In India, it is common for people to buy, register, or hold property in someone else’s name. This may happen within families, with business partners, or due to convenience. Benami Law deals with properties or assets that are bought in someone else’s name, but the real money and real ownership belong to another person. This is usually done to hide wealth, avoid taxes, or keep assets secret. To stop such practices, the government introduced the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act), which makes such “benami” transactions illegal.

A benami transaction is one where a property is held by one person (benamidar), but the consideration is paid by another (beneficial owner), and the property is held for the benefit of that other person. It also covers transactions carried out in a fictitious name, or where the owner is unaware, or denies knowledge of ownership, in simple terms, it covers properties bought in fake names or where the person in whose name the property stands denies ownership. The law defines “benami property” to include any asset—movable, immovable, tangible, intangible, proceeds from such property, or any right or interest in it.

The law provides for provisional attachment (up to 90 days initially), followed by adjudication. If declared benami, the property may be confiscated, and all rights of the benamidar or beneficial owner extinguished. Though the authorities initiate proceedings, evidentiary burden substantially lies on the alleged owner to establish genuine ownership, source of funds, and bona fide nature of the transaction. The statute seeks to promote transparency, curb concealment of illicit assets, prevent abuse of layering through name-lenders, and strengthen the State’s ability to combat black money, tax evasion, and fraudulent ownership structures.