Everything about Benami Transactions in Real Estate

The Government of India (GoI) has tightened the belts to fight against the issue of Black Money. Several reforms have been introduced lately to nab those who have been channelizing their unaccounted resources through different means. One of the most vital reforms in this series is – The Benami Transactions (Prohibition) Amendment Bill, 2015. This bill is the amendment to the original Benami Transactions Law, 1988.


Any property transaction in which the property is registered in the name of one person & its consideration/payment is provided by another person. The ‘property’ can be any movable/immovable asset including even gold & financial securities.

The person in whose name the property is registered is termed as ‘Benamidar’. To add to it, a Benamidar may or may not be a real person. It may simply be a fictitious person or a real person unaware of the ownership of the property.  Have a look at the snapshot below for better understanding.

In such cases, directly or indirectly, the real beneficiary is the person making the payment.


GoI has been a bit generous in exempting few cases from the purview of Benami Transaction. These include cases where a property is held by:

  1. A person in the name of his/her immediate family including children & spouse. But the consideration should have been paid by know sources of income of family.
  2. A member of Hindu Undivided Family. Here also the source of income should be known.
  3. A person in the fiduciary capacity for a trust.


In the amended bill, a 3-tier structure of authorities has been established to take strict actions against Benami Transactions. These include:

  1. Initiating Officer: Initiates the notice against a person, he believes is a benamidar. He may hold the property for up to 90 days & collect all the related necessary documents/evidence from the benamidar & other sources.
  2. Adjudicating Authority: Based on the documents & evidences collected by the Initiating Officer, the Adjudicating Authority will pass an order whether to confiscate the property or release it.
  3. Appellate Tribunal: Any appeals against the orders of Adjudicating Authority can be made to the Appellate Tribunal. Any appeals against the Appellate Tribunal can be made to the High Court.


  1. Rigorous imprisonment from 1 year to 7 years
  2. Confiscation of the Benami Property
  3. Monitory fine up to 25% of Fair Market Value of the property


  • I believe that the introduction of Benami Transactions Amendment Law will have a strong effect on the GoI’s campaign against Black Money
  • But simultaneously, the real estate market will be impacted adversely & the market will be left with fewer buyers
  • There will be reduction in real estate frauds & the sector will become more organized
  • It will be beneficial for Loaning Agencies, as the available properties will be more authentic

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GST - Catalyst or Dampener for Real Estate?


GST is a ‘Single Indirect Tax’ on the supply of Goods & Services, right from Manufacturer to Consumer, which will encapsulate all the existing individual indirect taxes like VAT, Excise, Service Tax, etc. It is one of the most awaited tax reforms which recently got unanimous approval from both the Parliament Houses in this monsoon session. GST tries to simplify the complex tax structures & related issues by merging various taxes into one.


Currently, the taxes applicable to Residential Real Estate transactions are - Service Tax, VAT & Stamp Duty. After the implementation of GST, Service Tax & VAT will be replaced by Central GST & State GST, whereas the Stamp Duty will remain unchanged as it is out of the orbit of GST. This will ensure more transparency to Indian Real Estate Sector. Let’s see how!


GST will be applicable only on under-construction & rental properties, leaving aside the ready-to-move-in & other immovable properties. Major impact can be seen on construction costs & input credits. Impacts of GST on various transactions are listed below:

Transfer by way of sell of immovable property is outside the ambit of GST. Immovable property will include lands/plots. There is no impact on the same.
  • Under the current tax structure, Service Tax & VAT are levied on construction materials & works. Whereas under GST, only one tax will be levied. This will have direct impact on lowering the cost of construction.
  • Currently, input taxes are not creditable to the builders, developers & end users. Hence, this non-credit cost is the main reason behind the higher final prices of the properties.
  • Now under GST regime, there will be free flow of credits GST will strengthen the credit chain. Developers will get free input credits on GST paid by them, which in turn will lead to lower overall costs.

Residential Leasing/Renting is not covered under the Service Tax currently. It continues to be same under GST too. No impact.
  • Commercial Leasing/Renting is currently taxable under Service Tax at the rate of 15.00%. It continues to be covered under GST too.
  • GST will provide the commercial lessee/tenant negotiation power to negotiate on the lease/rents paid, as the builder will now enjoy input tax set off on the GST paid on the lease/rents.
  • However, the actual magnitude of effect will be known only after GST rates are decided finally.

“It will be important to see what the final rate of GST would be because if the rate is higher than the existing cumulative taxes, it will certainly be a dampener as it will increase the final cost for buying an under-construction flat and defeat the purpose of the bill,” said Neha Hiranandani, director, House of Hiranandani, a property developer based in Mumbai.
I totally agree with Ms. Neha & believe that the final tax rate of GST will stabilize the speculations of GST. However, with improved economic environment, I am hoping for positive response in realty sector. In any case, there will be a sturdy blow to this industry which is stagnant these days.

Author: Kopal Mittal

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Have you ever wondered what numerology is? I am sure you have!
Numerology is the mystical relationship between numbers and events; it is the study & interpretation of numbers.

These days Numerology is playing a vital role in Real Estate. Whenever a man plans to purchase his home or make any other investment, he makes all the possible efforts to make his home happy & investment fruitful.

While purchasing a property many factors are considered like neighborhood, budget, connectivity and other modern amenities. Now-a-days Numerology is also one of them!


House number is an important key if you talk about Numerology. People are always in search of an address having their lucky number. It is so because they put all their positive vibes, mental power and confidence in it, which leads to their psychological satisfaction.

But the question is - how to apply numerology in your house number?
To know your house number add all the numbers in your address until you arrive at single digit i.e. 1 to 9. For instance if your address is ‘68, Park Avenue’; then your house number will be 6 + 8 = 14 => 1 + 4 = “5”. Every number has its own pros and cons.


Different countries have their different perceptions of numbers. A number can be deemed as lucky in one country while the same number can be believed to bring bad luck in another country.

In China number ‘4’ is considered as unlucky because in Chinese language it sounds like death.

Generally, numbers ‘8’ & ‘13’ are deemed to bring bad luck. Many builders while construction skip floor number ‘13’. Thirteenth floor have rates lower as compared to others. Prices may vary about 10% to 15% as compared to others. Almost 85% of the buildings do not have floor number ‘13’. This superstition is not limited only to floor, but also to apartments, room numbers and in some cases street addresses too. But in Italy, number ‘13’ is held as lucky because it is associated with the “Great Goddess”, who is responsible for fertility and lunar cycles. It is believed that number ‘13’ brings prosperity and life.

Number ‘8’, on the other hand is believed to bring evil effects like poverty, accidents and deaths in non-Asian countries as it is believed to be associated with the Saturn. Number ‘8’ is shaped like infinity symbol showing - “What goes around comes around”. In contrast, in Asian countries number ‘8’ has a special significance as it sounds like ‘wealth’ or ‘fortune’. It is associated with good returns over the long term. Statistics show that in Asian countries about 20% of home listings ends with number ‘8’ while in non-Asian nations, this figure is limited to only 4%.

In India there is a saying that amount of transaction money should end in number ‘1’ & should not be an even number, as the extra penny is said to bring good luck. For instance, instead of Rs. 1,000.00, Indians prefer to receive Rs. 1001.00


Different numbers have different vibrations; some vibrations may suit you while others may not. At the end your address sets the tone of your residential space. Hence, while purchasing your house, it is wiser to make sure that your house number is compatible to you or not.

DISCLAIMER: The above facts & thoughts are author’s individual beliefs. This post doesn’t intend to influence any buying decision. It’s wise to take decision based on one’s individual cognizance.

Author: Kopal Mittal

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