Benami Transactions (Prohibition) Act, 1988

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The Benami Transactions (Prohibition) Act, 1988
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An Act to prohibit benami transactions and the right to recover property held benami and for matters corrected therewith or incidental thereto.
Citation Act No. 45 of 1988[1]
Enacted by Parliament of India
Date commenced 19 May 1988[2]

Benami Transactions (Prohibition) Act, 1988 is an Act of Parliament of India that prohibits benami transactions and the right to recover property held benami. It came into force on 5 September 1988. The benami transaction is any transaction in which property is transferred to one person for a consideration paid by another person.[3][4]

Etymology[edit]

Benami is a Persian language word that means "without name" or "no name". In this Act, the word is used to define a transaction in which the real beneficiary is not the one in whose name the property is purchased. As a result, the person in whose name the property is purchased is just a mask of the real beneficiary.[5]

Background[edit]

In 1973, the Law Commission of India after studying various Acts and prevailing benami system, recommended formulating an Act to tackle the issue. Accordingly, the Benami Transactions (Prohibition) Act, 1988 was enacted by the Parliament which came into force on 19 May 1988.[2]

However, due to various deficiencies in the Act, the rules required for operationalizing the Act were not framed. To address these deficiencies, several years later, in 2011, the Govt of India introduced "Benami Transactions (Prohibition) Bill, 2011".[2][5]

Technological Help[edit]

Aadhaar is a 12-digit social security number assigned to residents of India for lifetime. It is a digital identity, verifiable online instantly in public domain, at anytime, from anywhere, in a paperless way. Aadhaar is a technological help to Benami law enforcement. It is capable of preventing benami transactions in retail-corruption areas. Its mandatory use in property and financial transactions can be a game-changer.[6][7]

As the public databases are getting inter-linked one by one through Aadhaar number in various states (particularly Delhi),[8] middlemen and officials now find difficult to continue with corruption in social security programs like pensions,[9] scholarships, health,[10] NREGA, subsidy on PDS Ration,[11] kerosene,[12] and LPG.[13]

Ineligible, duplicate and fictitious beneficiaries are getting eliminated from social security programs.[14]

Corrupt people are finding difficult to buy and sell benami land and building,[15] to open and operate benami companies for money-laundering.[16][17] They are also finding difficult to open and operate benami bank accounts for keeping criminal proceeds.[18] Tax-evaders are finding difficult to evade taxes,[19] and impersonation and proxy are getting difficult to commit due to online biometric validation.[20]

References[edit]

  1. ^ "AMENDMENT TO THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988". Retrieved 22 October 2013. 
  2. ^ a b c "58th Report of the Standing Committee on Finance on the BTP Bill, 2011". Retrieved 22 October 2013. 
  3. ^ "Benami Transaction_Prohibition_ Act, 1988". Archived from the original on August 12, 2013. 
  4. ^ http://books.google.com.au/books?id=8Wn0lpZXv8EC&pg=PA1&dq=Benami+Transactions&hl=en&sa=X&ei=AdBSUfCrC8XmkgWWk4GYDA&ved=0CDYQuwUwAQ
  5. ^ a b "Cabinet approves new act to deal with benami transactions". The Times Of India. Jul 21, 2011. Retrieved 22 October 2013. 
  6. ^ "UIDAI makes KYC process paperless to improve customer service". The Times Of India. 2013-08-19. 
  7. ^ http://www.ndtv.com/article/india/aadhaar-mandatory-for-sale-purchase-of-land-in-jharkhand-369823
  8. ^ http://www.ciol.com/ciol/news/155179/aadhaar-mandatory-voluntary-delhi
  9. ^ http://www.tribuneindia.com/2013/20130910/cth1.htm
  10. ^ http://www.ciol.com/ciol/news/123133/uidai-success-national-progress-sheila-dixit
  11. ^ http://www.indianexpress.com/news/govt-goes-hitech-to-curb-ration-card-fraud/486376/
  12. ^ "Kerosene woes: Fair price shops want to go the kirana way". The Times Of India. 2013-08-29. 
  13. ^ "Drive against cooking gas misuse helps government save billion in imports - The Times of India". The Times Of India. 
  14. ^ "Aadhaar remains a must in Delhi". Hindustan Times. 2013-09-24. Retrieved 2013-10-31. 
  15. ^ "Verification for property registration will be Aadhaar-based soon - Mumbai - DNA". Dnaindia.com. 2013-10-03. Retrieved 2013-11-06. 
  16. ^ "Aadhaar to aid anti money laundering measures: FATF". CIOL. 2013-02-28. Retrieved 2013-11-05. 
  17. ^ "Know Your Customer (KYC) Norms /Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT)/Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 – e-KYC Service of UIDAI – Recognising on-line Aadhaar authentication (electronic verification process) to be accepted as an ‘Officially Valid Document’ under PML Rules | taxandregulatoryaffairs". Taxandregulatoryaffairs.wordpress.com. 2013-09-17. Retrieved 2013-11-05. 
  18. ^ http://www.mid-day.com/news/2011/jul/170711-fake-document-racket-PAN-card-sellers.htm
  19. ^ http://www.moneycontrol.com/news/features/fake-pan-cards-availablea-jiffy_276846.html
  20. ^ http://www.dnaindia.com/mumbai/report-verification-for-property-registration-will-be-1897428