The Government’s recent move of demonetization [of Rs.500 and Rs.1000 notes] has been termed by many as a “surgical strike” on black money. Since then, there are rumors floating around that “Benami” Properties would most likely be the next “target” under the government’s agenda.
In this blog, we have tried to put this in the right perspective.
So, what is a “Benami” Property?
To recap from our last blog article, a Benami property is one where a property is paid by one person, and that property is registered in the government’s records under a fictitious name. Hence the term Benami – “without name”. Read More
Whether anyone denies it out rightly or accepts it boldly, hard reality is, whenever we talk about property transactions, context of black money and white money come into picture.
The Prime Minister’s announcement on the demonetization of Rs. 500/- and Rs. 1000/- has impacted all spheres of life tremendously. As far as realty is concerned, the historic announcement on November 8th, 2016, changes the holistic view of the real estate market. It is an open secret that a lot of black money has been invested in realty. One may wonder how it can escape being traced. Let us look at a simple illustration. “A” wants to buy a property “X” from “B”. The price agreed between the parties is one crore, while it’s market value [value of the property as evaluated by the Government] is 75 Lacs. This makes it possible for “A” to show the price in the sale deed as 75 Lacs and pay applicable stamp duty and registration fee on that amount. “A” now pays “B” the balance amount of 25 Lacs, in cash. So the sale is concluded for one crore although the documents reveal the sale price as 75 lacs.