In an effort to unearth black money and reduce tax evasion, the Prime Minister Narendra Modi-led government is planning a major crackdown on owners of Benami properties. In a first, the government is going to reward informers who will share details of such properties and transactions with the income tax sleuths.
Under the Benami Transactions Informants Reward Scheme 2018, a person can be rewarded up to Rs 1 crore for giving specific details to the Joint/Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of Income Tax Department.
If the Benami property is provisionally attached, the informant will be eligible for an interim reward. The informer will get final reward only when the Benami property has been fully confiscated. The confiscation shall be deemed to be final if two years have passed from the date of confiscation and there is no litigation pending.
Interim reward will not be more than 1 per cent of the total value of the attached benami asset. The government has set Rs 10 lakh as maximum amount for such rewards. Similarly, the final reward will be up to 5 per cent of the value of such assets. However, maximum amount of total reward (interim and final) in respect of a single benami property shall be limited to Rs 1 crore only.
Under the scheme, the interim reward will be handed out within 4 months of actual provisional attachment of the benami property whereas the final reward will be given within 6 months of order of confiscation of the Benami property.
The information could be about the Benami transactions and properties as well as proceeds from such properties which are actionable under Benami Transactions (Prohibition) Amendment Act, 2016. The government had in 2016 amended the Benami Act to make the law stronger.
Under the Act, any property acquired by a person in the name of a benamidar (other than his close family members or in fiduciary capacity), is liable to be attached and subsequently confiscated and all persons involved in such Benami transactions are liable to be prosecuted which carries rigorous imprisonment for term up to seven years.
In a notification on Friday, the Finance Ministry said that in many cases the 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.
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, the notification said
Foreigners will also be eligible for such reward. Identity of the persons giving information will not be disclosed and strict confidentiality shall be maintained, it added.
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