Black money fight gets teeth

The Lok Sabha on Wednesday passed the Benami Transactions Amendment Bill, which aims to give teeth to the government measures to prosecute and confiscate transactions arising out of black money. The government has also clarified that bonafide charitable trusts, including religious bodies, can get exemption by the authority under the law.

While replying to discussions on the bill, which has already been passed by the Rajya Sabha, Union finance minister Arun Jaitely said that the original law promulgated in 1988 had not provided for the mechanism to acquire and prosecute those indulging in benami transactions. He stated that the rules under the 1988 law had not yet been framed.

“A lot of people who have unaccounted money buy benami property in the name of fictitious persons. These transactions have to be discouraged,” said Mr Jaitely. While responding to the concerns of Shiromani Akali Dal (SAD) MP Chandu Majra about the properties in the name of Guru Granth Sahib, Mr Jaitely said: “The government under the new law will exempt bonafide charitable and religious entities. There is Section 58 under the law which clearly states that charitable or religious organisation properties, the government has power to exempt those. If there is a genuine property which belongs to a church or a mosque or a gurdwara or a temple, Section 58 says that the government has the power to exempt it.”

He, however, warned that exemption to such entities, can not be a pretext for tax evasion.

He added, “If you make any illegal business out of it... If you create a fake religious sect and start keeping benami property, then government won’t exempt it, so please don’t do that.”

Responding to Trinamul Congress MP Saugata Roy’s statement that the Parliamentary Standing Committee had recommended a fresh new bill and not just an amendment to the 1988 law, Mr Jaitely said: “A new law would have given immunity to persons who acquired benami properties during the period from 1988 to 2016. The Constitution states that the penal provisions can not be applied with retrospective effect.”

While the 1988 Act has nine sections, the amended law would have 71 sections.

Mr Jaitley said that offences under the amended law would be non-cognisable as the government does not want multiple agencies to get involved and harass people.

While the existing law provides for up to three years of imprisonment or fine or both for carrying out benami transactions, the amended legislation would provide for seven years imprisonment and fine. Mr Jaitely also stated that the government has accepted the Parliamentary Standing Committee’s suggestion to change the words in the bill from “known sources of income” to “known sources” with a view to further strengthen the provisions.