MUMBAI: Till now, all that mattered to the taxman was the source of money. As long as the amount was declared in the tax return, no questions were asked. The law against ‘benami’ deals has radically altered that settled belief.It’s a dramatic change that affluent India is yet to come to terms with. To many, the attachment of SRK’s Alibaug bungalow by Income-Tax authorities has come as a rude wakeup call.The action has sparked off fears and brought to the fore far reaching implications of the Benami Transactions (Prohibition) Amendment Act which came into effect from November 1, 2016, after amending a 28-year-old law. What kind of deals can break the law? Innocuous, unsuspecting transactions like funding your brother, or sister, or parents to acquire assets. 62730160 Sharp, unethical deals like funding someone (a front) who ‘owns’ farmland on your behalf for your holding to remain within the permissible holding limit; side-stepping Sebi’s takeover code by owning shares through another party whom you bankroll; or, buying an apartment for the other woman by lending her the money.A slew of such deals may be stamped as benami transactions – even when they are carried out through the banking channels with tax-paid money.The litmus test for the tax office is simple: the official owner – on whose name a property, land, or any asset is registered – must also be the real owner. If it is not, the tax office can invoke the new law to confiscate the property, demand a penalty equivalent to a quarter of the market value of the asset, and even put the offenders – the real owner as well as the front or ‘benamidar’ – behind bars.WHERE WILL IT HURT?A person booking a property in the name of her father – by either giving him a loan or directly paying the builder – can find her on the wrong side of the law if tax officials are convinced that her father does not use the property.Properties booked in name of spouse or children would not be a violation, but assets registered in the name of parents or siblings who are neither using the property nor have the money to buy it could be construed as benami.The only way to escape the glare in such cases is to hold the property jointly with your parents, bothers, or sisters.In the typical Indian lexicon, benami assets were so far described as those which have been clandestinely funded – using cash, through unofficial or circuitous routes – to obfuscate the real ownership. Not many have sensed how the new law has broadened the scope.”It can have wide repercussions-…The person owning a property should be the real beneficial owner who is using, enjoying, exploiting, and encashing the beneficial rights. For instance if the beneficial owner collects the rent or pays the society charge, then the official owner will be treated as a benami or front. The law would then set in,” said senior chartered accountant Dilip Lakhani.Person who strikes benami transactions to defeat the provisions of any other law would also be held guilty. In Maharashtra, the tax department is looking into cases where people have used fronts to acquire agricultural land in excess of 54 acres, the maximum farm land an individual can hold.Even large cash deposits with banks (rampant post demonetisation) could come under the lens of benami deal prohibition law: if the account holder, in the course of a long interrogation, admits that the money lying in his account belong to someone else, I-T officials will have sufficient grounds to slap the harsh law.But practitioners are already sensing its darker side. “It’s an unprecedented law, a misguided missile unwittingly created by the government,” said Ashwani Taneja, former member of the Mumbai bench of the Income Tax Appellate Tribunal. “There is no time limit for taking action. The department is penalising property purchases that are more than 20 years old when the law was incomplete,” said Taneja, who currently practices as a lawyer.Not too many may empathise with a Bollywood star who surreptitiously extends a loan, field relatives on the board of a company holding agricultural land, to take control over farm land which otherwise he couldn’t have probably purchased directly. The fear is the law could be used to question deals where the intent was not to launder money or evade tax.