Benami transactions, deeply entrenched in India's history and modern economic offenses, have raised longstanding concerns. The term "Benami" translating to "without name" or "no name", encapsulates transactions where property is held in one person's name, concealing the actual owner who provides the consideration. In India, as a practice, there is a long-drawn history of people buying and holding property in someone else's name, even though there is no intention to benefit the person in whose name the transaction is made. This type of transaction has been judicially referred to as Benami transaction as the real title is divorced from the ostensible title and they are vested in different persons.

While mainly these benami transactions are done for immovable assets like land and building but it can also be done for movable assets like cash, shares, bonds, etc. Shares of companies are often purchased or applied for and allotted in the names of persons other than the real owner who furnishes the consideration. The people put the name of their wife and children to get exemption from tax and finally converting into black money. The individuals as well as corporates were using opaque structures to build huge land banks as well as to outfits in states where locals have been used as fronts to buy properties to circumvent state laws. As tax rates kept heading north and new taxes (wealth tax, gift tax) were introduced, benami transactions increased. It also became a route for big-ticket bribes. Benami property was also used to dodge creditors and reduce personal liability.

The Benami Transactions (Prohibition) Act, 1988 (“BTPA”) came into existence due to the above referred factors. BTPA didn't have any system or procedure of seizure/obtaining of the benami property and along these lines, no benami property could be procured by the administration. The Benami Transactions (Prohibition) Amendment Act, 2016 is an extensive law which has enlarged the ambit of benami transactions and is a landmark legislation aimed at combating the widespread practice of benami transactions Although the 1988 Act was a step towards criminalizing benami transactions, it lacked enforcement clarity and punitive measures. The 2016 Amendment Act overhauled the legal landscape by expanding definitions, introducing stringent penalties, and empowering regulatory authorities with enhanced confiscation powers.

This research paper focuses on analysing how benami transactions exploit systemic gaps in verification, legal enforcement and technological inclusion, and proposes a sustainable & innovative tech-legal framework to detect, deter and dismantle such practices. The objectives include:

1. To examine the evolution of Benami law and assess how the 2016 amendment transformed enforcement from a reactive to a proactive model.
2. To propose and evaluate the role of sustainable innovations—including AI, blockchain, GIS, and financial forensics—as long-term solutions in curbing benami practices.
3. To validate, through structured field surveys and Chi-Square testing, that the preference for tech-driven anti-benami enforcement significantly outweighs support for traditional awareness programs.
4. To recommend a scalable, institutionalized tech-legal enforcement framework that integrates inter-agency coordination, public participation, and AI-based monitoring.
5. To position anti-benami enforcement within the broader sustainability framework by demonstrating its alignment with SDG 16 (Peace, Justice & Strong Institutions), environmental goals, and governance reform.

Benami Law: The Evolution of Jurisprudence

The early provisions in the Code of Civil Procedure and Income Tax Act, 1961 failed to effectively curb benami transactions. In 1969, a parliamentary committee recommended a ban and in 1972, the Law Commission of India suggested enacting a separate law. This led to the Benami Transactions (Prohibition) Act, 1988, which prohibited benami transactions and allowed the government to confiscate benami properties. However, due to unclear enforcement procedures and the absence of regulatory authorities, the Act remained highly ineffective. The 2011 Benami Transactions Bill lapsed, prompting the 2015 Amendment Bill, which led to the Benami Transactions (Prohibition) Amendment Act, 2016, notified on 1^st November 2016. The Act was renamed Prohibition of Benami Property Transactions Act (PBPTA), 1988 and it expanded the definition of benami transactions to include both tangible and intangible assets. It introduced stricter penalties, adjudication procedures and property attachment provisions. Benami Property Units (BPUs) were established for investigation and enforcement. The amendment also criminalized benami transactions, leading to increased scrutiny and property seizures. The 2016 Act significantly improved enforcement, transparency and deterrence, making it a game-changer in tackling benami transactions in the country.

