The tax department of India has warned the people against carrying out Benami transactions. It has said that people who continue violating this would be liable for Rigorous Imprisonment (RI) of 7 years and these violators would also be liable to get charged under the normal existing IT act.
The advertisements by the Income Tax Department clearly said the following: “Do not enter into Benami Transactions as the Benami Property Transactions Act, 1988, is now in action from 1st November 2016.”
The Tax Department brought out the prominent features of the new act which very clearly state that the Benamidar, beneficiary and people who support and cause Benami transactions are prosecutable under the new act for upto 7 years of RI. Apart from this, they will also be liable to pay a fine up to 25% of the cost of the Benami property, going by its market value.
It also stated that even people who provide false and dishonest information would be prosecutable under this act. They might be imprisoned for up to 5 years along with being liable to pay a fine of 10% of the cost of the Benami, going by its market value.
The Benami property would be confiscated by the government and such transactions are punishable under other laws also, such as the Income Act, 1961.
Since the law came into effect last year, more than 230 cases have been registered under it. This also collided with the act of demonetization against black money, which came around the same time.
After demonetization, the IT department had strictly warned people against depositing their old and unexplained currency notes in other people’s bank accounts, by carrying out various public advertisements.
The IT department had very seriously executed operations to find out the bank accounts in which suspicious and high cash deposits had been done, post demonetization on 8th November when Rs.500/1000 notes were banned.