The Prohibition of Benami Property Transactions Act, 1988

1[(1) This Act may be called the Prohibition of BenamiProperty Transactions Act, 1988.] (2) It extends to the whole of India 2***. (3) The provisions of sections 3, 5 and 8 shall come into force at once, and the remaining provisionsof this Act shall be deemed to have come into force on the 19th day of May, 1988.

1[2. Definitions.-- In this Act, unless the context otherwise requires,-- (1) Adjudicating Authority means the Adjudicating Authority 2[referred to in] section 7; (2) Administrator means an Income-tax Officer as defined in clause (25) of section 2 of theIncome-tax Act, 1961 (43 of 1961); (3) Appellate Tribunal means the Appellate Tribunal established under section 30; (4) Approving Authority means an Additional Commissioner or a Joint Commissioner asdefined in clauses (1C) and (28C) respectively of section 2 of the Income-tax Act, 1961 (43 of 1961); (5) attachment means the prohibition of transfer, conversion, disposition or movement ofproperty, by an order issued under this Act; (6) authority means an authority referred to in sub-section (1) of section 18; (7) banking company means a company to which the provisions of the Banking RegulationAct, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51of that Act; (8) benami property means any property which is the subject matter of a benami transactionand also includes the proceeds from such property; (9) benami transaction means,-- (A) a transaction or an arrangement-- (a) where a property is transferred to, or is held by, a person, and the consideration forsuch property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of theperson who has provided the consideration, except when the property is held by-- (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property isheld for his benefit or benefit of other members in the family and the consideration for suchproperty has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whomhe stands in such capacity and includes a trustee, executor, partner, director of a company, adepository or a participant as an agent of a depository under the Depositories Act, 1996(22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child ofsuch individual and the consideration for such property has been provided or paid out of theknown sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, wherethe names of brother or sister or lineal ascendant or descendant and the individual appear as jointowners in any document, and the consideration for such property has been provided or paid out ofthe known sources of the individual; or (B) a transaction or an arrangement in respect of a property carried out or made in a fictitiousname; or (C) a transaction or an arrangement in respect of a property where the owner of the propertyis not aware of, or, denies knowledge of, such ownership; (D) a transaction or an arrangement in respect of a property where the person providing theconsideration is not traceable or is fictitious; Explanation.--For the removal of doubts, it is hereby declared that benami transaction shall notinclude any transaction involving the allowing of possession of any property to be taken or retained inpart performance of a contract referred to in section 53A of the Transfer of PropertyAct, 1882 (4 of 1882), if, under any law for the time being in force,-- (i) consideration for such property has been provided by the person to whom possession ofproperty has been allowed but the person who has granted possession thereof continues to holdownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered. (10) benamidar means a person or a fictitious person, as the case may be, in whose name thebenami property is transferred or held and includes a person who lends his name; (11) Bench means a Bench of the Adjudicating Authority or the Appellate Tribunal, as the casemay be; (12) beneficial owner means a person, whether his identity is known or not, for whose benefitthe benami property is held by a benamidar; (13) Board means the Central Board of Direct Taxes constituted under the Central Boards ofRevenue Act, 1963 (54 of 1963); (14) director shall have the same meaning as assigned to it in clause (34) of section 2 of theCompanies Act, 2013 (18 of 2013); (15) executor shall have the same meaning as assigned to it in clause (c) of section 2 of theIndian Succession Act, 1925 (39 of 1925); (16) fair market value, in relation to a property, means-- (i) the price that the property would ordinarily fetch on sale in the open market on the date ofthe transaction; and (ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may bedetermined in accordance with such manner as may be prescribed; (17) firm shall have the same meaning as assigned to it in section 4 of the Indian PartnershipAct, 1932 (9 of 1932) and shall include a limited liability partnership as defined in the LimitedLiability Partnership Act, 2008 (6 of 2009); (18) High Court means-- (i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides orcarries on business or personally works for gain; and (ii) where the Government is the aggrieved party, the High Court within the jurisdiction ofwhich the respondent, or in a case where there are more than one respondent, any of therespondents, ordinarily resides or carries on business or personally works for gain; (19) Initiating Officer means an Assistant Commissioner or a Deputy Commissioner as definedin clauses (9A) and (19A) respectively of section 2 of the Income-tax Act, 1961 (43 of 1961); (20) Member means the Chairperson or the Member of the Adjudicating Authority or theAppellate Tribunal, as the case may be; (21) notification means a notification published in the Official Gazette and the expression notified shall be construed accordingly; (22) partner shall have the same meaning as assigned to it in section 4 of the Indian PartnershipAct, 1932 (9 of 1932), and shall include,-- (a) any person who, being a minor, has been admitted to the benefits of partnership; and (b) a partner of a limited liability partnership formed and registered under the LimitedLiability Partnership Act, 2008 (6 of 2009); (23) partnership shall have the same meaning as assigned to it in section 4 of the IndianPartnership Act, 1932 (9 of 1932), and shall include a limited liability partnership formed andregistered under the Limited Liability Partnership Act, 2008 (6 of 2009); (24) person shall include-- (i) an individual; (ii) a Hindu undivided family; (iii) a company; (iv) a firm; (v) an association of persons or a body of individuals, whether incorporated or not; (vi) every artificial juridical person, not falling under sub-clauses (i) to (v); (25) prescribed means prescribed by rules made under this Act; (26) property means assets of any kind, whether movable or immovable, tangible or intangible,corporeal or incorporeal and includes any right or interest or legal documents or instrumentsevidencing title to or interest in the property and where the property is capable of conversion intosome other form, then the property in the converted form and also includes the proceeds from theproperty; (27) public financial institution shall have the same meaning as assigned to it in clause (72) ofsection 2 of the Companies Act, 2013 (18 of 2013); (28) Special Court means a Court of Session designated as Special Court under sub-section (1)of section 50; (29) transfer includes sale, purchase or any other form of transfer of right, title, possession orlien; (30) trustee means the trustee as defined in the section 3 of the Indian Trusts Act, 1882 (2 of1882); (31) words and expressions used herein and not defined in this Act but defined in the IndianTrusts Act, 1882 (2 of 1882), the Indian Succession Act, 1925 (39 of 1925), the Indian PartnershipAct, 1932 (9 of 1932), the Income-tax Act, 1961 (43 of 1961), the Depositories Act, 1996 (22 of 1996), the Prevention of Money-Laundering Act, 2002 (15 of 2003), the LimitedLiability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013), shall have thesame meanings respectively assigned to them in those Acts. ]

1[3. Prohibition of benami transactions.--(1) No person shall enter into any benami transaction. 2* * * * * 3[(2)] Whoever enters into any benami transaction shall be punishable with imprisonment for a termwhich may extend to three years or with fine or with both. 4[(3) Whoever enters into any benami transaction on and after the date of commencement of theBenami Transactions (Prohibition) Amendment Act, 2016 (43 of 2016) shall, notwithstanding anythingcontained in sub-section (2), be punishable in accordance with the provisions contained in Chapter VII.] 5* * * * *

(1) No suit, claim or action toenforce any right in respect of any property held benami against the person in whose name the property isheld or against any other person shall lie by or on behalf of a person claiming to be the real owner of suchproperty. (2) No defence based on any right in respect of any property held benami, whether against the personin whose name the property is held or against any other person, shall be allowed in any suit, claim oraction by or on behalf of a person claiming to be the real owner of such property. 1* * * * *

1[5. Property held benami liable to confiscation.--Any property, which is subject matter of benamitransaction, shall be liable to be confiscated by the Central Government.]