When we talk about 'benami property', it means a property that is not in the name of a real owner, but in the name of someone else. That is, the real buyer or owner is hidden and the name written in the documents is only for appearance. Buying or keeping such property means that the real owner is hiding himself. This work is often done to save tax, hide property or break government rules.
The benami property market is quite complex and risky. Such transactions are illegal in India and strict laws remain for this. If any property is found benami, then not only his property can be confiscated but he can also be in jail. The Government of India has taken this matter seriously and has made the law more strict in 2016 against benami property. Now keeping benami property can also cause jail and heavy fines of up to seven years.
Therefore, buying benami property is not just a paper process, but a threat to affect your whole life. Your property can be taken away, your image can be spoiled and mental stress can also occur.
Often people buy benami property to avoid tax or law limits. For example, a rich person gets his property recorded in the name of one of his domestic employees or acquaintances so that his real property is hidden. That is, someone else gives money, there is another name on paper. But this method is a crime for law.
In 1988, India was first made a law to stop benami property, but it was not as effective. It was further strengthened in 2016. Under this law, the government has the right to confiscate benami property and send the guilty to jail. Also, if any property proves to be benami, the court does not listen to its ownership. Nevertheless, the law has also been given some exemption, such as property or inherited property purchased in the name of spouse or children is not considered benami. As long as their papers are correct and clear.
