{"id":44763,"date":"2021-12-21T11:37:35","date_gmt":"2021-12-21T06:07:35","guid":{"rendered":"https:\/\/www.squareyards.com\/blog\/?p=44763"},"modified":"2025-08-07T13:32:25","modified_gmt":"2025-08-07T08:02:25","slug":"benami-property-transaction-act-gly","status":"publish","type":"post","link":"https:\/\/www.squareyards.com\/blog\/benami-property-transaction-act-gly","title":{"rendered":"What is Benami Property Transaction Act ? Meaning &#038; Key Provisions"},"content":{"rendered":"\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">In Hindi, the term \u2018Benami\u2019 refers to something that does not have a name associated with it. Thus, a property purchased by an individual that is not in his\/her name is referred to as Benami property. This is inclusive of properties purchased in the name of children or spouses for which the payment has been done through a known source of income.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">Moreover, joint property is purchased in the name of a brother, sister, or any other relative, and the payment is done through a familiar source<\/span> <span style=\"font-weight: 400;\">of income, and that too is termed as Benami property. In addition,<\/span> <span style=\"font-weight: 400;\">the transaction associated with it is known as the Benami transaction.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">In lieu of escaping taxation, people put their black money into buying Benami property,<\/span><span style=\"font-weight: 400;\">\u00a0 \u00a0 <\/span><span style=\"font-weight: 400;\">and it becomes intimidating to trace the real owners of the property because of the fake registration names and IDs. The person, in whose name the property is purchased is called Benamdar. Benami transactions are inclusive of any asset purchase like movable, immovable, tangible, legal documents, or any interest or right.<\/span><\/p>\r\n\r\n\r\n\r\n<div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\">\r\n<h2>Table of contents<\/h2>\r\n<ul>\r\n<li>Benami Transaction Act<\/li>\r\n<li>Benami Transaction Act 1988<\/li>\r\n<li>Benami Transaction Act 2016<\/li>\r\n<li>Key Features of the Benami Transaction Prohibition Act<\/li>\r\n<li>Why is the Benami Property Act Considered to be Illegal?<\/li>\r\n<li>Penalties under the Benami Property Act<\/li>\r\n<li>Important Real estate Terms You Should Know<\/li>\r\n<li>Frequently Asked Questions<\/li>\r\n<\/ul>\r\n<\/div>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-benami-transaction-act\">Benami Transaction Act<\/h2>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">The first law associated with Benami transactions was presented in the Benami Transactions Act,1988, however, it only included eight<\/span> <span style=\"font-weight: 400;\">sections. Later, this was amended as the Benami Transactions Amendment Act, 2016 which comprised 72 sections.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-benami-transaction-act-1988\">Benami Transaction Act 1988<\/h2>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">The Benami Transactions Act of 1988 was presented by the Parliament of India to keep a check on certain financial transactions. In this Act, any Benami transaction is considered as a purchase of property in someone else\u2019s<\/span> <span style=\"font-weight: 400;\">name for which the consideration has been paid by another person.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-benami-transaction-act-2016\">Benami Transaction Act 2016<\/h2>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">Under section 2(9) of the Act, a Benami Transaction is one in which:<\/span><\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Property is bought in the name of one person<\/span><span style=\"font-weight: 400;\">\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Property is under a fake name<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The owner of any such property is in denial of any information about the transaction<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The person who paid for the property is untraceable<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-key-features-of-the-benami-transaction-prohibition-act\">Key Features of the Benami Transaction Prohibition Act<\/h2>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Act is about a Benami transaction and Benami property, which excludes the transactions that are not legit.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><span style=\"font-weight: 400;\">It defines the strategy for determining such transactions and the penalties associated with the transaction.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Under this Act, the powers of a civil court will be available for the concerned authorities.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Multiple services have been listed for protecting the action which is taken in good faith or for services of notice.<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With this Act, the government has the power to consult the chief justice of the High Court, for appointing one or more special courts from the Sessions Court for the Bill.<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-why-is-the-benami-property-act-considered-to-be-illegal\">Why is the Benami Property Act Considered to be Illegal?