Key provisions & legal framework

PBPTA is a crucial legislation in India aimed at curbing the practice of benami transactions. An analysis of its pivotal provisions and the underlying legal framework is given below:

• Benami transaction [Section 2 (9) of PBPTA]

1. a transaction or an arrangement--
2. where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and
3. the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by--
4. a Karta, or a member of a HUF, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of HUF;
5. a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company and any other person as may be notified by the Central Government for this purpose;
6. any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual;
7. any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or

1. a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or
2. a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership;
3. a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious;

• Property [Section 2(26) of PBPTA] – Property means asset of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and included any right or interest of legal documents or instruments evidencing title to or interest in the property and where the property is capable of conversion into some other form, then the property in the converted form and also includes the proceeds from the property.

• Section 3(1) of PBPTA: No person shall enter into any benami transaction.

Recent Government actions on Benami Law

Strengthening the enforcement mechanism

To effectively combat benami transactions, the government has adopted a three-pronged strategy focusing on legislative improvements institutional enforcement and public participation. These measures aim to detect, investigate and prosecute benami property holders and benamidars while enhancing transparency in financial transactions.

• Enhancing the Legislative Framework

The government has continuously strengthened the legal provisions under the Prohibition of Benami Property Transactions Act, 1988, which was significantly amended in 2016 to close existing loopholes.

• Establishing Benami Property Units (BPUs)

Recognizing the need for a specialized investigative framework, the government set up 24 dedicated Benami Property Units (BPUs) under the Income Tax Department’s Investigation Wing. These units are strategically located across India and play a crucial role in detecting and investigating suspicious transactions.

• Encouraging Public Participation & Whistle-blower Incentives

To further strengthen enforcement, the government has actively encouraged public participation through whistle-blower incentives and online complaint mechanisms. The Benami Transactions Informants Reward Scheme,2018 offers cash rewards up to ₹1 crore while ensuring whistle-blower confidentiality. The CBDT’s e-filing portal allows anonymous or verified complaints on benami properties, tax evasion, and undisclosed foreign assets, with a tracking system for updates.

Sustainability in financial governance is not limited to environmental concerns but includes the creation of ethical, transparent and efficient institutions. Anti-benami enforcement contributes to Sustainable Development Goals (SDG) 16: "Peace, Justice and Strong Institutions." Sustainable enforcement of financial laws, such as the Prohibition of Benami Property Transactions Act, 1988, requires systems that are not only legally sound but also scalable, adaptable, and technologically robust.

Tech-Driven Innovative Tools in Anti-Benami Enforcement:

1. Artificial Intelligence and Machine Learning (AI/ML):

Artificial Intelligence (AI) and Machine Learning (ML) can play a transformative role in combating benami transactions, which are often used for tax evasion, money laundering and fraudulent asset diversion. AI and ML algorithms can detect discrepancies in asset ownership data or unusual financial flows that might indicate a Benami transaction by aggregating and linking diverse data sources like Property records, Banking transactions, Tax filings, Utility records and ID verification data. AI and ML offer powerful tools to analyze vast datasets, uncover hidden relationships and predict potential violations with greater accuracy and speed.

For example, AI can cross-check property ownership records against databases like land registries and Aadhaar-linked data. If someone owns multiple properties but has a low income, the system flags it as suspicious.

The establishment of AI-powered centralized registries begins with the integration of unified databases that consolidate information from disparate sources such as land registries, income tax filings, financial institutions, Aadhaar-linked records and corporate ownership databases. AI algorithms, particularly those leveraging machine learning and entity resolution techniques, can analyze and correlate these datasets to detect concealed relationships and irregular ownership patterns indicative of benami transactions.

2. Blockchain for Title Transparency:

The integration of blockchain technology into property title registration and ownership tracking systems holds significant promise for improving transparency, reducing fraud and enforcing the Anti-Benami Property Transactions Act. By providing an immutable, transparent and easily accessible record of ownership, blockchain helps ensure that true ownership is always visible, making it much harder for benami transactions to occur undetected. States like Andhra Pradesh have started blockchain pilots for land record transparency. This model can be scaled nationally for benami property identification. Also, projects like Propy, a blockchain-based real estate platform which is popular in US, enable buyers and sellers to complete property transactions with blockchain-backed title records. This ensures full transparency throughout the entire transaction lifecycle - from ownership transfers to payment verification - thereby reducing fraud and enhancing trust in the system.

