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]
Status: In force

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]


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]


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]

Benami Transactions (Prohibition) Amendment Bill, 2015[edit]

The comprehensive amendment bill seeks to amend and strengthen Benami Transaction (Prohibition) Act, 1988 in terms of legal and administrative procedure.

Key Features of Bill[edit]

  • The Bill seeks to (i) Amend the definition of benami transactions to widen the scope for legal action (ii) Specify penalties for entering into benami transactions and (iii) establish adjudicating authorities and Appellate Tribunal to deal with benami transactions.
  • It add other transactions which qualify as benami, such as property transactions where: (i) the owner is not aware or denies knowledge of the ownership of the property, (ii) transaction is made in a fictitious name (iii) person providing the consideration for the property is not traceable.
  • The Bill also adds provisions to establish an Appellate Tribunal in order to hear appeals against any orders passed by the Adjudicating Authority. Appeals against orders of the Appellate Tribunal will lie to the high court. The Bill specifies the penalty for providing false information. The punishment includes rigorous imprisonment ranging from 6 months up to 5 years, and a fine which may extend to 25% of the fair market value of the benami property.
  • It also intends to effectively prohibit benami transactions and consequently prevent circumvention of law through unfair practices. It empowers the Union Government to confiscate benami property by following due procedure. Therefore it promotes equity across all citizens. The Bill provides immunity under the Benami Act to those who declare their benami properties under income declaration scheme.[6]

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 any time, 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.[7][8]

As the public databases are getting inter-linked one by one through Aadhaar number in various states 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]

See also[edit]


  2. ^ a b c "58th Report of the Standing Committee on Finance on the BTP Bill, 2011" (PDF). Retrieved 2013-10-22. 
  3. ^ "Benami Transaction_Prohibition_ Act, 1988" (PDF). Archived from the original (PDF) on 2013-08-12. 
  4. ^ The Benami Transactions (Prohibition) Act, 1988. Universal Law Publishing. p. 1. Retrieved 2015-07-12. 
  5. ^ a b "Cabinet approves new act to deal with benami transactions". The Times Of India. Jul 21, 2011. Retrieved 2013-10-22. 
  6. ^
  7. ^ "UIDAI makes KYC process paperless to improve customer service". The Times Of India. 2013-08-19. 
  8. ^ "Aadhaar mandatory for sale, purchase of land in Jharkhand". Retrieved 2015-07-12. 
  9. ^ "The Tribune, Chandigarh, India - Chandigarh Stories". Retrieved 2015-07-12. 
  10. ^ "UIDAI success is national progress: Sheila Dixit - CIOL". Retrieved 2015-07-12. 
  11. ^ "Govt goes hi-tech to curb ration card fraud - Indian Express". Retrieved 2015-07-12. 
  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". 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". 2013-09-17. Retrieved 2013-11-05. 
  18. ^ "Fake PAN card seller gang busted". Retrieved 2015-07-12. 
  19. ^ "-". Retrieved 2015-07-12. 
  20. ^ "Verification for property registration will be Aadhaar-based soon | Latest News & Updates at Daily News & Analysis". Retrieved 2015-07-12. 

External links[edit]