Benami transactions

Guest (Querist) 21 May 2012 This query is : Resolved
When is Benami Transaction is allowed and when it is not?A father buys a plot or a house in the name of his spouse, daughters, parents or brothers/sisters . Are all of them legal?

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Adv.R.P.Chugh (Expert) 21 May 2012
Yes, Buying a property in spouse's or unmarried daughter's name - is not benami for the reason that such properties are presumed to be brought for their benefit.

A transfer is benami only when a person gives funds - but buys in another's name the other being only a name lender, the property is sought to be kept for one's own benefit.
Since this is not the intention in buying property in aforesaid relatives names - it is not Benami.

(Read S.3 of the Benami Transactions Prohibition Act, 1988)

R.K Nanda (Expert) 21 May 2012
No more to add.

Guest (Querist) 21 May 2012
Is there a ceiling in terms of money that can be used for such purchases? Can they be called gifts to the kith and kins? Is there a n income tax benefit for such purchases? Now will those be considered as wealth of the family when Wealth Tax is calculated?

Shonee Kapoor (Expert) 22 May 2012
No ceiling.

Regards,

Shonee Kapoor
harassed.by.498a@gmail.com

Guest (Querist) 24 May 2012
Which community should then be held responsible if corruption flourishes in the name of such Benami transactions with no uper ceilings with no liabilities on the part of the executers- The political class who come and go in every five years,the judges who delivers judgements in favour of the executors of Benami Transactions or the legal luminaries who demand hefty fees from their clients for picking holes on the Benami Laws of the land ?

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