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Q. Benami Transactions Amendment Bill: Is recently brought amendments in Lok Sabha to Benami Transactions act 1998 will effectively prohibit benami transactions? Discuss.
Jul 29, 2016 Related to : GS paper-3 and 2

Ans :

Introduction-

To add teeth to the government’s crackdown on black money, Lok Sabha recently passed the Benami Transactions Amendment Bill. The amendments aim to strengthen the Bill in terms of legal and administrative procedure so as to overcome the practical difficulties which may arise in the implementation of its provisions when it becomes an Act.

Key changes brought-

  • The bill broadens the definition of benami transactions.
  • It seeks to establish adjudicating authorities and an Appellate Tribunal to deal with benami transactions.
  • It clearly specifies the penalties for entering into benami transactions.

Will it effectively prohibit benami transactions?

  • The definition of a benami transaction has been widened to include a transaction made in a fictitious name, now the bill has provisions to discourage such transactions.
  • The amendments establish adjudicating authorities and an Appellate Tribunal to deal with benami transactions. These authorities have required power to effectively discourage benami transactions.
  • Similarly Bill has made the penalty and prosecution provisions more stringent. It includes rigorous imprisonment of at least one year and up to seven years, and a fine which may extend to 25% of the benami property.
  • The amendments aim to strengthen the Bill in terms of legal and administrative procedure so as to overcome the practical difficulties which may arise in the implementation of its provisions when it becomes an Act.

Suggestions-

  • The law should be supported by larger institutional reform to reduce the artificial scarcity of urban land and stop off-the-book funding of political parties.
  • They should be mandated to show the source of income for their spending of political parties.

Conclusion-

Recent amendments to benami transactions act by Lok Sabha are welcome in the direction to unearth black money. It needs Rajya Sabha node now. Once it is cleared by Rajya Sabha, government should effectively implement this act. Similarly law should be supported by institutional reforms, hence government should bring comprehensive reforms to various institutions.


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