The Benami Transaction bill has been one of the key highlights of the Union Budget which is expected to boost the home buyer’s confidence by bringing in more transparency into the system. The Benami Transactions (Prohibition) Bill will enable confiscation of Benami property ( property that’s registered in the name of either a fictitious person or a third party to hide identity of the real owner ) and provide them for further prosecution.
Likewise a few other measures are also proposed in the Budget to cut down the influence of black money within the country’s realty sector. The Finance Bill includes a proposal to amend the Income-tax Act to prohibit acceptance or payment of an advance of `20,000 or more in cash for purchase of immovable property. Similarly plans are in the anvil to make PAN as mandatory for any purchase or sale exceeding the value of INR One Lakh.
Also the third party reporting entities would be required to furnish information about foreign currency sales and cross border transactions. Provision is also being made to tackle splitting of reportable transactions. To improve enforcement, CBDT and CBEC will leverage technology and have access to information in each other’s database.
The bill definitely demonstrates the government’s intention and objective to cut down on black money. It should be noted that the real estate is believed to be one of the safe avenues in terms of safeguarding black money. Presently the sector holds a large amount of black money preserved in the form of Benami properties. In Bangalore alone, it is believed that large amount of black money is stored in the form of Benami properties. In fact internal experts believe the amount of Benami properties are higher in Bangalore than even the commercial capital of the nation, owing to the fact that the Silicon Valley has larger parcels of land parcel.
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