Law to curb Benami Property Transactions in Patna



THAN 60 







Image description

To regulate the property market the government of India brought in Prohibition of Benami Transactions Act (2016) on 1st November 2016. The first family of Bihar( Lalus Family) is already feeling the HEAT of this act recently. It will soon affect many more in Patna if implemented and executed timely. Therefore Biharis are eager to know the details of this ACT. The Act is a step towards eradicating “Benaamdaars” from Property market and making it more professional, transparent and organized.

The new act has given NEW definition to Benami transaction and established an appellate tribunal and Adjudication Authority.

A Benami transaction is one where the property is purchased by a person (buyer) in the name of other person. Here the individual on whose name the property is purchased is called “benamdaar” and the property is addressed as Benami property. Property purchased in the name of spouse, son, daughters, relatives or anyone else for which the amount is paid from unknown source of income is called Benami property. In addition any property in Patna held by someone in fiduciary capacity too falls as Benami assets. These transactions are carried mainly to evade tax and hide income from illegal means.

The act bars illegal property deals and provides for imprisonment of up to seven years and a fine which may extend up to 25% of the market value of Benami property. It also provides punishment for providing false and misleading information. The punishment could be imprisonment for six months to five years and a fine of 10% of the fair market value of Benami property. Four authorities will be appointed under this law, viz, Initiating Officer (IO), Approving Authority, Administrator and the Adjudicating Authority.

The IO is authorized to issue notice to benamdaar, and can hold the property for 90 days. If everything is fair the IO allows benamdaar to continue to hold the property under lens otherwise the case is referred to Adjudicating Authority. The authority will further examine the case and will release an order whether the property is Benami or not. Based on this the Administrator will work on the case as per prescribed norms. Finally the tribunal will hear appeal on the Benami property and declare the decision within one year. The tribunal comprises of a chairperson and two other members including a judicial and administrative member.

The law needs to be implemented and executed in time to bear fruitful results for the Patna real estate sector.



MORE articles on Patna Real Estate