After the historic drive to scrap high denomination notes, the Narendra Modi government has now decided to crack down on benami or dubious property deals.
The Income Tax department on Friday put out a big notice warning taxpayers not to enter into dubious deals as the Benami Property Transactions Act was now in action from November 1.
The Prohibition of Benami Property Transaction Act of 1988 came into effect from November 1, 2016.
“Benami property may be attached and confiscated by the government,” the notice said.
The tax department also warned those indulging in the shoddy property deals with jail term and hefty fines.
“Benamidar (in whose name benami property is standing), beneficiary (who actually paid consideration) and persons who abet and induce benami transactions are prosecutable and may face rigorous imprisonment up to 7 years besides being liable to pay fine up to 25% of fair market value of benami property,” it said.
Persons who furnish false information to authorities under the Benami Act are prosecutable and may be imprisoned up to 5 years besides being liable to pay fine up to 10% of fair market value of benami property, it said.
While the demonetisation drive was aimed at fighting the menace of black money, corruption and terror funding, many critics have pointed out that tax dodgers have already spend a major portion of the unaccounted money into real estate, gold and other assets.
In December, Modi warned that the fight against black money was not over with demonetisation as the next step will be a crack down on benami properties.
The Modi government has so far enacted the Undisclosed Foreign Income and Assets (Imposition of Tax) Act to bring back cash stashed abroad, and launched two Income Disclosure Schemes (IDS) before and after note ban.
On November 8, Modi announced scrapping of old Rs 500 and Rs 1,000 notes which amounted to Rs 15.44 lakh crore or 86% of the total currency in circulation.
The government and Reserve Bank of India has been able to pump in about Rs 10 lakh crore in new Rs 55 and Rs 2,000 notes so far.