To encourage people to provide information related to benami properties and transactions, the government on June 1, 2018, announced the Benami information award. Under the reward scheme, informants/whistleblowers can also provide information related to the income earned on such properties by such hidden investors and beneficial owners.
According to the Benami Transactions Informants Reward Scheme, 2018, a person/informants can get reward up to Rs 1 crore for giving specific information in prescribed manner to the Joint or Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of Income Tax Department about benami transactions and properties as well as proceeds from such properties which are actionable under Benami Property Transactions Act, 1988, as amended by Benami Transactions (Prohibition) Amendment Act, 2016.
Foreigners will also be eligible for such reward. The identity of the persons giving information will not be disclosed and strict confidentiality shall be maintained.
It was found in many cases that black money was invested in properties in the names of others, even though benefits were enjoyed by the investor concealing his beneficial ownership in his tax returns. The Government had earlier amended Benami Property Transactions Act, 1988, by Benami Transactions (Prohibition) Amendment Act, 2016 to make the law stronger.
With the objective of obtaining people’s participation in the Income Tax Department’s efforts to unearth black money and to reduce tax evasion, a new reward scheme titled “Benami Transactions Informants Reward Scheme, 2018”, has been issued by the Income Tax Department. This reward scheme is aimed at encouraging people to give information about benami transactions and properties as well as income earned on such properties by such hidden investors and beneficial owners.
What is benami property?
Benami means unnamed, thus any property bought by any individual, not under his/her name is benami property or going by the literal meaning, benami is a property without any name.
It can include property held in the name of spouse or child for which the amount is paid out of known sources of income. A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income also falls under benami property. The transaction involved in the same is called benami transaction.
The benami transactions include buying assets of any kind — movable, immovable, tangible, intangible, any right or interest, or legal documents.