The Narendra Modi government today announced a reward scheme to clamp down on benami properties. Under this scheme, the person who passes on any specific information in a prescribed manner to the Joint or Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of Income Tax Department about benami transactions and properties, as well as proceeds from such properties, will be eligible for a reward amounting up to Rs 1 crore.
Alongside another scheme was also announced in which information on undisclosed black money stashed abroad could fetch up to Rs 5 crore for the informant.
The government said that it had found many cases where black money was invested in properties in the names of others, even though the benefits were enjoyed by the investor concealing their ownership in their tax returns. “The government had earlier amended Benami Property Transactions Act 1988 by the Benami Transactions (Prohibition) Amendment Act 2016 to make the law stronger.”
Foreigners will also be eligible for this reward and the details of the informant will always be kept confidential.
Benami property is an asset bought by an individual but not in their own name. These transactions are usually made to utilize the undisclosed income of the buyer to evade taxes.
PM Narendra Modi last year had said the Unique Identification Number will work as a “big weapon” in the fight against benami property too. Union Housing Minister, Hardeep Singh Puri had reportedly said that property transactions would be linked to Aadhaar to eliminate black money from the real estate sector and help in addressing the issue of benami property.
The government had then specified, that once the Aadhaar linkage happens, tax authorities can approach the ‘legal owners’ and it can be treated as benami property if the ‘legal owners are unaware or deny knowledge of the ownership’. The main advantage of this strategy would be that the tax authorities will get details about ‘legal owners’ (owner as per property documents) immediately.
In several addresses to the nation, Mann Ki Baat, Prime Minister Narendra Modi has repeated his plans to root out black money from the system by cracking down on benami properties. Since the beginning of his tenure, Narendra Modi has been extremely vocal about his plans to eliminate black money for our system and has since then taken various measures to ensure that the wrongdoers are penalized.