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Income tax Rules

Changes in the income tax rules effective from 1st April, 2023 (For Financial Year 2023-24)

April 8, 2023

In this article, we will discuss about the difference between Financial Year (FY) & Assessment Year (AY) & changes made in the income tax rules effective from 1st April, 2023 (For Financial Year 2023-24).   Difference between Financial Year (FY) & Assessment Year (AY)   From Income Tax point of view, FY is the year in which income is earned by assessee. AY is the year following the financial year in which assessee need to evaluate the previous year income and pay taxes on it. For Example – If assessee financial year is from 1st April 2022 to 31st March 2023 (i.e., FY 2022-23), then assessment year is the period which will begin after the financial year ends (i.e., AY 2023-24 from 1st April 2023 to 31st March 2024).   A taxpayer should file an income tax return (ITR) in the assessment year (AY), which is the year following the completion of a financial year. Taxpayer should calculate his/her income for full FY & calculate tax on such income, if any.He/she need to file ITR when his/her total income exceeds Rs 2.5 lakh after claiming deductions & exemptions allowed under income tax act. He/she can claim credit for advance tax, TDS & TCS paid during the financial year at the time of filing his/her ITR return.   Changes in the income tax rules effective from 1st April, 2023 (For Financial Year 2023-24)   1  New Income Tax regime to be default regime   From 1 April 2023, the new tax regime will be the default tax regime. If any assessee chooses new tax regime, then he/she will not have to invest in any investment tools such as PPF, NPS, LIC, ELSS etc. to claim deduction u/s 80C, 80D, 80CCD(1B). However, assessee will still be able to choose the old regime tax.   2.  Tax rebate limit is increased to Rs 7 Lakhs   Tax rebate limit under new tax regime has been increased to ₹7 lakh from ₹5 lakh in earlier income tax slab. Tax-free limit for salaried taxpayers under old regime is Rs 5.5 lakhs & under new tax regime is Rs 7.5 lakhs. So, it means that an individual with a salary of less than this tax-free limit under new tax regime will not have to make any investments to claim deductions. Also, no TDS will be deducted if the salary income is within the tax-free limit.   3.  New Income Tax Slab Regime for Salaried persons & pensioners including family pensioners   Up to Rs 3,00,000                                           – Nil Above Rs 3,00,000 & up to Rs 6,00,000   –  5% Above Rs 6,00,000 & up to Rs 9,00,000   – 10% Above Rs 9,00,000 & up to Rs 12,00,000  – 15% Above Rs 12,00,000 & up to Rs 15,00,000 – 20% Above Rs 15,00,000                                         – 30% Note – The new tax regime will be the default choice, but assessee can still opt for the old tax regime.   4.  Standard Deduction & Family Pension deduction   There is no change in standard deduction of Rs 50000 under old tax regime for employees. For Salaried persons & Pensioners, the benefit of standard deduction under the head salary of Rs 50,000 & family pension deduction of Rs 15,000 will now be allowed under new tax regime also.   5.  No LTCG tax on debt mutual fund   Investments in debt mutual funds will be taxed as per the income tax slab rate of the assessee from 01.04.2023. Earlier, if debt mutual funds were held for > 36 months, then it will be treated as LT capital assets & Long-Term Capital Gain @ 20% with indexation benefit was allowed but now it has been removed.   6.  Taxation on Life Insurance Policy   Any sum received from life insurance policy having premium annually in a financial year is more than Rs 5 lakh would be taxable from 1st April 2023. This Income tax rule will not be applicable on ULIP policy. Any amount received on the death of the person insured will still be exempt from tax.   7.  Tax on Online Gaming   As per the new Section 115BBJ, tax on winnings from online games i.e., all forms of winnings such as cash, kind, vouchers or any other benefit from online gaming will be liable to tax at a flat 30%, which will be deducted at source immediately at the time of receiving the winning amount. No Threshold limit has been prescribed on deducting tax on winning from online games.   8.  Conversion of Physical gold into Digital gold & vice-versa to be tax-free   Any Conversion of physical gold into digital gold receipts (EGRs) & vice versa from April 1, 2023 will be exempt from capital gain tax. It will boost the digital gold market in India & make gold investment opportunities available to Indian investors.   9.  Gifts received by Resident but not-ordinarily residents (RNOR) will be taxable   Any gift received by an RNOR over and above Rs 50,000 will be taxable in their hands.   10.  Deduction claims under section 54 & 54F will be restricted   Taxpayers who sell their house property or any other capital asset & invest the sale amount in a new house property can claim a deduction under sections 54 and 54F. Now from 1st April, 2023, deduction under sections 54 and 54F will be restricted to Rs 10 crores. Any long- term capital gain (LTCG), if the period of holding is more than 24 months will be taxed at 20% with indexation benefit under section 112.   11.  Senior Citizens Savings Scheme   Senior citizens can now deposit up to Rs 30 lakh under the senior citizens savings scheme from 1st April, 2023. Earlier, the deposit limit was restricted to Rs 15 lakhs. The maximum

