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The Central Board of Direct Taxes (CBDT) has proposed enhanced measures to tackle benami real estate transactions. A recently submitted report recommends granting tax officials access to Aadhaar data, state property registries, and vehicle records to identify 'dummy directors' in shell companies. The panel also suggests amending laws to allow confiscation of assets linked to benami properties when the actual beneficiaries cannot be traced. These steps aim to address existing legal loopholes and strengthen enforcement against illicit property dealings.
The Central Board of Direct Taxes (CBDT) has recommended stricter measures to combat benami real estate transactions, where properties are held in the names of individuals who are not the actual owners. Such arrangements often involve faceless persons, slum dwellers, or poor laborers in tribal villages, who hold properties worth crores on behalf of the real owners masking their identities. Advertisement
A panel constituted by the CBDT has proposed that tax officials be granted access to Aadhaar data, state property registries, and 'Parivahan' vehicle and driving license records. Additionally, the panel suggests amending laws to allow the confiscation of other assets belonging to actual beneficiaries if a benami property is untraceable. The committee, which submitted its report recently, also recommends identifying 'dummy directors' in shell companies holding benami assets. Tax officials should investigate companies where half or more directors have no income, majority shareholders do not file tax returns, and unsecured loans significantly exceed the share capital.
In benami transactions, the consideration for a property purchase is paid by one person, but the purchase is made in the name of a third person or a fictitious entity. The panel emphasizes the need to link the Income Tax department's 'Insight' portal with the Aadhaar database. Currently, information such as Permanent Account Number (PAN), bank accounts, property purchases, and demat accounts are linked to Aadhaar. However, accessing details through the 'Insight' portal is only possible if the individual has a PAN. Since many benamidars do not possess a PAN, and some may be farmers without PANs, this linkage is crucial for effective identification.
The report suggests that allowing benami processing units to access Aadhaar data through the 'Insight' portal would be valuable. To address privacy concerns, access could be restricted to 'view-only' details of Aadhaar-linked immovable properties and bank accounts. This approach would enable tax authorities to trace and take action against benami transactions more effectively.
These proposed measures aim to enhance the Income Tax department's ability to tackle benami transactions by addressing existing legal loopholes and ambiguities. By strengthening enforcement mechanisms and improving access to critical data, the government seeks to curb illicit property dealings and promote transparency in the real estate sector.
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