Currently, the public uses various means to evade property tax. To control this, the Federal Board of Revenue enacted the Benami Transaction Law to address the drastic tax evasion in the country. Due to this implementation, Pakistan’s financial system has significantly improved as credibility and accountability have increased.
What is the Benami transaction property? Well, it is pretty simple: The individual gets ownership of the property that is paid for by another person. In layman’s terms, Benami property payment is considered property brought under a false name. However, the real owner has no idea about such possessions or denies knowledge of them.
Benami Transaction
According to the law, a Benami transaction takes place when a property is transferred to or by a person, but another person pays off the considerations. Hence, the holder of such property is referred to as the Benamidar, and the property is termed the Benami property. The trustees of the actual owner, including people like wives, children, sisters, and brothers, are excluded from the known resource to whom the property has been transferred.
This type of Benami transaction for property complicates the situation as the ownership is not identified, so the legality of the property is not decided. Hence, this Benami transaction makes identifying the property’s ownership trickier.
Benami Property
Benami transaction that leads to ownership of different properties to the individuals once the transaction takes place. Other types of Benami properties could be categorized as being transferred through the Benami transaction.
The Benami act defined by the Federal Board of Revenue the included properties as such as shopping plazas, apartments, plot files, and any housing schemes. Apart from these the real estate properties others like vehicles, businesses, bank accounts, jewelry, foreign currency, and legal documents fall under the Benami transaction.
Benami Meaning
As per the realistic meaning of the Benami Transaction Act in the Federal Board of Revenue, “Benami Transaction Rules, 2019, are already enforced with immediate effect, and BTB zones of Inland Revenue Services are assigned duties to establish cases against Benami properties. The challan is submitted to the Adjudication Authority within 120 days.
Also, during the approval and submission of property purchases, property transfers are banned until further orders. Even though the Benami property holder has the authority to appeal against the decision of the Adjudication Authority, if the person with a Benami transaction property is proven guilty, his property is confiscated and auctioned out by the Federal Government.
The legal punishments for the Benami transaction depend on rigorous guiltiness. At least one to seven years’ imprisonment is given. If the informer gave the Benami transaction holders the wrong information, they would be charged with six months to five years’ imprisonment.
If the news is certain and credible, the Benami transaction holder’s whistleblower is gifted with a cash prize. It is equivalent to 5% of the property price, which is PKR 20 Lakhs, or maybe within PKR 50 Lakhs.
Benami Property Transaction Act
Benami is the Hindi word “Without Name” in English. The Benami property is titled to these following items.
- Tangible or Intangible.
- Moveable or Immovable.
- Corporeal or Incorporeal.
- Legal documents, Rights, and Interests.
- Property that is capable of being transferred into other forms.
How can a property be figured out as a Benami property? Some of the factors that courts consider for the property to be highly weighted under Benami transaction property.
- Benami property includes the party that receives the title deeds after the sale.
- How property is conducted after the sale and is used.
- The relationship between the claimant and the Benamidar.
- The possession and nature of the property.
- The source from which money is purchased.
The re-transfer of the Benami property by the Benamidar is considered null and void. Such property transfers are regarded as having yet to take place.