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Summary of Income tax notice issued under section 148A & 148 for not reporting income in ITR & its Procedural requirement

April 8, 2023

In this article, we will discuss Summary of Income tax notice issued under section 148A & 148 for not reporting income in ITR & its Procedural requirement.   Reason for Income Tax Notices issued by the department    1   Non – Filing or Late Filing of ITR – Every taxpayer having Gross Total Income (GTI) before claiming deduction is > basic exemption limit, then he/she is required to file ITR within due date, failing to which they may receive a notice from the department. Also, if ITR is not filed for a particular year, department can issue a notice even after several years.   2.  Differences in Income & TDS Details – If the department find any difference between the income declared in the ITR & income reflected in other documents such as Form 26AS, AIS, TIS or Form 16, then they may issue a notice to the taxpayer. Furthermore, if the TDS claimed by taxpayer doesn’t match the TDS details mentioned in form 26AS, then also they may receive a notice from department.   3.  Non-disclosure of Income or Investments – If department suspect that taxpayer has not disclosed all their income or investments detail, then they may issue a notice to the taxpayers for non-disclosure of income or investments to the taxpayer.   4.  Tax Dues or Refund Adjustments – If a taxpayer has any outstanding tax dues or any interest, fees or penalty pending, then also department may issue a notice to recover the dues pending. Moreover, If a taxpayer has claimed any refund in his ITR then also department may adjust the refund against any outstanding dues & issue a notice for balance tax to the taxpayer.   5.  High Value Transactions – High value transactions include purchase or sale of property, investments in stocks, mutual funds, bonds, FD, TD etc. Taxpayer must report these transactions in their ITR & pay the required taxes applicable on it, otherwise if department find any differences or non-reporting of these transaction income, they may issue a notice.     Asking for Explanation under section 148A & issue of notice under section 148 by the department    As per Section 148A of the Income Tax Act, if income tax officer has information that the taxpayer has escaped income for any assessment year on which tax is payable in that case, the officer will provide a chance to the taxpayer to explain their case before issuing notice. The assessee gets a chance of opportunity of being heard by the officer.   AO will give assessee not less than 7 days but not more than 30 days for furnishing his/her explanation.   After seeing the taxpayer’s reply, the AO shall decide whether it is a fit case to issue notice for income escaping assessment under section 148. If the AO decides to reopen the case, a copy of the order & a notice under Section 148 must be issued to the taxpayer.   If the AO is dis-satisfied with the submissions filed by the assessee, then he shall pass an order u/s 148A & thereafter issue a notice u/s 148 for the relevant assessment year (RAY), directing assessee to file return of income for the RAY.   After receiving the order u/s 148A & notice u/s 148 the assessee needs to file the return of income for the RAY within time prescribed in the notice u/s 148 and proceedings for assessment will start.   Time Limit for issuance of notice under Section 148A   As per Section 148A, a notice can be issued within 3 years from the end of the relevant assessment year. However, notice can be issued beyond 3 years but up to 10 years from the end of the relevant assessment year, only if there is evidence that the taxpayer has escaped taxable income of at least Rs 50 lakhs.   AO shall obtain the approval of specified authority (Principal Chief Commissioner or Chief Commissioner) before conducting any such enquiries, also providing an opportunity of being heard to the taxpayer before passing order u/s 148A. However, this provision is not applicable in search or requisition cases.   Difference between Section 148A & 148 of the Income Tax Act   Section 148 provisions from 1 April 2021 have some amendments making it mandatory to follow the procedures specified u/s 148A, before issuing of notice u/s 148.   From 1st April 2021, the AO under the new provision u/s 148A requires to conduct an inquiry or provide the taxpayer with an opportunity to be heard in relation to the information that indicates that the income chargeable to tax has escaped assessment, which requires the assessee to explain his case & to get the proceedings dropped with the satisfaction of the AO. AO must obtain prior approval of specified authority before issuing such notice u/s 148A.   It is obligatory for the AO to issue notice u/s 148A(b) to the assessee, containing the information along with material evidence which has escapement of income, which can be countered by the assessee by way material and evidences available with him.   This is a major change from the old provision of Section 148 in which the information of reason for re-opening of case and satisfaction recorded by the AO was made available to the assessee only after issuance of notice u/s 148 in the old rule and after filing of return of Income by the assessee.   Section 148 requires that the AO issue a notice to the taxpayer if there is a ‘reason to believe’ by the AO that the taxpayer has escaped reporting any income in the RAY.   After issuing the notice, the AO may assess or reassess or re-compute the total income for such a year u/s 147 of the Income Tax Act.   Happy Readings!   Disclaimer: The information contained in this website is provided for informational purposes only, and should not be construed as legal/official advice on any matter. All the instructions, references, content, or documents are for educational purposes

