After demonetization, PM hints at stricter laws to Curb Benami property deals
May 18, 2017 Real Estate News
Already shocked to their core due to the surprising call by the government to ban old 500 and 1000 rupee notes, it seems there are more troubles in the offing for black money hoarders across the country. Reportedly, Narendra Modi led NDA government at the centre is planning to introduce stricter laws to curb the laundering of illegitimate money in real estate.
With the old higher denomination notes banned suddenly last month, people sitting on piles of illicit cash were busy finding ways to turn their black money into white. As a result, Became property transactions were on a rise as people bought properties using their illicit cash in someone else’s names. However, realising the huge loss that the government will face as a result of Benami transactions, the union government now plans to bring all such people to books aimed at halting the apparent corruption in real estate. In his recent address to the Indian citizens, PM Narendra Modi indicated the introduction of tighter rules to clean up the country’s real estate sector.
Sources suggest that the Income tax department has been ordered to keep a vigil eye on real estate assets with suspicious titles. I-T officials are keen to use the returns filed this fiscal as well as bank transactions as the reference data to scrutinize benami property assets.
The country’s realty sector, already dubbed as the cakewalk for black money launderers, had been witnessing a steady increase in the dubious property deals for several years now. With no proper regulations in place to buy property as well as the absence of a mechanism to detect false title deeds, people found it relatively easy to launder their illicit funds in real estate. A benami property is the one which shields the identity of the true owner of the property. Experts suggest politicians, NRIs, businessmen often make use of their unaccounted money by buying lands, apartments in the name of their relatives or trusted acquaintances. The noticeable rise in benami real estate deals has made the government think on the issue and as a result came stricter amendments to the existing Benami Transactions Act.
Although there is no official data that indicates the menace of benami property deals, market experts believe around 10 percent of all real estate deals are processed with the blessings of black money.
As per the Prohibition of Benami Property Transactions Act, that came into effect last month, any person indulging in benami property deal is liable to face legal action followed by a jail term of up to seven years. However, analysts hope a strong and willful execution of the said law by the government to bring guilty to the books.
With the old higher denomination notes banned suddenly last month, people sitting on piles of illicit cash were busy finding ways to turn their black money into white. As a result, Became property transactions were on a rise as people bought properties using their illicit cash in someone else’s names. However, realising the huge loss that the government will face as a result of Benami transactions, the union government now plans to bring all such people to books aimed at halting the apparent corruption in real estate. In his recent address to the Indian citizens, PM Narendra Modi indicated the introduction of tighter rules to clean up the country’s real estate sector.
Sources suggest that the Income tax department has been ordered to keep a vigil eye on real estate assets with suspicious titles. I-T officials are keen to use the returns filed this fiscal as well as bank transactions as the reference data to scrutinize benami property assets.
The country’s realty sector, already dubbed as the cakewalk for black money launderers, had been witnessing a steady increase in the dubious property deals for several years now. With no proper regulations in place to buy property as well as the absence of a mechanism to detect false title deeds, people found it relatively easy to launder their illicit funds in real estate. A benami property is the one which shields the identity of the true owner of the property. Experts suggest politicians, NRIs, businessmen often make use of their unaccounted money by buying lands, apartments in the name of their relatives or trusted acquaintances. The noticeable rise in benami real estate deals has made the government think on the issue and as a result came stricter amendments to the existing Benami Transactions Act.
Although there is no official data that indicates the menace of benami property deals, market experts believe around 10 percent of all real estate deals are processed with the blessings of black money.
As per the Prohibition of Benami Property Transactions Act, that came into effect last month, any person indulging in benami property deal is liable to face legal action followed by a jail term of up to seven years. However, analysts hope a strong and willful execution of the said law by the government to bring guilty to the books.
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