For isntance, in a blockchain-based property transfer system, when Person A sells property to Person B, the transaction is recorded on the blockchain with a timestamp and immutable details (buyer, seller, price). Later, if Person B attempts to transfer the property to Person C, the blockchain records the full ownership history, preventing Person A from falsely claiming a direct sale to Person C. If the system detects any suspicious behaviour (e.g., mismatched identities or multiple transfers), a smart contract triggers an alert. This decentralized system ensures data immutability, prevents fraudulent claims, and supports secure, transparent property transactions.

3. Satellite Imagery and GIS Tools:

The use of Satellite Imagery and Geographic Information Systems (GIS) tools represents a modern, technology-driven approach to combating Benami property transactions. Satellite Imagery and GIS offer valuable support by enabling the government to monitor land usage, detect discrepancies in ownership patterns and verify undeclared or suspicious assets across vast geographical areas. When combined with data from digital land records, Aadhaar, PAN and income-tax databases, satellite and GIS technologies significantly enhance the state's capacity to enforce the Anti-Benami Act effectively and sustainably. For instance, the Maharashtra government used drones and GIS mapping to identify irregular constructions and land holdings. These technologies help authorities identify unauthorized constructions, encroachments on government land and discrepancies between on-ground realities and official land records.

4. Big Data and Financial Forensics:

Big Data analytics and financial forensic techniques are emerging as critical enablers of proactive, precise and data-driven enforcement. Cross-analysis of GST, TDS, income tax and property registries through big data tools enables investigators to establish patterns of layered ownership and trace unaccounted money flows. Building institutional capacity, fostering inter-agency data sharing and investing in analytical infrastructure will be critical to fully harness the potential of Big Data in the pursuit of financial transparency and accountable property ownership. For instance, thousands of shell companies have been identified where no genuine business activity was conducted, yet high-value assets such as luxury flats, vehicles and artwork were purchased. These detections were made possible through Big Data analytics and financial forensic techniques. By linking data from the Registrar of Companies (ROC) with bank transactions, GST returns and employee records, investigators were able to uncover discrepancies and trace hidden ownerships. This approach not only helps crack down on money laundering but also promotes corporate governance and restores trust in business structures.

Advanced machine learning and topological data analysis to track circular transactions between shell companies and Benami holders. The anomaly detection algorithm continuously adapts to evolving patterns, ensuring that even sophisticated money laundering or Benami activities are flagged for further investigation. In the case of Benami transactions, where funds are often moved through multiple layers of shell companies or proxies to conceal ownership, this real-time monitoring is crucial. By quickly identifying potentially illicit transactions, these systems trigger instant alerts, allowing regulatory bodies and enforcement agencies to take prompt action, such as freezing assets or initiating investigations before fraudulent activity can proceed.

Sustainability Dimension of Anti-Benami Tech:

Environmental Sustainability:

Traditional systems often require multiple copies of documents, contracts and certificates, leading to significant paper consumption. With blockchain, all documents can be securely stored and accessed digitally, significantly reducing paper usage. This shift not only improves efficiency and transparency, but also helps lower the carbon footprint of administrative processes. It supports green governance by reducing deforestation, energy usage in document storage and emissions linked to physical travel and manual audits. This transformation aligns with global efforts to combat climate change and fosters more eco-friendly organizational behaviours.

Carbon footprint reduction: The adoption of cloud-based AI analysis has led to significant environmental benefits. Transitioning from manual raids and traditional enforcement methods to AI-powered analysis has contributed to a 41% reduction in carbon emissions. Previously, enforcement operations generated an estimated 4.2K tons of CO₂ per year through physical interventions. The shift to cloud-based technology not only increases enforcement efficiency but also supports sustainability.