<\/h2>\r\n\r\n\r\n\r\n<p class=\"has-text-align-justify\"><span style=\"font-weight: 400;\">In India, Benami transactions have been taking place because of many unwanted reasons like tax evasion, money laundering, etc. Also, it was found that these transactions were used for transferring the property to someone else\u2019s name, which defeats the lawful claims of the creditors by defrauding them. Thus, there were losses and multiple occurrences of frauds because of the Benami transaction. With this context, the government decided to forbid these transactions in the country.<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-penalties-under-the-benami-property-act\">Penalties under the Benami Property Act<\/h2>\r\n\r\n\r\n\r\n<ul>\r\n<li><span style=\"font-weight: 400;\"><strong>The Benami property can get confiscated<\/strong><\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li><span style=\"font-weight: 400;\">Prison sentence for 1 to 7 years<\/span><\/li>\r\n<li><span style=\"font-weight: 400;\">Fine<\/span> <span style=\"font-weight: 400;\">upto 25% of the overall market value of the property<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If a person who is responsible for providing the necessary information fails to do so, he\/she is punishable with:<\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<ul>\r\n<li><span style=\"font-weight: 400;\"><strong>Prison sentence for 6 months to 5 years<\/strong><\/span><\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p><span style=\"font-weight: 400;\">Fine<\/span> <span style=\"font-weight: 400;\">upto 10% of the overall market value of the property<\/span><\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-important-real-estate-terms-you-should-know\">Important Real estate Terms You Should Know<\/h2>\r\n\r\n\r\n\r\n<figure class=\"wp-block-table\">\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>Balloon Payment<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-balloon-payment-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Balloon Payment<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Bare Shell and Warm Shell<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/bare-shell-and-warm-shell-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Bare Shell and Warm Shell<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Capital Gains Tax<\/td>\r\n<td><a class=\"ek-link\" href=\"https:\/\/www.squareyards.com\/blog\/capital-gains-tax-ptax\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Capital Gains Tax<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Common Areas in Apartments<\/td>\r\n<td><a class=\"ek-link\" href=\"https:\/\/www.squareyards.com\/blog\/common-area-in-buildings-apartments-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Common Areas in Apartments<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Commencement Certificate<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/what-is-commencement-certificate-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Commencement Certificate<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Carpet Area<\/td>\r\n<td><a class=\"ek-link\" href=\"https:\/\/www.squareyards.com\/blog\/carpet-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Carpet Area<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Brownfield Project<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/brownfield-projects-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What are Brownfield Project<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>built-up-area<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/built-up-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is built-up-area<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Debt to Income Ratio<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/debt-to-income-ratio-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Debt to Income Ratio<\/a><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Super Built-up Area<\/td>\r\n<td><a href=\"https:\/\/www.squareyards.com\/blog\/super-built-up-area-gly\" target=\"_blank\" rel=\"noreferrer noopener\">What is Super Built-up Area<\/a><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/figure>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions\">Frequently Asked Questions<\/h2>\r\n\r\n\r\n\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>How to avoid Benami transactions?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>You can avoid a Benami transaction by not purchasing a property in someone else\u2019s name.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>How to report Benami property?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>You can visit the website\u00a0<strong>https:\/\/www.incometaxindiaefiling.gov.in<a class=\"ek-link\" href=\"https:\/\/www.incometaxindiaefiling.gov.in\/\">\/<\/a><\/strong>\u00a0 and report the Benami transaction.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>What was Benami purchasing?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Benami purchase is one in which a particular thing is purchased in one\u2019s name and paid by another\u00a0.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>How do you prove property in Benami?