A new Benami bill, aimed at curbing generation of domestic black money, will soon be brought before the Cabinet, government told the Lok Sabha on Monday.
“As regards the Benami Bill, the redrafted Act is at a very advanced stage... A more modern Benami bill has been drafted. It will reach the Cabinet any day,” Finance Minister Arun Jaitley said.
Apart from confiscation, the Bill would provide for prosecution and would aim to act as a major avenue for blocking generation and holding of black money in the form of benami property, especially in real estate.
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Mr. Jaitley said the inclusion of the parallel economy of black money into the main economy, would help government to lower tax rates.
“The need to curb domestic black money is extremely important. We need to bring slowly more and more of our economy into declared economy. This has ability to bring up tax collection, GDP, enables to help the government to bring down the taxation.
“If parallel black money comes into the economy, then the taxes go down,” Mr. Jaitley said.
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The government had in Budget 2015-16, presented at the end of February, announced that it would come out with a new and more comprehensive Benami Transactions (Prohibition) Bill.
The Benami Transactions (Prohibition) Act was earlier enacted in 1988, but the rules under that Act could not be formulated due to inherent infirmities in the Act.
Following this, in 2011 the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.
The Bill was referred to the Standing Committee on Finance for examination, which submitted its report in June 2012. However, the Bill lapsed with the dissolution of 15th Lok Sabha.