Economic Sustainability:

Sustainable innovations in anti-benami governance—such as Big Data, AI and blockchain—significantly contribute to economic sustainability. These technologies enhance tax compliance, curb black money and strengthen formal financial systems, thereby boosting government revenue. By promoting transparency and accountability, they help build public trust and encourage responsible investment. Moreover, they enable efficient resource planning by uncovering hidden or illegally held assets. Additionally, the data-driven insights generated through these technologies support fair and efficient resource planning. For instance, detecting illegal land hoarding allows better urban development, housing schemes and infrastructure projects, contributing to balanced economic development across regions. In conclusion, sustainable anti-benami innovations not only help fight corruption but also lay the foundation for a resilient and transparent economy that supports inclusive growth and long-term prosperity for all sections of society.

Institutional Sustainability:

Institutional sustainability refers to the ability of an institution to maintain its core functions, adapt to evolving challenges and effectively serve the public over the long term. Within the framework of anti-benami efforts, this sustainability is crucial for ensuring consistent enforcement, transparent governance and long-lasting impact. The integration of advanced digital tools—such as blockchain, artificial intelligence and data analytics—plays a transformative role in strengthening institutional sustainability. These technologies enhance the ability of institutions to detect irregularities, trace benami transactions and manage property-related data with greater accuracy and transparency. To achieve true institutional sustainability, it is essential that such technologies are not treated as one-time solutions or short-term interventions. Instead, institutions must commit to the continuous adoption, maintenance and upgrading of these digital systems.

Green asset recycling:

The concept of green asset recycling involves repurposing confiscated Benami properties for environmentally sustainable projects. For example, properties seized in Benami transactions can be redirected toward the development of solar farms, contributing to renewable energy initiatives. Redirecting seized assets to environmental causes not only serves the purpose of justice but also aligns with broader sustainability objectives.

1. Data Privacy and Ethical Governance:

Challenges: One of the primary challenges in implementing anti-benami technology lies in ensuring data privacy and ethical governance. These technologies depend on the extensive collection and analysis of sensitive personal information—such as financial transactions, property ownership records and identification details—which raises significant concerns around data misuse, unauthorized access and potential surveillance.

Recommendations: It is crucial to establish robust data protection frameworks that clearly define the scope and boundaries of data collection, while ensuring that data is used solely for its intended purpose. Ethical governance must be an integral part of system design and implementation, with regular audits of AI-driven tools to assess fairness, prevent bias and ensure accountability. Additionally, fostering public awareness and maintaining transparency about data practices will be essential to building and sustaining public trust, thereby ensuring that anti-benami initiatives remain both effective and ethically responsible.

2. Inter-Agency Coordination:

Challenges: Inter-agency coordination is a critical aspect of effective governance and emergency response, but it often faces several challenges. The lack of unified communication systems among agencies like land record departments, tax departments and investigating agencies hampers real-time information sharing and delays response efforts. Jurisdictional overlaps and unclear mandates further complicate coordination, as agencies may duplicate efforts or hesitate to act due to uncertainty about their roles.

Recommendations: Establishing clear protocols and formal agreements such as Memorandums of Understanding (MOUs) can help define roles and responsibilities, reducing ambiguity. Joint training programs and simulation exercises should be conducted regularly to build trust and improve teamwork among agencies. Furthermore, the creation of centralized coordination bodies or inter-agency task forces can enhance oversight and streamline collaborative efforts.

3. Capacity Building:

Challenges: Capacity building is essential for enhancing the efficiency and effectiveness of organizations, particularly in sectors like public service, disaster management and development. However, it faces several challenges. One of the main issues is inadequate funding and resource allocation, which limits training opportunities and access to modern tools and technologies. Many organizations also lack strategic long-term planning for human resource development, resulting in fragmented and reactive training efforts. Resistance to change and a lack of motivation among staff can further hinder the success of capacity-building initiatives.

Recommendations: To overcome these challenges, governments and organizations should prioritize and allocate adequate resources for continuous training and development. Establishing partnerships with academic institutions, international organizations and the private sector can bring in technical expertise and new perspectives. Implementing structured training programs that are aligned with organizational goals and local needs is also vital.

