Santosh Kumar
Asked February 08, 2017

Legal issues: "Benami property"

  • 1 Answer

Dear Sir, I'm Santosh Kumar ,I am working in Japan from last three years. Last week, I bought 2000 Sq ft plot and registered in the name of my father because of my overseas contract. That property was registered in Registrar Office in the presence of landlord and other two witnesses . Whereas all payments to landlord was done by me from my account by using net banking. Just two days before my friend told me about Benami Property Act 2016.So that now I am worried about my property . Sir , Please make me clear about these three things : 1. As per Benami Property Act 2016 ,my registration in name of my father is valid or not ? If not then how to solve this issue ? 2. That property can transferred into my name after 4 or 5 months ? 3. How much the fees for registration ? Thank you very much. Waiting for your reply. Regards Santosh Kumar

Answer 1

Benami in Hindi means without name. So, a property bought by an individual not under his or her name is benami property. It can include property held in the name of spouse or child for which the amount is paid out of known sources of income. The person on whose name the property is purhcased is called benamdar. The benami transactions include buying assets of any kind — movable, immovable, tangible, intangible, any right or interest, or legal documents.


Benami Transactions (Prohibition) Amendment Act, 2016 came into force on November 1, 2016. The PBPT Act defines benami transactions, prohibits them and further provides that violation of the PBPT Act is punishable with imprisonment and fine. The PBPT Act prohibits recovery of the property held benami from benamidar by the real owner. Properties held benami are liable for confiscation by the Government without payment of compensation.


Under the Current Act a benami transaction, is defined as a transaction where in a property is held by or transferred to a person, but has been provided or paid by another person. The definition also includes property transactions where-

  • a transaction been made under a fictitious name
  •  the owner is not aware or denies knowledge of the ownership of the property
  •  the person providing the property is not traceable.

    The following transactions are not considered benami-

  • Property held under the name of spouse or child, for which the amount is being paid through a known source of income.
  • A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income.
  • Property held by someone in a fiduciary capacity; that is, transaction involving a trustee and a beneficiary.

    Thus answering your questions in a hierarchical way-


  • Yes, it is a benami property. You are advised to transfer the property in your name, though not in entirety- you can hold the property jointly with your father or create a trust for the same with your father acting as the beneficiary.
  • It is likely that by transferring the property in your name, you might attract legal troubles and suspicion. Since you claim that the entire process of having the property brought in your father’s name was due to you being unaware of the laws, you are advised to do either of the following-
    • Portray it as a gift deed to your father by taking help of a lawyer
    • Change the status of the property from being a sole proprietorship of your father to a jointly held property or a trust held property- with your father as the intended beneficiary
    Agree Comment 0 Agrees over 4 years ago

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