by Real Estate is one of the major sectors for generation & investment of unaccounted money known as “black money”. The Benami Act is to curb black money transactions to ensure that all real estate transactions are conducted in the name of the actual owner where the consideration is paid from his known sources.
This will increase the tax revenue for the Govt by stopping black money from pumping into the system and will help in bringing down corruption and unfair trade practices. Moreover, it will increase transparency & honesty in the real estate dealings.
What is Benami Transaction Act 2017
The Benami Transactions Prohibition Act 2017 would become operational from February 8 but would be applicable from the date the president gave its nod, said Dr Hamid Ateeq Sarwar, FBR Member Inland Revenue Policy.
The aim of the Benami Transaction Act is to prohibit benami transactions. It states that any person entering into a benami transaction shall be liable for prosecution.
After a delay of more than two years, the Federal Board of Revenue (FBR) announced that the Benami Transactions Prohibition Act would finally become operational this week after a gap of two years, which would empower taxmen to confiscate properties and bank accounts registered with fictitious individuals.
Parliament approved the law in January 2017 and the president gave his stamp of approval the next month. In the last two years, bureaucrats and politicians successfully delayed application of the law on flimsy grounds. The decision to make the law operational was taken last week during a meeting chaired by Prime Minister Imran Khan.
What is Benami Property
Benami literally meaning “without a name”. Therefore an asset without a legal owner or a fictitious owner is called benami. It can be a property of any kind, whether moveable or immovable, acquired by way of benami transaction. So its, “Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami and the property is called Benami Property.
Properties which comes into the scope of Benami Act
Benami Act encompasses all kind of properties whether movable or immovable.
Punishment for entering into the Benami Transaction
As per the provisions of the Act, entering into benami transactions is prohibited. Anyone who enters into any benami transaction shall be punishable with imprisonment according to the law. In addition to this, good percentage of fine on the market value of benami property.
Properties that are held as benami are liable to be confiscated by the Govt without payment of any compensation.
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