every single bit matters,
petite tweaks in the procedure such as mandating a PAN number, deduction of
TDS in the event of property worth more than INR 50 lakhs, and many more
improvements such as these have crammed the grey areas in the 1988 legislation.
The implementation of this modification is viewed as a significant change in
the Benami transactions; such transactions are said to be regarded as history
from now onwards. In India, according to family custom, property is frequently
held in the name of the father/mother as a symbol of respect, although the
finances are given by the kid. Such transactions are now protected by the new
Benami statute.
As a result, just as a single candle
may both defy and define the darkness, if a constructive measure is performed,
there would be some bad ramifications as well, and since no coin is
single-sided, there were several occurrences of the misappropriation of power
for collateral intentions. These robust provisos grasped many innocent
individuals into its form hold and concluded the decisions as unfair and
unjust.
For an illustration,
Mr. Ram was to purchase a property from
Mr. Ajay, but it was subsequently revealed that the property in question is a
Benami property, implying that Mr. Ajay was holding the property as a benamidar
of the individual who first paid consideration to purchase the property. The
government may seize the property, and even if Mr. Ram paid consideration from
stated and known sources, he would be susceptible to penalties under the Act.
There might be many more cases where
legitimate transactions get caught up in the rigours of the new rule. While the
objective is impressive, the authorities' interpretation and execution of the
law may lead up to the harassment of a genuine and honest individual.
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