India: Benami Transactions (Prohibition) Amendment Act, 2016 (New Legislations: October 2016 - December 2016)


Benami Transactions (Prohibition) Amendment Act, 2016

The Benami Transactions (Prohibition) Amendment Act, 2016 ("Amendment Act") came into force with effect from November 01, 2016. The Amendment Act seeks to amend the provisions of the Benami Transactions (Prohibition) Act, 1988 ("Principal Act") to curb the issues of black money and money laundering in the country.

The Amendment Act:

  1. has renamed the Principal Act as Prohibition of Benami Property Transactions Act, 1988 ("New Act");
  2. has tried to give a comprehensive definition of benami transactions clearly setting out the transactions to be excluded from the definition;
  3. provides for establishment of adjudicating authorities; setting up of appellate tribunal and power of Central Government to designate one or more Courts of Session as Special Courts for speedy and smooth trial of offences punishable under the New Act; and
  4. provides for attachment, adjudication, confiscation and vesting of benami property and has prescribed penalties and punishments in respect of the offences punishable under the New Act.

Rights of Persons with Disabilities Act, 2016

India was one of the first countries to sign and ratify the UN Convention on the Rights of Persons with Disabilities ("Convention").

Pursuant to its commitments under the said Convention, the government has come up with the Rights of Persons with Disabilities Act, 2016 ("Disability Law") which has replaced the two decade old Persons with Disability Act, 1995. The Disability Law received the assent of the President on December 27, 2016.

Highlights of the Disability Law:

  1. The new legislation provides an exhaustive list of 21 disabilities as against 7 under the old law;
  2. Responsibility has been cast upon the appropriate government to protect the persons with disability from cruelty, inhuman treatment, abuse, violence and exploitation and ensure their safety and provide access to justice and an environment for enjoyment of legal capacity on an equal basis;
  3. Government funded educational institutions have been entrusted with the responsibility of providing inclusive education to the children with disabilities;
  4. Measures have been taken to facilitate and support employment of persons with disabilities by providing them vocational training and self-employment opportunities and formulating policies that encourage non-discrimination in employment;
  5. The appropriate government has been entrusted to take measures for security social security, health, rehabilitation and recreation facilities to the persons with disabilities;
  6. Every child with benchmark disability between the age group of 6 to 18 years will have access to free education;
  7. Reservation for persons with benchmark disabilities in higher educational institutions and vacancies in government establishments;
  8. Appropriate government to conduct and promote awareness campaigns and sensitization programmes;
  9. Constitution of a Central Advisory Board/State Advisory Boards on Disability to formulate a policy for the empowerment of persons with disabilities and the full enjoyment of rights; and
  10. Constitution of a National Fund for persons with disabilities and a State Fund for persons with disabilities.

Repealing and Amendment Act, 2016

The present government has been instrumental in identifying and weeding out the redundant laws from the statute books and had even approved the constitution of a committee to carry out a review to identify obsolete laws.

The Repealing and Amendment Act, 2016 was introduced in pursuance of the government's objective to eliminate obsolete legislations for efficient governance. At the 2015 Economic Times Global Business Summit, Prime Minister Narendra Modi had stated that, "Our country suffers from an excess of old and unnecessary laws which obstruct people and businesses. We began the exercise of identifying unnecessary laws and repealing them. 1,877 Central laws have been identified for repeal."

In addition to repealing the obsolete laws, the Repealing and Amendment Act, 2016 has brought about minor changes in the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013, and the Governors (Emoluments, Allowances and Privileges) Amendment Act, 2014.

Indian Trusts (Amendment) Act, 2016

The Indian Trusts (Amendment) Act, 2016 ("Trusts Amendment Act") received the assent of the President on July 26, 2016. The Trusts Amendment Act has amended the Indian Trusts Act, 1882 ("Old Act") by substituting Section 20 of the Old Act, which lists out the securities wherein the trust money can be invested by the trustee, with the new Section 20 which provides that the trust money should be invested in the securities authorized by the instrument of trust or as notified by the Central Government.

The Trusts Amendment Act has further omitted the proviso to Section 20A of the Old Act which provides exceptions to the general rule that the trustee may invest in redeemable securities whose price exceeds its redemption value.

Taxation Laws (Second Amendment) Act, 2016

Taxation Laws (Second Amendment) Act, 2016 seeks to amend the Income Tax Act, 1961 and the Finance Act, 2016.

Amendments in the Income Tax Act, 1961:

Section 115BBE:

The rate of tax on the income u/s 68, 69A, 69B, 69C and 69D of the Income Tax Act, 1961 and disclosed by the assessee or determined by the assessing officer, as the case may be, has been increased from 30% to 60%.

Section 271AAB:

In sub section 1, the assessing officer may direct the assessee to pay penalties at specified rates, in case the search has been initiated under Section 132 on or after July 01, 2012, but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President.

Further, a new sub-section (1A) has been inserted which provides the penalty provisions in case the search has been initiated under Section 132 on or after the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President.

In clause (2), the undisclosed income shall refer to the undisclosed income referred to in sub-section (1) or the new sub section (1A).

Section 271AAC:

Section 271AAC, which provides for imposition of penalties on determination of income referred to in Section 68, 69A, 69B, 69C and 69D of the Income Tax Act, 1961, has been inserted after Section 271AAB and the said Section will have effect from April 01, 2017.

Amendments in the Finance Act, 2016:

Section 2:

In third proviso to sub section (9), the words and figures 115BBE shall be omitted; and

After the sixth proviso to sub section (9), a seventh proviso has been inserted for computation of surcharge on the advance tax payable by the assessee.

Insertion of Chapter IX-A

Further, the Taxation Laws (Second Amendment) Act, 2016 has introduced a new chapter i.e. Chapter IXA - Pradhan Mantri Garib Kalyan Yojana, 2016 ("Scheme").

The Scheme provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity (which includes banks, post office etc.) to declare such income and pay tax at the rate of 30% of the undisclosed income, surcharge at the rate of 33% on the amount of tax and a penalty at the rate of 10% of the undisclosed income.

The amount of undisclosed income declared under the Scheme will not be included in the total income of the declarant for any assessment year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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