New Benami Law And Income Tax Act, 1961
- Blog|Income Tax|
- 844 Views
- 2 Min Read
- By Taxmann
- Last Updated on 3 May, 2021
- If any person is found to be the owner of any money, bullion, jewellery or other valuable article and same is not recorded in any books of account of the person and the source of acquisition is not satisfactorily explained, the money and value of bullion, jewellery or another valuable article shall be taxed as his income for such financial year at a flat rate of 78% without allowing any deduction or threshold exemption. This will be the case if the amount of such income is voluntarily disclosed by the person in his ITR and 78% tax is paid on or before 31st March of the relevant financial year.
- If such income is not voluntarily disclosed and/or tax thereon not paid as aforesaid, the same shall additionally attract a penalty of 10% if detection is otherwise than during search by IT Department. If detection is during the search, the penalty will be 30% or 60% depending on whether the person co-operates with IT Department or not.
- Owner here means the real owner and obviously cannot mean the benamidar.
- If the Income-tax Department finds the ostensible on record owner is only a benamidar and the real owner is someone else, then the above provisions can’t be applied to tax the money, bullion, etc., in the hands of the ostensible owner. Instead, the matter would be proceeded for under the Benami Act and the amount would be confiscated and the benamidar and the real owner would both be prosecuted under the Benami Act.
- It may be noted that benamidar can’t preclude enquiry into the benami aspect by voluntarily declaring the amount in his ITR.
- Thus, in all income-tax matters, while dealing with any unexplained money, bullion, jewellery or another valuable article, the Assessing Officer will also examine the Benami angle.
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