What is the latest Benami Act?

The latest applicable law is the Prohibition of Benami Property Transactions Act (PBPT), 1988, as amended by the 2016 Amendment, which remains the operative and updated legal framework.

What is meant by benami?

"Benami" means a transaction where a property is purchased in someone else’s name while the real financial beneficiary remains hidden. It is used to conceal identity, evade taxes, or hold illegal assets.

What is the Benami Act Amendment 2016?

The Benami Transactions (Prohibition) Amendment Act, 2016 strengthened the original 1988 Act by widening the definition of benami transactions and introducing strict penalties, including confiscation of property. It also created authorities for investigation and adjudication.

What is the Benami Act 2017?

The Benami Act 2017 refers to the fully enforced and operational version of the amended Benami law from 2016, implemented from 1 November 2016 and active through 2017, enabling action against benami properties nationwide.

Who is the owner of benami property?

Legally, the real owner is the person who provides the money for the purchase, not the person in whose name the property is registered. The benamidar only holds the property in name, without real ownership rights.

How to file benami property?

To report a benami property, individuals can submit information to the Initiating Officer (Income Tax Department), either through written communication, online reporting channels, or helplines set up by the department.

What is Section 3 of the Benami Act?

Section 3 prohibits entering into benami transactions and makes violation a punishable offence. It also outlines specific exceptions such as property held in the name of spouse or children where the consideration is traceable.

How to prove benami property?

Benami can be proven by showing who paid for the property, the intention behind the purchase, possession patterns, and financial trails. Evidence must demonstrate the real owner’s hidden benefit.

What is Section 47 of the Benami Transaction Act?

Section 47 allows any person aggrieved by the decision of the Adjudicating Authority to appeal to the Appellate Tribunal within the prescribed time.

How do you appeal under the Benami Act?

An appeal is filed before the Appellate Tribunal by submitting the prescribed form, grounds of appeal, and supporting documents within the statutory period (typically 45 days from the order).

What is the citizenship amendment act 2019 and 2024?

CAA 2019 provides fast-track Indian citizenship to non-Muslim persecuted minorities from Pakistan, Afghanistan, and Bangladesh. In 2024, the government notified the rules, enabling its actual implementation.

What is Section 3 of the Benami Act?

Section 3 prohibits entering into benami transactions and makes violation a punishable offence. It also outlines specific exceptions such as property held in the name of spouse or children where the consideration is traceable.

What is Section 47 of the Benami Transaction Act?

Section 47 allows any person aggrieved by the decision of the Adjudicating Authority to appeal to the Appellate Tribunal within the prescribed time.

How do you appeal under the Benami Act?

An appeal is filed before the Appellate Tribunal by submitting the prescribed form, grounds of appeal, and supporting documents within the statutory period (typically 45 days from the order).

What is the citizenship amendment act 2019 and 2024?

CAA 2019 provides fast-track Indian citizenship to non-Muslim persecuted minorities from Pakistan, Afghanistan, and Bangladesh. In 2024, the government notified the rules, enabling its actual implementation.

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Budget 2024: Changes In Benami Act

Pragya Pathak

Author

Updated: 10-12-2025 at 5:30 PM

One of the persistent problems in the Indian legal system is the issue of benami transactions, where an individual purchases a property in someone else’s name for illicit activities, such as money laundering. To minimise this criminal activity, the government of India issued an act called the Prohibition of Benami Transactions Act, 1988. The sole aim of the act was to legally define Benami transactions; however, the act still had quite a lot of loopholes.

To address the loopholes, the Indian government introduced some changes in the act and issued the Benami Transaction Amendment Act, 2016. The new act comprises updated definitions, detailed procedures for prosecution and penalties, and other such changes to effectively reduce the instances of illicit property transfers.

Read the article to learn more about the amended act, including information on its various sub-sections, like Section 3(2) of Benami Transaction Act or Section 2(9) of Benami Act, and answers to popular questions like, ‘How to identify Benami property?’.

Overview

The table below summarises some key details about the Benami Property Act that one should know.

Name of the act	Benami Transactions Act
Originally drafted in	1988
Amended act	Benami Transaction Amendment Act, 2016
Objective	To reduce and eventually eradicate the instances of money laundering, prevent benami land holdings, and ensure transparency in property ownership

What Are Benami Transactions?

