Wednesday Mar 20, 2019
In a recent press release, the Federal Board of Revenue (FBR) explained what a benami transaction or property is.
1) When a property is transferred to, or is held by, a person but it has been paid for by another person – a trustee and wife, child, brother or sister
2) A transaction or arrangement of a property made in a fictitious name, or a transaction or arrangement of a property where the owner is not aware of, or denies knowledge of, such ownership
3) A transaction or arrangement of a property where the person providing the consideration is not traceable or is fictitious.
Such properties can be plots, houses, shopping plazas, shops, housing schemes, bank accounts, vehicles, business shares, jewellery, foreign currency, legal documents and intangible properties, having financial value.
The Federal Board of Revenue has enforced the Benami Transactions (Prohibition) Rules, 2019. Officials of the Inland Revenue Service have been assigned the duty to establish cases against benami properties and submit a challan to the adjudication authority within 120 working days.
During this period, the sale, purchase and transfer of such property has been banned till further orders. If the crime of benami transactions is proved, criminal proceedings will then be initiated against the accused persons. The convicted can be imprisoned for one to seven years.
Under the law, the whistle-blowers are entitled to a cash reward for providing credible information leading to the detection of a benami property or transaction.
If property is worth Rs.2,000,000 or less, 5 per cent of price of the property will be given to informer. If property’s worth is more than Rs.2,000,000, 4 per cent will be given to informer and where the value of property is more than Rs.5,000,000, 3 per cent will be given to informer.