The New Benami Transaction Act

The government is in the process of amending the Benami Transaction Act, which will give it the power to confiscate any property that is declared benami. Under the new Benami Transaction Act, women will be able to acquire assets in the name of their husbands without running the risk of the property being declared benami. Under the existing law, property acquired in the name of the husband by his wife from undisclosed income is considered benami, although the husband could hold a property in his wife’s name. The law defines a benami transaction as a deal in which a property is transferred to one person while the consideration is paid or provided by another person. The new law will set up an authority and empower it to confiscate an asset deemed to be benami if the owner fails to provide proven source of earning. But assets of family members declared benami will not be confiscated. Such a property, however, will remain benami and cannot be claimed as a genuine purchase later by the person who holds it in his name. (Indian Realty News, May 26, 2011)