Allowed others' black money deposits in your account? I-T dept to attach property under new benami law

Mumbai: If you allowed others to use your bank account to park others' black money to escape the brunt of demonetisation, you may be in for trouble.

According to The Indian Express, the income tax department has confiscated and attached property of about 20 individuals and entities in Mumbai whose bank accounts were allegedly used by owners of small and medium firms to deposit unaccounted money following the demonetisation announcement on November 8.

The paper added that the tax department has taken recourse to the new law on benami property, which allows the tax agency to confiscate and prosecute depositors and those whose illegal money has been “adjusted” in the depositors’ accounts. Violation of rules of the Act attracts a heavy penalty and rigorous jail term of a maximum of seven years.

The tax department issued show-cause notices on January 27 to these individuals and entities for attachment of properties under the Benami Transactions (Prohibition) Amendment Act, which came into force on November 1, 2016, sources told The Indian Express.

Following the demonetisation of high-value notes, Prime Minister Modi, Finance Ministry officials had warned people not to allow black money hoarders to use  their accounts to stash illegal cash.

The tax department had even issued advertisements warning warned people against depositing their unaccounted old currency in others’ bank accounts. It warned that such an act would attract criminal charges under the newly enforced norms, applicable on both movable and immovable property.