Report No. 57

5.13. Question of evasion of tax considered.-

As regards evasion of tax by benami transactions, the position is briefly this

(i) Where the real owner of the property is the husband or father and the benamidar is his wife or minor child (other than a married daughter), the general1 provision as to income from assets transferred directly or indirectly without adequate consideration by the husband or father would appear to be adequate for all practical purposes.

(ii) Where the real owner is not the husband or father, the provision recently inserted in the Income-tax Act2 has the effect of securing that the benami transaction is disclosed to the Income-tax authorities. There does not, therefore, appear to be any serious gap so as to require further radical measures for checking evasion of direct taxes resulting from benami transactions.

1. Section 64, Income-tax Act, 1961.

2. Section 281A, Income-tax Act, 1961.