Parliament on Tuesday passed a law to curb undisclosed money, particularly in real estate, the Benami Transactions (Prohibition) Amendment Bill, stiffening a 1988 enactment.
Those declaring black money and assets under the ongoing Income Declaration Scheme, ending September 30, would get immunity from its provisions.
The Rajya Sabha approval came on Tuesday. The Lok Sabha had already passed it.
The legislation will enable confiscation of benami property (held, illegally, in another's name) and provide for prosecution, aiming to block a major avenue for generation and holding of undisclosed money.
“I hope people get the clear signal and don’t give the state an opportunity to use this law,” said Finance Minister Arun Jaitley.
He said the multi-agency group probing the ‘Panama Papers’ evidence leak, naming around 500 Indians who've allegedly stashed money in offshore entities, had given three reports last month. “The investigations have progressed a lot,” he said.
He added the government had taken action in the case of earlier allegations — the HSBC accounts, Liechtenstein Bank and the information provided by the International Consortium of Investigative Journalists.
In a relief to a large number of property buyers and sellers, transfer through ‘power of attorney’ will be out of the ambit of the new change, the legislation clarifies. Most Delhi Development Authority properties are sold using this provision.
The definition of a benami transaction has been widened to include a transaction made in a fictitious name; where the owner is not aware of or denies knowledge of the ownership of the property; or the person providing the consideration for the property is not traceable.
Jaitley said fiduciary and trustee holding is allowed but the investment should be made from known sources of income. He said the law also provides for genuine property purchases which could have been funded by family members or other sources as a loan. The earlier term of ‘known source of income’ has been replaced with ‘known sources’ with regard to purchase of property.
He also said property outside the country will not be covered under this law but be dealt with under the black money law. The minister said sufficient safeguards had been put in place to prevent any misuse of the provisions. “Four layers of officers and an appeal tribunal has been created, since this is a major power,” he said.
On properties in tribal areas, he said those can be exempted from the purview by order of the governor of the state concerned.On concerns being expressed over mandatory use of a PAN (income tax identity) card for purchase of high value properties, he said about 220 million had been issued and anyone spending lakhs of rupees could obtain it online.
On concerns being expressed over mandatory use of a PAN (income tax identity) card for purchase of high value properties, he said about 220 million had been issued and anyone spending lakhs of rupees could obtain it online.
He added that states were digitising their land records and this would help in dealing with black money.
Business Standard New Delhi,03 August 2016
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