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Union Budget 2023: Key takeaways from budget 2023, no tax upto Rs 7.5 Lacs in new regime

February 4, 2023

On 1st February 2023, the finance minister presented the Union Budget 2023 in the parliament. In the budget, many important announcements were made which is going to affect your income and taxes in the coming years. Here are the important points and key takeaway from the Union Budget 2023 for your quick reference: 1. New Income Tax Slab regime –   The finance minister has provided relief to the taxpayers by raising the slab structure. If you opt for the new tax regime (Salaried persons & pensioners including family pensioners), the new tax regime slab rates would be as follows:  Income Tax Slab Tax rate Upto Rs 3,00,000 Nil Above Rs 3,00,000 & up to Rs 6,00,000 5% Above Rs 6,00,000 & up to Rs 9,00,000 10% Above Rs 9,00,000 & up to Rs 12,00,000 15% Above Rs 12,00,000 & up to Rs 15,00,000 20% Above Rs 15,00,000 30% Important Points related to the new regime:   (a). The new tax regime will be the default choice, but the assessee can still opt for the old tax regime. (b). Standard deduction under the head salary of Rs 50,000 & Family pension deduction of Rs 15,000 is now to be allowed under the new tax regime. (c). Income tax rebate under section 87A limit increased from Rs 5 lakh to Rs 7 lakh under the new tax regime. (d). For salaried persons, income up to Rs. 7.5 Lacs will be out of the tax bracket now in the new tax regime. Example: If your salary income is upto 7.5 lakhs in the new tax regime, then first your tax calculation would be done as follow: Total Salary Income Rs. 7,50,000 Less: Standard Deduction Rs. 50,000 Net Taxable Income Rs. 7,00,000 Tax on Rs. 7,00,000 Rs. 25,000 Less: Rebate u/s 87A Rs. 25,000 NET TAX PAYABLE NIL (e). Currently, the highest income tax rate is 42.74% (30% income tax + 37% Surcharge + 4% Cess) if the income of the assessee is more than Rs 5 crores. It has been proposed to reduce the highest surcharge from 37% to 25% in the new tax regime, maximum income tax rate will be 39% (30% income tax + 25% Surcharge + 4% Cess). 2. Presumptive Taxation –   For Presumptive taxation under Section 44ADA & Section 44AD, the turnover/gross receipt limit has been increased to Rs 75 lakhs & Rs 3 crores respectively. The increase limit u/s 44ADA & 44AD will apply only in case the amount or aggregate of the amounts received during the year in cash does not exceed 5% of the total gross receipts/turnover. 3. Leave Encashment –   The leave encashment limit on retirement for non-government salaried employees has been increased from Rs 3 lakhs to Rs 25 lakhs. 4. For Co-Operative Society –   Extension of 15% concessional tax benefits to new manufacturing co-operative society, starting manufacturing till 31/03/2024 provided they do not avail any specified incentive or deduction. Also, the Higher limit of Rs 3 crores for TDS on Cash Withdrawal for Co-operative society. 5. For Start-Ups –   The date of incorporation for availing income tax benefits for start-ups business has been extended from 31/03/2023 to 31/03/2024. Furthermore, the benefit of carry forward of losses on the change of shareholding pattern of start-ups has been increased from 7 years of incorporation to 10 years. 6. Capital Gain Exemption –   Income tax exemption from capital gain on an investment in residential house property under sections 54 & 54F is now capped at up to Rs 10 Crores. 7. Online Gaming –   Removal of minimum threshold limit of Rs 10,000 for TDS regarding taxability relating to online gaming. Now, TDS would be without the threshold limit of Rs 10,000 & taxability will be on net winning at the time of withdrawal or at the end of the financial year. However, for the lottery, crossword puzzle games, gambling, betting, etc. The TDS threshold limit of Rs 10,000 will continue to apply. 8. Conversion of Physical gold into Digital gold –   No treatment of capital gain (i.e., not be regarded as transfer) on Conversion of Physical gold into Digital gold & vice-versa. 9. LIC policies –   Any policies taken on or after 01/04/2023, where the aggregate premium paid for life insurance policies (other than ULIP) is more than Rs 5 Lakhs, income from only those policies with aggregate premiums up to Rs 5 lakhs will be exempt. Any amount received on the death of the person insured will still be exempt from tax. Insurance policies issued till 31st March 2023 without the above Rs 5 lakh limit still be exempt from tax. 10. Other Important Amendments –   – Mahila Samman Savings Certificate will be made available for two years, with deposits of up to Rs 2 lakh at 7.5 % interest. – Senior Citizens Savings Scheme deposit limit raised to Rs 30 lakh from Rs 15 lakh. – PAN will become the common business identifier. – Reducing the TDS rate to 20% from 30% on the taxable portion of EPF withdrawal in non-PAN cases. – Taxation on income from Market Linked Debentures. – Now a taxpayer can obtain a certificate of lower deduction of TDS or NIL rate on sums on which TDS is required to be deducted under section 194LBA by Business Trusts. – Agnipath Scheme, 2022 – Any payment received from the Agniveer Corpus fund by the Agniveers enrolled under Agnipath Scheme, 2022 is to be exempt from tax. – Payment made to MSME – Payment made to MSME will be allowed as a deduction when it is actually paid as per section 43B of the income tax act.   Disclaimer: The information contained on this website is provided for informational purposes only, and should not be construed as legal/official advice on any matter. All the instructions, information, references, content, material, or documents are for educational and general informational purposes only and do not constitute any legal advice. We do not accept any

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E-Assessment under the Newly Introduced Faceless Scrutiny System

January 23, 2023

What is the e-assessment scheme for faceless scrutiny of income tax : 1. Under the scheme, the scrutiny notice will be issued to the individual under section 143(2) if he has under-reported his income or over-stated losses. 2. The individual will have to reply within 15 days from the date of receipt of the notice. The notice issued will be sent electronically on the taxpayer’s account on the e-fling website. It will also be sent to the registered email address of the taxpayer or on the mobile app of the income tax department which has the registered mobile number. 3. The individual will be required to respond to the notice or order received through the registered account only. The response shall be considered successfully submitted once an individual has received the acknowledgment from the National e-assessment Centre. 4. Individual taxpayers would not be required to appear either personally or through an authorised representative in relation to the proceedings related to the scheme before income tax authority, National e-assessment center or Regional e-assessment Centre or any unit set up under the scheme. 5. All the communication between the department and the taxpayer would be done electronically. Even all the internal communication within the income tax department will be electronic. 6. The e-assessment scheme will be fully automated. Under the scheme, the National e-assessment center can assign the scrutiny case to any regional e-assessment center through an automated allocation system. 7. If the regional assessment required assistance from the verification unit or technical assistance from the technical unit, then such requests will be processed through the automated allocation system. 8. If the regional assessment unit wants further information or documents from the taxpayer, then such a request first has to be made to the National e-assessment center. 9. The regional assessment unit will make a draft assessment order and send it to the National e-assessment Centre. 10. The National e-assessment Centre will examine the draft received in accordance with the risk management strategy specified by the CBDT. Share It . .

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Precautions to be taken while entering into a Real Estate Transaction

January 20, 2023

In this article, we will be discussing the precautions to take care while entering into a real estate transaction. Let us understand this article in the form of a short story; There are two brothers namely Pushp Kumar Sahu and Uday Kumar Sahu who have entered into a transaction of immovable property worth 48 lakhs INR in cash (value as per Stamp valuation authority 60 lakhs INR). But being not aware of the income tax provisions, they made a transaction violating the various provisions of the income tax act, 1961. Both brothers jointly sold the said property and thereafter received the whole consideration in cash and the same is deposited in the bank account. The first violation of income tax provision which is made by the Sahu brothers is of Section 269ST, as they have received the entire sale consideration in cash which exceeds 2,00,000/- INR. Therefore the penalty will be levied on them under section 271DA at the rate of 100% of the amount received in cash. The second violation made by them was; they have sold the said property at a rate less than the rate as determined by stamp valuation authority [ section 50C]. As per section 50C, where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, is less than the value adopted or assessed by an authority of a state government ( stamp valuation authority) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted for the purposes of section 48, be deemed to be the full value of consideration received as a result of transfer. The last mistake made by Sahu brothers was that they have deposited the entire cash received from such sale in a bank account. As they have deposited the cash exceeding 10 lakhs INR in a single saving account. Because of such bulk deposit, bank official filed an annual information return u/s 285BA to the income tax department. Due to such filing of AIR, the transaction has been easily tracked by the department and in order to take such transaction under income tax assessment, the department issues a show-cause notice to assessee that why this transaction has not been reflected in their IT returns. Originally this income has been evaded by the assessee brothers, therefore A.O. has full access to issue income escaping notice to both assessees u/s 148 and completes the assessment as provided u/s 147. Moreover, A.O. can issue a notice under section 271DA for violating provisions of 269ST for levying 100% penalty or can issue a notice under section 271(1)(c) for concealment of income. Happy readings! Disclaimer: The information contained in this website is provided for informational purposes only, and should not be construed as legal/official advice on any matter. All the instructions, references, content, or documents are for educational purposes only and do not constitute legal advice. We do not accept any liabilities whatsoever for any losses caused directly or indirectly by the use/reliance of any information contained in this article or for any conclusion of the information. Share It . .

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Sukanya Samriddhi Account

December 12, 2018

The Central Govt. launched the ‘Sukanya Samriddhi Account’ programme in January 2015 with an objective to promote the welfare of girl child. It is a small deposit scheme for girl child which ensures their secure future and reduce their financial difficulties which they might have in future for their education or even for their marriage. It was also a plan which was toward the mission of ‘Beti Bachao, Beti Padao’ which was also launched on the same day. So, Let’s understand full details regarding it in very simple language: 1. Opening of Account: The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of 10 years. Also, any girl child, who has attained the age of 10 years, one year prior to the commencement of these rules, shall also be eligible for opening of the account under these rules. A Depositor (such guardian) may open only one account in the name of a girl child under these rules. Birth Certificate of such girl child AND Identity and residence proof of the depositor shall be submitted. Such guardian shall be allowed to open the account for two girl children only (except in cases when twin/three girl child is born together). It can be opened with Post-Offices and Notified banks as well. 2. Deposits: The account may be opened with an initial deposit of Rs. 1,000* and thereafter any amount in multiple of One hundred rupees may be deposited but the total amount deposited during the entire year shall not be less than Rs. 1,000 * and shall not exceeds Rs. 1,50,000 as well. The deposit in the account may be made through Cash, Cheque, or Demand Drafts. [* Now this limit of Rs. 1,000 has been reduced to Rs. 250/- only] Deposits can be made up to a maximum period of 14 years from the date of opening the account. After this period the account will only earn interest as per applicable rates. 3. Interest on Deposits: Interest at the rate, to be notified by the Govt., compounded yearly (the account holder may also opt for monthly interest) shall be credited to the account until the account completes 14 years. The current interest rate as on date is 8.5% per annum. 4. Operation of Account: The account shall be opened and operated by the natural or legal guardian of the girl child till the girl herself attains the age of 10 years. On attaining the age of 10 years, the girl child herself may operate the account. However, deposit in the account may be made by the guardian or any other person or authority. 5. Premature Closure of Account: In the event of Death of the account holder (i.e. the girl child), the account shall be closed immediately on the production of the Death Certificate and the balance remaining in the account shall be paid to the guardian with interest. Apart from this, Where the Central Govt. is satisfied that operation or continuation of the account is causing undue hardship to the account holder, the govt. may allow pre-mature closure of the account only in the case of extreme compassionate grounds such as medical support in life-threatening diseases, death etc. 6. Transfer of Account: The Account may be transferred anywhere in India if the girl child (i.e. the account holder) shifts to any other place other than the city or locality where account stands. 7. Withdrawal: For the higher education and marriage of such girl child, withdrawal up to 50% of the account balance at the end of preceding financial year shall be allowed. But, the withdrawal shall be allowed only when the account holder girl child attains the age of 18 years. 8. Closure on Maturity: The account shall mature on when the Girl child completes her 21 years but if her marriage takes place before being 21 years then it shall be deemed as mature. But the girl child has to furnish a declaration that she is not less than 18 years on the date of Closing the account. 9. Income tax benefit on Sukanya Samriddhi Account: The deposits made to the account, and also the proceeds and maturity amount are fully exempt from tax under section 80C of Income Tax Act. It is similar to PPF in respect of Tax Deductions. Share It . .

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Benami Transactions Act [Including Amendment, 2016] – Complete Overview

December 11, 2018

Recently, Govt. has introduced a law which has given a sudden jolt to the real estate sector. But the fact is, it is not only the real estate sector which would be affected by this law but it would have an impact on all types of properties be it movable or immovable. This law is called the Benami Transaction Act. Although, It is not a new act and it was originally created way back in 1988 but it was only the recent amendment brought in 2016 which has made a complete overhaul of this act and has made it really strong. But, of course, you might be thinking right now; what is it? How does it affect me? why should I concerned about it? Well, you’ll get to know all these things by the end of this article. So, Let’s analyze it in a very simple language and step by step:- 1. What is Benami Property? Benami literally means something “without a name”. Therefore, you could easily assume it that any property without a legal name and the valid owner is called Benami. It is a Property which is purchases/sold under a Benami Transaction and it also includes the money involved in such property. Property here means; assets of any kind, whether movable or immovable, tangible or intangible and it will include any right, interest, title to any property. 2. What is a Benami Transaction? Benami Transaction means; a transaction or an arrangement where: (A) A property is transferred to a person but the Consideration for such property has been given by another person. & Such property is held for the ultimate benefit of the person who has provided the consideration. (B) A Property has been taken in a fictitious name. [i.e. Purchased in Fake name] (C) A Property which has been taken in such manner that the owner (as per documents) of the property is not aware of such ownership. [i.e. Purchased in some unknown person name] (D) The Person giving the consideration for purchase is not traceable or is Fictitious. [i.e. Purchase money is coming from unknown sources] EXCEPTIONS: There are also some specific Exceptions to the general rule which means if Property has been taken in such manner then it will not be considered as Benami. These Exceptions would be in cases WHEN THE PROPERTY IS HELD BY: – A Karta/Member of HUF and the property is held for his own benefit or benefit of other members in the family and considerations for such property is coming from known sources of HUF. [Important Note- If a Member of HUF purchases property in the name of Another Member then that would not be taken as Exception.] – A Person standing in a fiduciary capacity (i.e. working on behalf of and benefit of other). If s/he is holding any property for the benefit toward whom he stands in such capacity then that would not be called as Benami. e.g. A share marketing company (say, Sharekhan) hold shares in the fiduciary capacity on behalf of their clients then that would not be considered as Benami. – Any Individual (buying property) in the name of his/her spouse or in the name of any child & consideration for such property is coming from the known sources of such individual. – Any Individual (buying property) in the name of Brother or Sister or lineal ascendant/ descendants, where the name of brother or sister or lineal ascendant/descendant AND the Individual appear AS JOINT-OWNERS in any document & consideration for such property is coming from the known sources of such individual. 3. Why People involved in Benami Transactions? It is generally used to enter into by the people who have unaccounted money; more commonly known as Black money. People make the Benami Transactions to hide their name and use the black money in various types of properties in such names which is either fake or which are not under the lenses of tax departments. Also, Another reason for entering the Benami Transactions is to hide the true ownership of the property from their lenders, creditors, and banks etc. 4. Who are the Parties involved in it? In any Benami Transaction the following parties are involved: (i) Benamidar: It is the person/fictitious person in whose name the property has been purchased. (ii) Beneficial Owner: It is the person who has provided the consideration for purchase. (iii) Seller: It is the person who is selling the property. 5. Which people would be affected by this Act? The people who have entered in any way transactions which are covered under Benami especially the one who has the Black Money and invested the same into Benami Transactions would be hugely affected by this act. They have to bear the Huge penalties and prosecutions under the Act. Also, the real estate sector would be certainly impacted with this and every party involved must be very clear about the true ownership of the property. People who have taken properties from their genuine sources and for their own direct benefit would not be affected by this law. 6. What are the Penalties & Prosecutions under the Act? The Act prescribes the different penalties and prosecutions for different defaults which are as follows: (i) Penalty for Benami Transactions: Where any person enters into a Benami Transaction the beneficial owner, benamidar and any other person who supports any person to enter into the benami transaction shall be guilty under the act and punishable with rigorous imprisonment for a term between 1 year to 7 years (+) shall also be liable to fine which may be extend up to 25% of the Market Value of the Property. (ii) Penalty for False Information: Any person who is required to furnish information under this Act knowingly gives false information to any authority or furnishes any false document in any proceeding under this Act, shall be punishable with rigorous imprisonment for a term between 6 months to 5 years (+) shall also be liable to fine which may extend up to

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