Budget 2024: Changes In Benami Act, New Time Limits

What Are The Changes Introduced By Union Budget 2024?

The various time limits for replying to Notices issued to a ‘benamdar’ or someone who has allegedly been involved in a benami transaction are given under Section 24. The Finance Minister of India, Nirmala Sitharaman in her budget presentation proposed changes to Section 24 of this Act.

Let us have a look at what the Benami transactions' latest changes include!

Benami In Terms Of Property

Section 24 (1) of the Benami Act says that, If an initiating officer has enough reasons to believe that a person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show within the time limit to prove why such property should not be treated as a benami property.

Punishment Under The Benami Act

Section 24(2) of the Benami Act says that a copy of such notice should also be sent to the beneficiary owner along with the benamidar if the beneficiary’s identity is known. A new Section 2A is being inserted in the Act to propose a time limit not exceeding 3 months for filing a reply to the notice.

An initiating officer may provide less time to furnish a notice and may provide an extension in case of a delay, however, such an extension shall never cross 3 months. Previously, no such limit existed which caused a long pendency of benami cases.

As per Section 24(3) of the Benami Act, initiating officers may provisionally attach the property with the previous approval of the approving authority in a manner as prescribed. This may be done if the officer thinks that the property held benami may be alienated during the period specified in the notice, The property may be provisionally attached, within a period not exceeding ninety days from the last day of the month where the notice was issued.

Extended Time

Union Budget 2024 proposes to extend this time limit of ninety days to four months. Section 24(4) of the Benami Act says if a provisional attachment of property was made under section 24(3), the initiating officer shall pass an order either continuing or revoking the provisional attachment within a period not exceeding ninety days. The new budget proposes to extend this time limit to four months.

Section 24(5) of the Benami Act provides that, if the initiating officer passes an order continuing the provisional attachment, he shall draw up a statement of the case and refer it to the adjudicating authority within fifteen days from the date of attachment. To facilitate working, the Budget 2024 seeks to extend it to 1 month.