Question

What is the meaning of the term Benami?

• A. Transactions made in the name of a fictitious or relatively insignificant person, whereas the real beneficiary remains unnamed.
• B. In the name of a person called 'Benam'.
• C. Transaction is done by and in the name of the real owner.
• D. The special transactions where the real beneficiary remains traceable and accountable.

Hint:

Break down the word: "Be" (without) + "nam" (name) = "without a name" or "nameless". This helps you remember that the key feature of a benami transaction is that the real owner's name is not on the official documents.

Answer 1

The Correct Option is A

Step 1: Conceptual Understanding:
The query seeks the definition of 'Benami', a term prevalent in Indian finance and law. The word's literal Persian origin translates to "without a name".

Step 2: Detailed Elaboration:

A 'Benami' transaction involves a property transfer where one individual provides the consideration (payment), while another individual holds the property. The property is maintained for the present or future benefit of the payer. The person named in the transaction is the 'benamidar', acting as a front for the actual owner.
Option (1) correctly defines this, describing a transaction using a proxy (a fictitious or minor individual) while the true owner/beneficiary remains concealed.
Option (2) offers a basic, incorrect literal translation.
Option (3) describes a standard, lawful transaction, contrary to the concept of benami.
Option (4) also contradicts a benami transaction, as it focuses on making the real beneficiary untraceable.

Step 3: Conclusion:
A Benami transaction is accurately defined as one conducted in a proxy's name, concealing the true beneficiary.