It’s a dramatic change that affluent India is yet to come to terms with. To many, the attachment of SRK’s Alibaug bungalow by Income-Tax authorities has come as a rude wakeup call.
Till now, all that mattered to the taxman was the source of money. As long as the amount was declared in the tax return, no questions were asked. The law against ‘benami’ deals has radically altered that settled belief.
The action has sparked off fears and brought to the fore far reaching implications of the Benami Transactions (Prohibition) Amendment Act which came into effect from November 1, 2016, after amending a 28-year-old law. What kind of deals can break the law? Innocuous, unsuspecting transactions like funding your brother, or sister, or parents to acquire assets.
Sharp, unethical deals like funding someone (a front) who ‘owns’ farmland on your behalf for your holding to remain within the permissible holding limit; side-stepping Sebi’s takeover code by owning shares through another party whom you bankroll; or, buying an apartment for the other woman by lending her the money.