RERA (Real Estate Regulatory Act) is perhaps the greatest change in the real estate market in India. There is another which is not tremendously discussed yet but is applicable to all the real estate Benami Transactions in India, and one and all have to take notice of that whether an Indian resident or an NRI (non-resident Indian). Wondering what are we discussing?
This is the Benami Transactions (Prohibition) Amendment Act, 2016. This Act became effective from November 2016. As the term implies, it prohibits Benami transactions in the real estate market.
Considering the capital-intensive nature of land and property transactions, it is assumed that an extensive number of transactions are undertaken without declaring ownership. Usually, people who do not reveal their full income on government records, go for such property transactions as it assists them to hide the source of income.
The Benami Transactions (Prohibition) Act, 1988
This act has been on the statute book for over 28 years, though it could not be implemented due to several anomalies. But, this Act is now fully enacted.
- The law has granted the authorities to attach properties for which the property owner is unknown. Such Benami properties can also be confiscated ultimately.
- There are strict penal provisions in a situation anyone is found associated with Benami Transactions in India.
- Once confirmed, an offender can be held for rigorous imprisonment of up to 7 years. The minimum period of imprisonment has been determined for one year.
- Furthermore, the guilty shall also be liable to pay a heavy penalty which may extend up to 25 percent of the complete fair market value of the benami property in question.
- According to an official statement issued by the Ministry of Finance, property worth more than Rs 200 crore has gone under the scanner of the Act, from November 2016 to March 2017.
- More than 140 cases have come into light and properties for 124 cases have just been attached. Even the bank accounts that were used as a part of benami transactions have been connected to the government.
- With such reformatory framework implemented in the country, the Indian real estate market is on a fast-track to becoming an organized market.
- NRI property buyers can expect clean agreements in such an organized market and steer clear of any fishy transactions that may prompt regretful situations at a later stage.