Benami Transaction

Also known as: benami property

A benami transaction is one where property is held in one person's name but paid for by, and held for the benefit of, another - prohibited in India, with the property liable to confiscation.

The Prohibition of Benami Property Transactions Act permits confiscation without compensation, and the prohibition binds subsequent purchasers of confiscated property. Indicators that warrant closer examination include a recorded owner with no apparent means to fund the acquisition, consideration paid from unrelated third-party accounts, and property held by a dormant entity.