Benami Transactions Act
Warning for the ones who are depositing someone else’s money in their bank account; Benami Transactions Act has came into rule. Let’s give you a glimpse of things that you really need to know about this act: As proclaimed by The Income Tax Department in a newspaper advertisement, “Benami (proxy) transactions, unaccounted transaction shall be punished with rigorous imprisonment from 1 year to 7 years and shall be liable to fine.” So be aware of consequences and stop making illegal deposits.
After analyzing that people are depositing the demonetized currency in the bank accounts of poor people to dodge income tax authorities, government announced Benami Transactions Act which is now in its Stealth Mode. The Benami Act is a new altered version of an Act that goes by the same name & it came into existence in 1988. For full-fledge details regarding Benami Transactions (Prohibition) Act 1988, Look Below This Page.
Benami Transactions Act
Highlights Of The Act
- Any person held liable for transferring the demonetized money in other person’s account, will be subjected to 7 years of imprisonment as per the rules of Benami Transactions Act.
- Income Tax Department is constantly keeping an-eye on the cash deposits exceeding an amount of Rs. 2.5 Lakh.
- RBI has warned people engaged in this type of activity, strict actions will be taken against them.
Role Of Income Tax Department
Now the banks have to report Income Tax Department about all the cash deposits made by the people that exceed an amount of Rs. 2.5 Lakh. However, you can submit all 500 and 1,000/- Rs. currency notes till the end of this year but after that, banks won’t accept such deposits.
Let’s See What Chief Editor Of Cleartax.Com ‘Preeti Khurana’ Have To Say About This
“The tax department can question cash deposits and depositors may have to explain and justify that, cash deposits that have been made from disclosed income to avoid penal consequences”.
Do You Know About This: 20 Places Where You Can Still Use Your Old Rs 500 Notes
Sandeep Sehgal, Director Tax At Ashok Maheshwary & Associates Llp, Also Made His Contribution On This Matter
“It is noteworthy that under this law property means any property whether movable or immovable, or tangible or intangible. Hence it would cover cash as well within its ambit. Therefore, if someone deposits any cash on behalf any other person in his own account, such a transaction would be considered as a Benami transaction”
“The application of this Act could be a game changer in penalizing the people laundering money for other as the act is more stringent than the Income-tax Act, 1961”
So, this is what some of the shining names thinks about Benami Transactions Act.
What If Someone Got Caught With Illegal Money Deposits?
- As per the new Benami Transactions Act, if any person is caught by the bank for depositing money by illegal means, that person will be subject to imprisonment up to the limit of 7 years. Also fine will be imposed on the Benami Property which may goes up till 25% of the market value.
- It any individual identifies that he is having beforehand untaxed cash in his account, that individual will be liable to pay 50% plus amalgamation of levies and taxes.
- Another scheme called the Pradhan Mantri Garib Kalyan Yojana, gives freedom to people to deposit demonetized currency till April. Only one condition is that they need to pay 50% of the total amount to the government. But if in case the owner rejects to do so, 85% will be charged to his account as tax and penalties.
- If any sum of money is found in raid, nearly 90% of the amount will be deducted from that amount as taxes and penalties and the remaining 10% will be given back to the owner.
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