Tag: Benami Law

In a significant move to combat Benami transactions, the Federal Board of Revenue (FBR) has announced the establishment of three dedicated zones in major cities across the country.

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ISLAMABAD: Federal Board of Revenue (FBR) has assigned Broadening of Tax Base (BTB) Zones to initiate cases against Benami properties and directed to submit challan within 120 days.

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

After Implementation of Benami Transactions (Prohibition) Rules, 2019.The Federal Board of Revenue (FBR) has clarified that a Benami property means any property which is subject matter of Benami transaction and also includes proceeds from such property.

Benami transaction encompasses where a property is transferred to, or is 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);

A transaction or arrangement in respect of a property carried out or made in a fictitious name; or a transaction or arrangement in respect of a property where the owner of the property is not aware of, or denies knowledge of, such ownership; or a transaction or arrangement 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.

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 the decision of the Federal Tribunal such properties will be confiscated and sold out by the federal government.

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

In this regard, the whistleblowers will be entitled to a cash reward for providing credible information leading to detection of Benami property or transaction. If property is worth Rs.2,000,000 or less, five percent of price of Benami property will be given to informer.

If property’s worth is more than Rs.2,000,000 or 5,000,000, four percent of Benami property will be given to informer and where the value of property will be more than Rs.5,000,000, three percent of Benami property will be given to informer.

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

ISLAMABAD: Federal Board of Revenue (FBR) on Monday announced reward for whistleblowers for helping tax authorities in detection and confiscation of benami properties.

The FBR issued SRO 326(I)/2019 to notify rules calling Benami Transactions (Prohibition) Rules, 2019 in order to implement the benami law, which was passed in February 2017.

The FBR said that for the purpose of reward, the provisions of the Inland Revenue Reward Rules, 2016 except as specified in these rules shall mutatis mutandis apply.

Following are the rewards for the whistleblowers:

01. Benami property value Rs2,000,000 or les. The amount of reward shall be five percent of the price of benami property.

02. Benami property value more than Rs2,000,000 but not more than Rs5,000,000. The amount of reward shall be Rs100,000 plus four percent of the price of benami property in excess of Rs2,000,000.

03. Benami property value over Rs5,000,000. The amount of award shall be Rs220,000 plus three percent of the price of benami property in excess of Rs5,000,000.

Under the rules the FBR has been empowered to provisionally attach benami property or confiscate it.

The benami law was passed by the national assembly two years back with aim to bring those persons into tax net, who had concealed their undisclosed assets in the name of others.