Law of Benami Transaction Pakistan

However, benamidar has the right to appeal the decision of the arbitration authority to the Federal Court. Following the final decision of the Federal Court [if convicted], these assets will be seized and auctioned by the federal government. To strengthen enforcement, the Benami rules state that RBF will also sanction a reward for whistleblowers for providing credible information leading to the discovery of a Benami property or Benami transactions. In the case of Benami transactions, the person reporting the Benami transactions to the authorities is entitled to a cash price in certain circumstances, for example if the information provided is credible and leads to the discovery of Benami or Benamidar goods. It is equally important that the public understand the authorities empowered to prosecute Benami transactions under the Act. In order to enforce its provisions, the Commissioner of Tax Administration will be the licensing authority, the Deputy Commissioner of the Tax Administration will be the originator for cases involving Benami transactions, and the Deputy Commissioner of the Tax Administration will exercise the powers and functions of an administrator. These authorities report to RBF, which notifies their responsibilities, powers and functions. It should be noted that the transfer of property after forfeiture by the federal government will be null and void, and the provisions of the Benami Act will prevail over other laws. Any violation of the Benami law will not be recognizable. If a violation of the Benami Law is committed by a company, any person responsible for the management of the affairs of that company will be considered guilty and may be prosecuted and punished accordingly. In cases where an accused benamidar is convicted, a severe prison sentence of 1 to 7 years is imposed.

On the other hand, if the informant has made false accusations and provided unfounded information, he will also be sentenced to a severe prison term of six months to five years. In addition, the FBR notifies the decision-making authority, which consists of a chair and at least two members and has the authority to regulate its own procedure. He will have the same powers conferred on a civil court under the 1908 Code of Civil Procedure when he hears an application under the Benami Act. In addition, the presumed owner of the land in question is known as “Benamidar”, while the property in question is known as “Benami property”. The list of people who cannot be called benamidar excludes trustees of the beneficial owner, such as spouse, children, brother or sister, to whom ownership was transferred from known resources. The practice of retaining benami property – movable or immovable – plays an important role in preventing tax evasion, money laundering and terrorist financing. The law prohibits a person from entering into a Benami transaction in which property is transferred to someone – a Benamidar – but the consideration for that property is paid by another person and the property is held for the direct or future direct or indirect benefit of the person who provided the consideration (the beneficial owner); a real estate transaction carried out under a fictitious name; a real estate transaction in which the owner of the property has no knowledge of the property or denies knowledge of it; or a real estate transaction where the person providing the consideration is fictitious or cannot be located. Well, the part where Benami property is harder to understand is when it comes to deciding which properties are legal and which are Benami. We will help you understand this in the next part of this blog. According to the Benami Act defined by the Federal Board of Revenue, the Benami real estate type includes real estate products such as land, land records, houses and apartments, shopping malls, shops, or housing plans. In addition to real estate, bank accounts, vehicles, business actions, jewelry, currency, and legal documents can also fall into the category of Benami transactions under certain conditions. To administer justice and protect the rights of individuals, the federal government will establish the Federal Court of Appeal to hear appeals against court orders.

The Federal Government shall also notify or designate one or more courts sitting as special courts to deal with an offence punishable under the Benami Act. The Benami Act gives enormous powers to the tax authorities. Their prudent implementation is necessary to prevent any abuse of power. Therefore, the necessary steps must be taken to ensure reliable and credible implementation of this law. Nevertheless, the achievement of the desired objectives of the Benami Act depends on the degree of public awareness and understanding of primary and secondary law. The Benami Act was passed to tackle the problem of tax evasion and black money, particularly in the real estate sector, to ensure that the ultimate beneficial owner and those who encourage or induce a person to carry out Benami transactions are severely punished; allow the tax authorities to seize Benami`s assets, including the proceeds of such property, and to prosecute those who engage in such activities; bringing inexplicable money into the system; closing channels for the circulation of illicit funds, whether proceeds of crime or terrorist financing; and restoring the credibility of Pakistan`s financial system. In simpler terms, the Benami transaction is an agreement in which a property is purchased under a false name while the actual owner of the property is unaware or denies knowledge of that property. Any transaction where the person providing the consideration is not definitively or entirely fictitious is also known as a Benami transaction. Thanks to Zameen.com – Pakistan`s personal property portal – most of us now have a better understanding of what is what and how the real estate sector is moving around the country. Continuing with the same efforts, here is our attempt to help you accept “Benami” transactions.

The Federal Board of Revenue (FBR) recently introduced the Benami Act to address and reduce the threat of tax evasion and create transparency in real estate transactions. The law also greatly benefits Pakistan`s financial system by creating credibility and accountability. By the way, if you are new to the real estate market, read our guide to investing in the Pakistani real estate market and become a real estate transaction professional. According to the official statement of RBF spokesperson Hamid Ateeq, “a Benami transaction occurs when [movable or immovable] property is transferred or held by one person and the consideration for that property has been paid by another person.” The law provides for severe penalties for those who enter into Benami transactions. Anyone convicted of the crime is punished with a severe prison sentence of at least one year, which can be up to seven years, and a fine of up to 25% of the market value of the property. In addition, any person or official who provides false information or documents to an authority in connection with proceedings under the Benami Act shall be liable to severe imprisonment of at least six months, up to five years, and a fine of up to 10 per cent of the fair market value of the property. However, the initiation of criminal proceedings requires the consent of the FBR. In order to enforce any provision of the Benami Act, each authority has full and unfettered access to all premises, premises, accounts, documents or computers without notice and has the power to seize and retain such documents and records for three months. The initiating agent will have the authority to hold the Benami property for 90 days, and the competent authority will have the authority to confiscate the property considered to be Benami property.

Posted in Dawn, The Business and Finance Weekly, 25 March 2019 In this blog, we`ll give you a comprehensive overview of what “Benami property” means, and then discuss the types of Benami property and what Pakistani law says about them. The Federal Board of Revenue (FBR) released the 2019 Benami Trading Ban Rules on March 11. With the implementation of the Benami rules, the Benami Transactions (Prohibition) Act 2017 came into force, which was published on February 17, 2017. The Federal Board of Revenue`s statement of the latest Benami Act states: “The Benami Transaction Prohibition Rules, 2019 have already been enforced with immediate effect and the Inland Revenue Service`s BTB zones have been mandated to file lawsuits against Benami properties and submit Challan to the arbitration authority within 120 business days. As mentioned at the beginning of this article, the Benami transaction rules (also known as the Benami law) were introduced primarily to solve the problem of tax evasion and money laundering. The Benami transaction rules could have a profound impact on the real estate industry, as the sole purpose of these laws is to create transparency when buying and selling real estate.