Case-Based Justification for Sustainable Innovation in Detecting Benami Transactions

In the 2023 Noida GST Scam, fraudsters created over 2,000 shell firms using Aadhaar and PAN details of destitute individuals like rickshaw pullers and housemaids. These individuals were paid meagre amounts, unaware that they were being made directors in firms used to fraudulently claim ₹10,000 crore in Input Tax Credit (ITC). The scam exposed major lapses in KYC verification, biometric checks, and real-time monitoring. A Sustainable Innovation approach—using AI-driven anomaly detection, biometric directorship verification, and big data link analysis—can prevent such frauds. Combining technology with strong legal enforcement ensures continuous, scalable, and ethical fraud detection. This tech-legal model safeguards national revenue and protects vulnerable citizens from exploitation.

Multiple press releases by the Government of India revealed large-scale benami transactions involving land worth ₹110 crore, post-demonetization cash deposits of ₹39 crore through employee accounts, and ₹105 crore worth of benami properties held by financially weak individuals in Bhopal. In Chennai, unclaimed cash of ₹34.6 lakh was seized and declared benami. These cases highlight how proxies were used to hide real ownership and circulate black money. A Tech-Legal Approach—combining AI-based property mapping, biometric KYC for company formation, and real-time cash flow analytics—can uncover such layered transactions. This form of Sustainable Innovation ensures long-term, ethical, and efficient enforcement, protects vulnerable citizens from misuse, and builds financial transparency into the system.

Statistical Justification for the Need for Sustainable Innovation in Anti-Benami Enforcement

Hypothesis Framework

• H₀ (Null Hypothesis): Traditional awareness programs alone are sufficient for preventing benami participation.
• H₁ (Alternate Hypothesis): Sustainable enforcement of Benami law requires integration sustainable & innovative techniques like using AI-driven tools, financial literacy data and tech-enabled outreach programs.

A structured field survey was conducted with 120 participants from mixed economic backgrounds (urban slums, low-income households, factory workers, and semi-literate office staff). The aim was to assess:

1. Whether traditional awareness campaigns had helped them avoid becoming benamidars.
2. Their comfort level with using or trusting digital tools like UPI, SMS alerts, WhatsApp bots, or facial KYC.
3. Their opinions on whether technology-backed systems would prevent fraud better than just classroom sessions.

Survey Result Summary

Participants were asked: "Do you think awareness programs alone are enough to prevent fraud, or should technology (like AI tools, alerts, facial KYC) also be used?"

Chi-Square Test

We performed a Chi-Square Goodness of Fit Test to determine if the difference in preference is statistically significant.

Null Hypothesis (H₀): There is no preference between traditional and tech-driven methods (expected = 50:50 split)

Alternate Hypothesis (H₁): There is a significant preference for tech-driven models.

Observed Frequencies

• Traditional Awareness: 29
• Tech-Integrated Approach: 91

Expected Frequencies (if both methods were equally effective)

• Traditional Awareness: 60
• Tech-Integrated Approach: 60

Chi-Square Calculation =32.03

With df = 1, the critical value of χ² at 0.05 significance is 3.84.

Since 32.03 > 3.84, we reject H₀.

Conclusion: H₁ Confirmed

The statistical test confirms that people overwhelmingly prefer tech-integrated approaches. Traditional awareness programs alone are not sufficient to prevent benami misuse, especially in low-literate or digitally vulnerable communities. Participants expressed higher trust in:

• AI-powered alerts (SMS/WhatsApp)
• Biometric or facial KYC
• Digital ownership verification systems

This reinforces our conclusion that sustainable innovation in Benami enforcement must integrate technology, financial behavior data, and smart outreach tools, going far beyond old-school awareness drives.

Benami transactions are not just a legal issue but a socio-economic cancer. They allow individuals to hide black money and evade taxes, leading to significant revenue loss for the government. This lost revenue could have been used for public welfare and development. A sustainable future requires not only enforcement but smart, tech-enabled legal frameworks. India's efforts post-2016 show promise, but with sustainable and innovative techniques like blockchain, AI and big data, we can leapfrog enforcement capabilities while aligning with sustainability goals. With innovative thinking and cross-sectoral coordination, anti-benami enforcement can become a pillar of India's journey toward $5 trillion economy and ethical governance. A transparent financial ecosystem will empower honest citizens, attract clean investments and foster inclusive growth. Only by rooting out such socio-economic evils can India move confidently towards a just, resilient and corruption-free future.

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