New Delhi: The new law to prohibit benami transactions, which also provides for up to 7 years imprisonment and fine for those indulging in such activities, will come into effect from November 1. With a view to curb the menace of black money, Parliament in August had passed the Benami Transactions (Prohibition) Act, after assurance from finance minister Arun Jaitley that genuine religious trusts will be kept out of the purview of the legislation. “The rules and all the provisions of the Benami Transactions (Prohibition) Act shall come into force on November 1, 2016. After coming into effect, the existing Benami Transactions (Prohibition) Act, 1988, shall be renamed as the Prohibition of Benami Property Transactions Act, 1988,” a CBDT statement said.
While the existing law provides for up to three years of imprisonment or fine or both for carrying out benami transactions, the amended legislation would provide for seven years imprisonment and fine. The Act defines benami transactions, prohibits them and further provides that any violation is punishable with imprisonment and fine. The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner.
