Benami deals to be legitimised

Property | admin | July 29, 2011 at 8:46 am

In an attempt to put a lid on benami transactions, the Union Cabinet on Thursday approved the replacement of the existing Benami Transactions (Prohibition) Act 1988 with a new law, Benami transactions (Prohibition) Bill 2011, which will make benami properties liable for confiscation.

Under the new law, properties purchased in the name of spouse or siblings could be allowed under benami deals. It will also ensure that a benami property is liable for confiscation after the person involved has been given "due opportunity'' of being heard.

Speaking after the meeting, information and broadcasting minister Ambika Soni pointed out that properties held by coparcener (one of two or more persons sharing an inheritance) in a Hindu undivided family and properties held by a person in "fiduciary'' capacity are excluded from the definition of benami transaction. "Properties acquired by an individual in the name of spouse, brother or sister or any other lineal ascendant or descendant are benami transactions which are not prohibited,'' she added. Consequently, they are not subject to penal provisions.

A coparcener is an individual who holds property inherited from an ancestor, while a fiduciary is an individual who holds property in trust.

The Cabinet, chaired by PM Manmohan Singh, approved the proposal to introduce the Bill in the monsoon session despite, sources said, opposition from home minister P Chidambaram who said that even in its current form it may not be able to check benami deals. The proposal, however, found strong support from finance minister Pranab Mukherjee and HRD and telecom minister Kapil Sibal. According to the government, the Bill contains elaborate provisions dealing with the definition of benami transaction and property, as also prohibited benami transactions.

Source: Economic Times