What is the meaning of Benami property?

Ans. The term “Property" is defined in​ Section 2(26) of the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) as under:

a. “Property" means assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal;

b. It includes any right or interest or legal documents or instruments evidencing title to or inter­est in the property;

c. It also includes the converted form of any property where such property is capable of conversion into some other form;

d. It also includes the proceeds from the property.

Therefore, all forms of assets come under the definition of “property", bringing into its scope real estate, shares, vehicles, fixed deposits, bank deposits, Bank lockers, private lockers, etc.

The scope of the term “Benami Property" as defined in ​ Section 2(8) of the PBPT Act covers:

• any property which is the subject matter of a Benami transaction; and
• proceeds from such property.

Benami properties are those that an owner holds through proxies. The property is purchased in the name of or held in the name of a person who neither paid for it nor actually enjoys it. It may even be held in the name of a non-existent person. Such a front person is known as 'Benamidar'. This name is only an alias for the actual owner, the 'Beneficial Owner'. Thus, the Benami property transaction is where the 'Beneficial Owner' buys the property in the name of a Benamidar but seeks to enjoy it himself.