'Changes in Benami Act will block black money in realty'

The government on Friday said the proposed amendments to the Benami Act will enable confiscation of such property, prosecution of offenders as also help deal effectively with the menace of black money within the country.

The Budget 2015-16 has proposed a new and comprehensive Benami Transactions (Prohibition) Bill, which is likely to be introduced in Parliament in the current session.

"This law will enable confiscation of benami property and provide for prosecution, thus blocking a major avenue for generation and holding of black money in the form of benami property, especially in real estate," Minister of State for Finance Jayant Sinha said in a written reply in the Lok Sabha.    

The Benami Transactions (Prohibition) Act was enacted in 1988, but the rules under that Act could not be formulated because of inherent infirmities in the Act, Sinha said.

Following this in 2011, the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.

The Bill was referred to the Standing Committee on Finance for examination, which submitted its report in June 2012.

However, the Bill lapsed with the dissolution of 15th Lok Sabha, he added.

Sinha said the Budget has also proposed amending the Income-Tax Act to prohibit ‘acceptance or payment’ of advance of Rs 20,000 or more in cash for purchase of immovable property.

About black money stashed abroad, the minister said varying estimation of the amount of illicit money moving out of the country has been reported by different persons or institutions.

"However, there is no official estimation of the amount of black money stashed abroad/illicit money moving out of the country," he said.

To a separate question on whether the government was aware that the cumulative illicit money moving out of the country between 2003 and 2012 has risen to $439.59 billion, he said the amount was based on a report on 'Illicit Financial Flows from Developing Countries: 2003-2012' by US-based Global Financial Integrity released in December 2014.

Photograph: Reuters. The image is used for representational purpose only