A Benami Property is one that’s purchased in someone else’s name, but the real owner is another person who paid for it. It’s often used to hide black money or evade taxes—and it’s illegal under Indian law.
What Is a Benami Property?
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Property bought in the name of a proxy (Benamidar)
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The real buyer (Beneficial Owner) hides behind this name
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Common in cases of tax evasion, money laundering, or asset concealment
Legal Risks:
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Property can be seized by the government without compensation
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Criminal penalties: Up to 7 years imprisonment + heavy fines
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No legal claim: Even the real owner can’t recover it through court
How to Identify & Avoid:
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Always verify the source of funds used for the purchase
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Ensure the buyer and owner are the same person
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Avoid cash transactions or deals involving third-party names
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Conduct a title search and consult a real estate lawyer
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Check for clear documentation: Sale deed, EC, mutation, tax receipts
