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FBR defines benami transactions

Updated March 20, 2019

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FBR shares information as govt begins enacting the Benami Transaction (Prohibition) Law. ─ AFP/File
FBR shares information as govt begins enacting the Benami Transaction (Prohibition) Law. ─ AFP/File

ISLAMABAD: The Fede­ral Board of Revenue (FBR) defines a benami property as one which is a subject matter of benami transaction and includes proceeds from such a property.

An official statement issued by the FBR Spokesperson Hamid Ateeq said that a benami transaction encompasses where a property is transferred to, or held by, a person and the consideration for such property has been provided, or paid by, another person (the trustees and wife, children, brother or sister to whom property has been transferred from known resources will be excluded).

Furthermore, a transaction or arrangement in respect of a property carried out or made in a fictitious name; or an arrangement in respect of a property where its owner is not aware of, or denies knowledge of such ownership; or a transaction in respect of a property where the person providing the consideration is not traceable or is fictitious.

The potential types of benami properties include plots, houses, shopping plazas, shops, housing schemes, bank accounts, vehicles, business shares, jewellery, foreign currency, legal documents and intangible properties having financial value.

Benami Transactions (Prohibition) Rules, 2019 have been enforced with immediate effect and broadening of tax base (BTB) zones of Inland Revenue Service has been assigned the duty to establish cases against Benami properties and submit challan to Adjudication Authority within 120 working days.

During this period, sale, purchase and transfer of property will be banned till further orders. Appeal against the decision of Adjudication Authority can be lodged with the Federal Tribunal and after its decision such properties will be confiscated and sold out by the federal government.

Furthermore, if the crime of benami transaction is proved, criminal proceedings will be initiated against accused persons and where proven guilty, rigorous imprisonment of one to seven years can be awarded. Similarly, persons providing false and baseless information can also be sentenced to rigorous imprisonment of six months to five years.

In this regard, whistleblowers will be entitled to a cash reward for providing credible information leading to the detection of benami property or transaction. If property is worth Rs2 million or less, five per cent of price of benami property will be given to the informer. If its worth is from Rs2-5m, 4pc of the property will be given to the informer and where the value of the property exceeds Rs5m, 3pc will be awarded to the whistleblower.

It is clarified that this reward will be given only if the information provided is of value and FBR doesn’t already have it; information was not available in public records and appeal against the confiscation of property has attained finality.

Published in Dawn, March 20th, 2019