To crack down on unaccounted deposits, government may invoke Benami law

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Updated: December 08, 2016 6:34 PM

The Benami Transactions (Prohibition) Amendment Act, 2016 provides for rigorous imprisonment of up to 7 years, and a fine which may extend to 25 per cent of the fair market value of the benami property.

There have been instances of people using these accounts to launder their illicit wealth. After it recognised the misuse of the system, government is planning to use its powers under the Benami law. (PTI)There have been instances of people using these accounts to launder their illicit wealth. After it recognised the misuse of the system, government is planning to use its powers under the Benami law. (PTI)

Since the government announced its decision to demonetise old notes of Rs 500 and Rs 1000, a significant rise in Jan Dhan accounts has been noticed. The data suggests, a jump to Rs 74,321.55 crore as on November 30 from Rs 45,636.61 crore as on November 9, as quoted by Indian Express. There have been instances of people using these accounts to launder their illicit wealth. After it recognised the misuse of the system, government is planning to use its powers under the Benami law.

The Benami Transactions (Prohibition) Amendment Act, 2016 provides for rigorous imprisonment of up to 7 years, and a fine which may extend to 25 per cent of the fair market value of the benami property. For the people using others accounts to convert unaccounted wealth into white money, the law gives power to the government to confiscate the deposits of such people. According to the sources, the unaccounted cash deposits in others’ account includes the definition of property under the amended benami law, passed by Parliament in August and notified from November 1.

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Though the banks have indicated that they lack the capacity to differentiate between the money deposited as black money or white money. Bankers said that the only thing they have in their control is information and that they will provide to the agencies for investigation.

The Central Board of Direct Taxes said that the cash deposits in the Jan Dhan accounts have been inconsistent, and aberrations were detected after persons, who have never filed returns as their income is shown below the taxable limit, moved money into this scheme.

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