Shradha Goyal

The introduction of Benami Transaction Prohibition Bill to tackle black money transactions in real estate is being touted to be a positive move from Finance Minister Arun Jaitley. While the Union Budget 2015-16 did not come up with reforms that would directly impact the real estate market and the falling customer sentiments, the move to introduce Benami Transaction Prohibition Bill is expected to give some impetus to the sector. The Bill would largely aid in reducing corruption, which currently, is a major issue that the real estate industry is grappling with.

The realty sector’s crying demand for an ‘Industry Status’ which would bring the much needed transparency in the sector was ignored yet again. However, Sachin Sandhir, Global Managing Director – Emerging Business & MD – South Asia, RICS says, “Benami Transaction prohibition Bill will come down heavily on black money transactions in the Indian real estate.” Presently, this is seen as a major takeaway for the customers from the Budget 2015, which otherwise lacked hard-hitting reforms for homebuyers.

Reiterating, P Sahel, Vice Chairman, Lotus Greens says, “The declaration to introduce ‘Benami’ Property Transaction Bill could create a more professional environment in the sector by introducing transparency.”

Giving further clarity on how the Bill would impact the realty sector, Mahesh Jaising, Partner, BMR & Associates LLP adds that as per this new Bill which has been proposed to be tables, the Government will have the power to confiscate ‘Benami’ property and prosecute persons involved in Benami transactions.

What is Benami Property?

Benami Property, ideally means a property purchased in someone else’s name. The practice is mostly undertaken by people to avoid tax implications of owning multiple properties. As per India Property Lawyers, ‘The person putting in the money in a Benami Transaction, is actually the one controlling the ownership and/or the transaction of the property. This arrangement is illegal as per Indian Law.