Benami transactions involve buying property in someone else’s name, typically to hide real ownership or evade taxes. These transactions have been a long-standing method for money laundering and tax evasion in Pakistan. However, with the introduction of the Benami Transactions (Prohibition) Act, 2017, the law has become stricter.
What Qualifies as Benami?
- Property held in someone else’s name, but funded by another
- Owner unaware or denies knowledge of ownership
- Transaction made to conceal illegal wealth
Legal Consequences
The Federal Board of Revenue (FBR) has authority to investigate and seize such properties. Offenders face:
- Up to 7 years of imprisonment
- Heavy fines (25% of market value)
FBR has already taken action in high-profile cases, proving the government’s commitment to tackling corruption in real estate.
Exceptions
Spouses, children, or dependents can hold property on someone’s behalf if the source of funds is declared and transparent.
Importance of Legal Advice
To avoid getting caught up in illegal transactions, buyers should always conduct proper due diligence and consult a property lawyer before finalizing any deal.
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