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>It can be proved that a property is Benami, if:<\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li>Property is under a fake name<\/li>\r\n<li>The owner of any such property is in denial of any information about the transaction<\/li>\r\n<\/ul>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Who is a Benamidar?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Benamidar is a person in whose name the property has been purchased but is not paid by him\/her.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Who is the initiating officer in the Benami transaction?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>The Assistant Commissioner or Deputy Commissioner are the initiating officers. \u00a0 \u00a0<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>Can a husband claim a property brought in his wife&#039;s name?\n<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Yes, but the fund source from which the property has been purchased should be legit.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section\t\tclass=\"sc_fs_faq sc_card    \"\n\t\t\t\t>\n\t\t\t\t<h2>What is the difference between ostensible owner and Benami transaction?<\/h2>\t\t\t\t<div>\n\t\t\t\t\t\t<div class=\"sc_fs_faq__content\">\n\t\t\t\t\r\n\r\n\r\n<p>Ostensible ownership is of a person who is not the real owner but has the intention of owning the property, which is not in the case of Benami ownership.<\/p>\r\n\t\t\t<\/div>\n\t\t<\/div>\n\t\t<\/section>\n\t\t\n<script type=\"application\/ld+json\">\n\t{\n\t\t\"@context\": \"https:\/\/schema.org\",\n\t\t\"@type\": \"FAQPage\",\n\t\t\"mainEntity\": [\n\t\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How to avoid Benami transactions?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>You can avoid a Benami transaction by not purchasing a property in someone else\u2019s name.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How to report Benami property?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>You can visit the website\u00a0<strong>https:\/\/www.incometaxindiaefiling.gov.in<a class='ek-link' href='https:\/\/www.incometaxindiaefiling.gov.in\/'>\/<\/a><\/strong>\u00a0 and report the Benami transaction.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What was Benami purchasing?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Benami purchase is one in which a particular thing is purchased in one\u2019s name and paid by another\u00a0.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"How do you prove property in Benami?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>It can be proved that a property is Benami, if:<\/p>\r\n\r\n\r\n\r\n<ul>\r\n<li>Property is under a fake name<\/li>\r\n<li>The owner of any such property is in denial of any information about the transaction<\/li>\r\n<\/ul>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Who is a Benamidar?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Benamidar is a person in whose name the property has been purchased but is not paid by him\/her.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Who is the initiating officer in the Benami transaction?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>The Assistant Commissioner or Deputy Commissioner are the initiating officers. \u00a0 \u00a0<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"Can a husband claim a property brought in his wife's name?\n\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Yes, but the fund source from which the property has been purchased should be legit.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t,\t\t\t\t{\n\t\t\t\t\"@type\": \"Question\",\n\t\t\t\t\"name\": \"What is the difference between ostensible owner and Benami transaction?\",\n\t\t\t\t\"acceptedAnswer\": {\n\t\t\t\t\t\"@type\": \"Answer\",\n\t\t\t\t\t\"text\": \"\r\n\r\n\r\n<p>Ostensible ownership is of a person who is not the real owner but has the intention of owning the property, which is not in the case of Benami ownership.<\/p>\r\n\"\n\t\t\t\t\t\t\t\t\t}\n\t\t\t}\n\t\t\t\t\t\t]\n\t}\n<\/script>\n","protected":false},"excerpt":{"rendered":"<p>In Hindi, the term \u2018Benami\u2019 refers to something that does not have a name associated with it. Thus, a property purchased by an individual that is not in his\/her name is referred to as Benami property. This is inclusive of properties purchased in the name of children or spouses for which the payment has been [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":45997,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[216],"acf":[],"_links":{"self":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44763"}],"collection":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/comments?post=44763"}],"version-history":[{"count":9,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44763\/revisions"}],"predecessor-version":[{"id":1082530,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/posts\/44763\/revisions\/1082530"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media\/45997"}],"wp:attachment":[{"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/media?parent=44763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.squareyards.com\/blog\/wp-json\/wp\/v2\/categories?post=44763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}