After demonetization the new buzzword is Black Money. The Government is chasing black money hidden in cash, gold and real estate. The Government is real serious on Benami transactions. You can expect major steps to impose financial curbs on benami transactions in Union Budget 2018-19.
The IT Department is going through the ITRs filed by you and other citizens of India. It is also chasing Corporates to catch unexplained credit and there is a possibility of the Benami Act being invoked.
So what is Benami property and why is the Government chasing it? Let's find out. Want to know more on residential apartments and tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
In Hindi, Benami means nameless. Lets understand what is a Benami transaction. If a property is held by or transferred by person A and paid for by person B, this is a Benami transaction.
The property is held for the immediate or future benefit of person B. If you have bought a property and it is not in your name, this is Benami property.
If you have made cash deposits which you cannot explain, or you cannot explain sources of investments in your name, this is treated as Benami.
If you want to evade taxes, you invest black money and buy a benami property (property not held in your name). The real owner is difficult to trace as he/she is hidden behind a fake name/identity.
The person in whose name the property is purchased is called the Benamdar. Benami transactions include buying assets like movable, immovable, tangible or intangible.
Benami property is used to hide black money and evade taxes. This affects Government revenue generation and the growth and development of the country. The Government cannot implement development projects and schemes, as money is in short supply if citizens evade taxes.
Benami transactions raise property prices in major cities. The common man who badly needs a house will never be able to get an affordable house in the city.
The tax department is going through property records which are over Rs 30 Lakhs in value. The aim is to check for mismatches in transaction value with your tax profile. If the IT Department suspects a Benami transaction, then get ready for an enquiry under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act). It is in your interest that you don't get involved in any transaction which you cannot explain or doesn't match your tax profile. Be Wise, Get Rich.
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