Amendment in Benami Act

Amendment in Benami Act

There is a proposal to amend the Benami Act. The Benami Transactions (Prohibition) Amendment Bill, 2015 was introduced in the Lok Sabha on 13^th May, 2015 to amend the Benami Transactions (Prohibition) Act, 1988.  

            Any transaction within the definition of ‘benami transaction’ shall attract consequential action under the Benami Transactinos (Prohibition) Act, 1988 after the enactment of the Benami Transactions (Prohibition) Amendment Bill, 2015. Clause 4 of the Benami Transactions (Prohibition) Amendment Bill, 2015 defines a “benami transaction” to mean, - 

·        a transaction or an arrangement – 

-        where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and

-        the property is held for the immediate for future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by- 

·        a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of income of the Hindu undivided family;

·        a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 and any other person as may be notified by the Central Government for this purpose; 

-        any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of income of the individual;

-        any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother and sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of income of the individual; or