In India, corruption in every place rules the roost. There are politicians who are corrupt and there are many bureaucrats who are corrupt. This corruption in every level of the society has permeated that has caused people to suffer a great deal. There are many millions of people who are not corrupt, but because of the fact that the people who are around them are corrupt, these upright people are put in various kinds of troubles.
One of the banes of the society in India is the Benami property. There are various benami transactions that occur in the country. For one to understand what benami property is, a little explanation is needed. If a person is earning money, then the person has to pay tax on the amount that was earned, if the money is above a particular amount. There are many people who try to evade tax and then use the money that they have earned to be transacted in the name of other people. When a person uses the money to be transferred in the other persons name and then finally through that person reuses the money, then the whole process is called as benami transaction.
Similarly, any property that is bought by an individual in the name of other people, usually friends, kith and kin, then the property that is bought by evading the tax sources is called as benami property. There are various reasons for the benami property to be bought and they are listed here.
1. Tax evasion:
The individual who would like to evade tax cannot do so if the property is in the same name of the person earning money, so the name is changed to another person, but the property actually belongs to the person who earned the money and has evaded tax. This is the main reason for the property to be bought in a benami name.
2. Amassing wealth:
An individual will not be able to amass wealth in a same name unless the person pays property and wealth tax. All these kinds of taxes that are earned by the individual will not be taxed if it is in another person's name. This makes these people to buy and amass wealth in the names of fictious people and also in the names of the people who do not earn any money. All this is done so that the person can amass wealth.
The people who mainly deal with all these benami property are those who are either businessmen or politicians. The corrupt politicians are able to earn a lot of money and they want to make sure that they are able to keep as much of the money they have earned for themselves. This is possible by amassing wealth in benami transactions and kept as benami property.
What is done about benami property?
The amassing of wealth without the knowledge of the government is criminally wrong. So, the benami transactions and properties are a hush hush matter. If the property comes to the notice of the economic offences wing or the Enforcement directorate, then the whole wealth will be taken over by the government. To make sure that this does not happen, the people who indulge in these activities try to keep this as secretive as possible and do not disclose information regarding this.
About Author / Additional Info: