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 . .

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 . .

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