Benami transactions have always confused legal systems and the government, especially in India. To entirely abolish Benami transactions, the government of India introduced the Prohibition of Benami Transactions Act, 1988, commonly known as the Benami Act.

Benami transactions are defined under Section 2(a) of the Benami Transaction Act, 1988. In these types of transactions, a property is purchased in the name of a person who is not the person paying for the property. Let us understand this with the help of an illustration.

Illustration: A finds a property situated in Delhi and wishes to purchase it. A pays Rs. 5 lakhs for that property; however, he purchases it in the name of his wife, B. This is a benami transaction since A paid for the property, but the property was in the name of B.

Background Of the Benami Transaction Act, 1988

The Benami Transaction Act, 1988, has its roots in ancient India. The literal meaning of the Urdu word ‘Benami’ is ‘no name’, which translates to someone who pays for another person’s property to own the property indirectly. The traces of Benami can be traced back to British rule in India, where they used to procure lands with the help of Benami transactions.

The Benami transactions were first legalised in 1778 in the Gopeekrist Gosain vs. Gungapersuad Gosain case, where the judge concluded that Benami transactions were an old practice in India and would continue to happen unless otherwise stated in the law. This legislation was one of the major disadvantages back then.

However, with the passing of time and the evolution of human minds and judgments, Benami transactions were prohibited with the introduction of the Benami Transaction Act in 1988.

Also Read: Unlocking Rural Prosperity With The SVAMITVA Scheme

What Are The Changes Introduced By The Union Budget 2024?

The various time limits for replying to Notices issued to a ‘benamdar’ or someone who has allegedly been involved in a benami transaction are given under Section 24. The Finance Minister of India, Nirmala Sitharaman, in her budget presentation, proposed changes to Section 24 of this Act.

Let us have a look at what the latest judgments on Benami Transaction Act!

Benami Property

Section 24 (1) of the Benami Act says that, if an initiating officer has enough reasons to believe that a person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show within the time limit to prove why such property should not be treated as a benami property.

Punishment Under The Benami Act

Section 24(2) of the Benami Transaction Amendment Act says that a copy of such notice should also be sent to the beneficiary owner along with the benamidar, if the beneficiary’s identity is known. A new Section 2A is being inserted in the Act to propose a time limit not exceeding 3 months for filing a reply to the notice.

An initiating officer may provide less time to furnish a notice and may provide an extension in case of a delay; however, such an extension shall never cross 3 months. Previously, no such limit existed, which caused a long pendency of benami cases.

As per Section 24(3) of the Benami Act, initiating officers may provisionally attach the property with the previous approval of the approving authority in a manner as prescribed. This may be done if the officer thinks that the property held benami may be alienated during the period specified in the notice. The property may be provisionally attached, within a period not exceeding ninety days from the last day of the month where the notice was issued.

Extended Time

Union Budget 2024 proposes to extend the time limit of ninety days to four months. Section 24(4) of the Benami Transaction Amendment Act says that if a provisional attachment of property was made under section 24(3), the initiating officer shall pass an order either continuing or revoking the provisional attachment within a period not exceeding ninety days. The new budget proposes to extend this time limit to four months.

Section 24(5) of the Benami Act provides that, if the initiating officer passes an order continuing the provisional attachment, he shall draw up a statement of the case and refer it to the adjudicating authority within fifteen days from the date of attachment. To facilitate working, the Budget 2024 seeks to extend it to 1 month.

Difference Between Benami Transaction Act, 1988 & 2016?

The difference between the Benami Transaction Act, 1988, and the Benami Transaction Act 2016, is mentioned below in tabular format:

Component	Benami Transaction Act, 1988	Benami Transaction Act 2016
Definitions	Definitions with ambiguities	Clear and structured definitions using easy words
Administrative staff	No special authorities	Hired special officers, like Initiating Officer, Approving Authority, Adjudicating Authority, and others.
Penalties	Less	Hefty fines up to 25% of the property’s market value, along with imprisonment of up to 7 years
Enforceable	Weak enforceability	Strong enforceability as the framework is structured and clear

Conclusion

These time extensions in the Benami Act will help both the government officers dealing with this and the people who are supposed to file replies. The updated Benami Transaction Act 2016 would prove itself to be essential in preventing criminal activities like illicit property-related transactions, money laundering, etc. The amendment also reflects and represents the Indian government’s commitment toward keeping an accountable and transparent environment, especially in the real estate sector.

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