New Delhi: After enacting a law to bring back black money stashed abroad, the government Wednesday moved on the domestic front by introducing in the Lok Sabha a bill providing for confiscation of property and jail for benami transactions in a bid to unearth unaccounted wealth.
Hours after the Cabinet cleared the measure, Minister of State for Finance Jayant Sinha introduced the Benami Transactions (Prohibition) Bill as the House was to conclude the Budget session.
The government indicated that it was prepared to send the bill to a standing committee for scrutiny following demand from the opposition.
Later speaking to reporters, Finance Minister Arun Jaitley said benami dealings have to be made illegal.
"Those who keep property in benami in the country, this process has to end. This has to be made illegal," Jaitley told reporters shortly after the bill was introduced in Lok Sabha.
The Finance Minister further said the law to deal with benami transactions was enacted in 1988, but never implemented.
That is why "this new legislation is being brought. This is a positive step," he said.
The bill provides for stringent measures like confiscation of wealth, imprisonment and fine for violators.
When asked if the legislation will be passed in the ensuing monsoon session in July, he said it will depend on when the Standing Committee, to which the bill has been referred to, gives it report.
Apart from confiscation, the Bill provides for prosecution and aims to act as a major avenue for blocking generation and holding of black money in the form of benami property.
Sources said the government has expanded the definition of "property" in the benami bill and has also introduced a clause for 'known source of income' for buying assets.
For decades, benami transactions by nature have been entered into by people who buy immovable and other properties in others' names to avoid tax and disclosure of ownership.
It has been one of the major sources of generation of domestic black money. There are no exact estimates of how much black money is involved in benami transactions.
"As a sequel to the announcement in the budget, the Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to amend the Benami Transactions (Prohibition) Act, 1988 by moving of the Benami Transactions (Prohibition) (Amendment) Bill, 2015 in Parliament," said an official statement after the Cabinet cleared the bill.
"The Benami Transactions (Prohibition) (Amendment) Bill, 2015 provides for attachment and confiscation of benami properties and also fine with imprisonment. This is one more initiative to fight the menace of black money inside the country," said an official statement issued after the Cabinet meeting.
Jaitley in his budget speech this year had announced that a comprehensive bill on the subject will be introduced to curb domestic black money.
Earlier in the day, the 'Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015' was approved by the Rajya Sabha, two days after the Lok Sabha passed the same.
The legislation will provide a compliance window to those holding undisclosed overseas income and assets to declare and pay 60 per cent tax and penalty. After closure of the window, the offenders will have to pay a total 120 per cent tax and penalty besides facing up to 10 years jail.
"I want to give a reasonable time for compliance window and further reasonable time for people to deposit tax," Jaitley said.
The original Act was enacted in 1988, but the rules under it could not be formulated due to inherent infirmities in it.
Following this, in 2011 the government had introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed to replace 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.
In the past, the CVC had also sought stricter laws to confiscate benami properties in order to deter people from spending or investing money acquired through corrupt means.
"An effective anti-corruption strategy should aim at measures which make it difficult for the corrupt to spend or invest in ill-gotten wealth.
"Most of the wealth in India which is accumulated through corrupt means gets invested in benami immovable property, gold and jewellery, high value consumer goods and other conspicuous consumption," as per the draft of CVC's 'National Anti- Corruption Strategy', which is yet to be finalised.
