The government has announced a scheme for informants of benami transactions…

Concept

A benami transaction is a deal in which property is held in the name of one person but is actually paid for or owned by another, so the real beneficiary is hidden. To encourage citizens to report such hidden ownership, the tax administration runs dedicated informant reward schemes that promise a cash reward, capped at a fixed maximum amount, for specific and verifiable information.

Application

The relevant scheme here is the Benami Transactions Informants Reward Scheme, 2018, notified by the CBDT (Income Tax Department) in June 2018. Under this scheme an informant who supplies specific information about benami property or transactions can be granted a reward of up to Rs. 1 crore.

Cross-check / Contrast

Distinguish this from the separate income-tax informant scheme notified at the same time:

• Reward up to Rs. 1 crore — for information on benami transactions/property (the scheme asked about here).

• Reward up to Rs. 5 crore — for information on undisclosed foreign income and assets, a different scheme. Mixing the two caps is the common trap.

Hence the maximum reward under the benami informants scheme is Rs. 1 crore.