I-T department attached benami-properties worth Rs. 4,300cr since new laws
What's the story
Since enacting stringent laws on benami properties in November'16, the Income Tax (I-T) department has attached more than 1,500 such assets collectively worth Rs. 4,300cr. Mumbai and Jaipur top the list, with over 200 benami properties in each city. At 30, Patna saw the least cases, followed by Lucknow (50). However, failure to set up an Adjudicating Authority might render the department's work useless.
Definition
First things first: What are benami properties?
'Benami' properties/assets are those which are not held in the name of the person who paid for it; usually, they are held under names of family members, business associates, employees or friends. The actual owner is unable to establish an income trail for its purchase.
Laws
The laws on benami properties
The Benami Act 1988, although passed, was never implemented or notified, as rules were never prescribed by the government, till November'16. That year, the government amended the Benami Act, and subsequently the 'Benami Transactions (Prohibition) Amendment Act, 2016 (Benami Act) came into effect. In 2011, a 'Benami Transactions (Prohibition) Bill 2011' was introduced by the UPA government, but was never passed.
Lacking
Non-existence of Adjudicating Authority might render some cases invalid
Under this law, the I-T department has attached 144 properties in Kolkata, 110 in Chandigarh and 100 in Hyderabad, among others. But the Act required the government to set up an Adjudicating Authority to decide on the validity of attachment, something not yet done. Resultantly, attachment of 800 properties might be invalidated. Meanwhile, the Adjudicating Authority for the PMLA has been handling these responsibilities.
Rewards
You could earn Rs. 5cr by flagging such properties
To make its work easier, the department announced the Benami Transactions Informants Reward Scheme, under which one earn up to Rs. 5cr by informing the department about benami transactions. The I-T Informants Reward Scheme has also been amended: now a person can get rewards of up to Rs. 50L for specific information on substantial tax evasion under the Income Tax Act, 1961.
Information
With latest steps, department hopes to boost the crackdown
The department has now set up a panel to establish a Benami Adjudicating Authority. "The large volume of cases requires swifter hearing and adjudication, which the PMLA is unable to handle as it is short-staffed for the volumes that are flowing in," a government official explained.