This transaction has implications under Income Tax and FEMA.
As regards FEM (Borrowing and Lending in Rupees) Regulations 2000 there are certain conditions on which NRI can give loan to relative in India - for example, tenure of loan cannot exceed 3 years, rate of interest cannot exceed 2% over bank rate and the money can be repaid into a NRO account only, and it becomes non repatriable out of India.
I request you to draw up a loan agreement in alignment of above, to comply with FEMA. Your parents need to return back the loan to you within 3 years from its issue, to comply with FEMA.
As regards Income Tax Act, if it is a loan, if there is any interest income from the loan, you need to offer it in your tax return. If your total income is below qualifying limit of INR 2.5 lacs, you do not need to file a return in India.
Also note that any interest payment to you by your parents will require them to deduct 30.90% TDS u/s 195 of Income Tax Act, deposit TDS to government account in ITS 281 challan, file TDS return in Form 27Q and provide you Form 16B - you will have to claim this TDS by filing tax return.
Investment income can be continued to be shown by parents in their return.
No consequence under Benami Act if you execute a proper loan agreement and can provide documentaion for source of funds if asked by ITD.
In my view, a better way you could have done it is by way of GIFT. You could have just executed a simple gift deed on plain paper signifying intention to gift and acceptance by parents - that way, parents will not have obligation to return the money under FEMA and they can use it in whichever way they want.
