Simply understand what is Benami Act.

What is mean by Benami Transaction?

Transaction is deemed to be as Benami if the identity of the beneficial real owner is concealed by showing other person (Benamidar) as a real owner on record. Now such 'Benamidar' can be classified into four types-


1. Where property is transferred to or held by benamidar and consideration for such property is paid by the beneficial owner of that property.


2. Where transaction is made in fictitious name.


3. Where owner is not aware of or denies knowledge of, ownership of property.


4. Where beneficial owner is fictitious or untraceable.

What is Benami Transaction?

Many people have a confusion regarding these type of transactions as they are not aware about which transactions will be included herein and which transactions will be excluded. We can categories those four types of transactions which are not Benami Transactions'.


1. Where an individual hold property in the name of his/her child or spouse. If the consideration for the same is paid out of known sources of income of such individual.


2. Where property is held by individual in joint name with siblings, parents , grand-parents, grand-children. If consideration for the same is paid out of known sources of income.


3. Where property is held by Karta or members of HUF (Hindu Undivided Family) for the benefit of members of HUF. If payment of consideration is paid out of known sources of income of Karta or members of such HUF.


4. Property held by a person in a fiduciary capacity like director in company or trustee of trust on behalf of other person.

What is benemi property?

'Benami Property' covers immovable property, movable property (eg. Cash, jewellery, bank FD's etc.),tangible property, intangible property in India. However properties outside India are also covered in benami properties if these are not covered under Black money Act.

What are the consequences of Benami transactions?

Person who is guilty under this law has following consequences :

* Imprisonment for a minimum period of one year and maximum period of Seven years.

* And Fine of upto 25% amount of market value of such Benami Property.

* Central government may also confiscate such Benami Property.

* Benamidar may also be prohibited from retransferring such property to beneficial owner.

Interlinking of Benami transaction and Jan Dhan Accounts

As we are aware that after the demonetization decision by the government with the help of Central bank of India (RBI) sudden surge of cash deposits witnessed in Jan Dhan Accounts. If in investigation it is revealed that said money belongs to someone else then such money will be confiscated and both the Jan Dhan Account holder and beneficial owner of such money will be liable for prosecution under this Act.