Seeking legal advice for property matters has become imperative in the changing scenario in the country. India is euphoric on the wave of creating a clean and transparent environment to live in. One of the first steps that the world saw in this context was the Demonetisation process that was carried out in November 2016. In the last few months especially, the Modi government has promised to fight both corruption and black money and is eager to bring an end to benami transactions.
After the attempts to convert the country into a cashless digital economy, the government now seeks to attack the domain of illegal property transactions –specifically, ‘benami property.’ The latest Benami Transactions (Prohibition) Act of 2016 modifies the original Benami Transactions (Prohibition) Act of 1988 by closing loopholes and imposing stricter penalties including imprisonment up to seven years and fines of almost 25 percent of the market value of the property. The law also provides a complex web of appellate procedures, which, given India’s notoriously slow legal system, almost ensures that the property would not be marketable for some length of time.
“Benami” property transactions are basically those through which land or property is bought in somebody else’s name. These are most often used to find a safe avenue for black money. In a predominantly cash economy like India’s, benami deals are easy to transact and hence very attractive.
There are issues that keep emerging in the context of the description of what could or could not be termed as ‘benami.’ There can be endless debates about these small definition ambiguities but it still doesn’t take away the fact that there is a wave of “clean India” that is going to determine how documents are viewed, assessed and scrutinized.
While the Benami Act does provide for exceptions like the one described above, the point is that it is best to get expert legal advice to ensure that one does not get snared by the law. This is especially important for NRI’s many of whom have legal transactions which are benami in nature and were done simply to beat the excessive regulations and paperwork required to buy property in India.
NRI’s, especially those with OCI (Overseas Citizen of India) or PIO (Person of Indian Origin) cards can be particularly vulnerable when it comes to agricultural land. The Reserve Bank of India permits an NRI, an OCI or a PIO to buy residential and commercial property in India, as we already know. But they are not allowed to purchase agricultural land, plantation land or a farm house in India. They are not even authorized to acquire such property as a gift but can hold such immovable property if acquired by way of inheritance.
The laws and their application can get onerous, and it is best to get the advice of a good NRI legal adviser soon and not to procrastinate. When it comes to legal property matters, things almost never get easier with time. In the meanwhile, it is advised that NRI’s get their paperwork in order, or get help to do so.
It is in your interest that you keep a close check on the documents that are required for your property to stay safe and you not to have any hassle of being subject to scrutiny. Hence, getting the required transfer, mutation, partition, etc. done should be of prime importance. The Benami Act and all other measures being taken in India signal the beginning of a new era for Indian real estate and in the long run, may result in creating institutions that improve transparency and reduce cumbersome paperwork in real estate transactions. In the meantime, NRI’s are advised to get their documentation in order and seek professional legal advice from a competent legal services expert capable of handling NRI property issues.
NRI Legal Services is a company that has been resolving NRI property issues for almost the past two decades. Given the nature of the work we do, we try and bring a refreshed approach every now and then so that our clients gain the maximum in terms of interaction. It is our effort to be easily accessible and approachable for solutions.
On these lines, we have launched not only a web application but are also on our way towards launching FB Live – our determination to reach out to NRIs in a more intensive manner. Now it is easy to access our legal team for all kinds of advice on property matters. In addition, you can contact us anytime, even while on the move and get details about your rights as an NRI and all information related to Transfer of property, making of a Will and getting Property documents in order. These have assumed greater importance now since the government has decided to target all benami property in the coming months. Convenient communication helps us resolve the legal matters in a better manner and spread our presence over a wider range of NRIs.