New Delhi, Aug 18 (IANS): The government Thursday introduced a bill in parliament to replace an existing law in a bid to check tax evasion and impose stricter controls and penalties on financial transactions under fictitious names.

Finance Minister Pranab Mukherjee introduced the Benami Transactions (Prohibition) Bill, 2011, which will replace the existing Benami Transactions (Prohibition) Act, 1988. If a beneficiary of a property is not the person in whose name it is bought, it is termed as as benami -- a Persian word meaning without name.

The bill contains elaborate provisions dealing with the definition of benami transaction and benami property, prohibited benami transactions, the consequences of entering into a prohibited benami transaction and the procedure for implementing the benami law.

It calls for a benami property so acquired to be confiscated after the person concerned has been given due opportunity of being heard.

It also says that a person who enters into a benami transaction to defeat any provisions of law or avoid statutory dues or payment to creditors can punished with an imprisonment of not less than six months and, which may extend to two years, apart from a fine.

"Properties held by a coparcener in a Hindu undivided family and property held by a person in fiduciary capacity are excluded from the definition of benami transaction," the finance ministry said.

"Further, properties acquired by an individual in the name of spouse, brother or sister or any lineal ascendant or descendant are benami transactions which are not prohibited. Consequently, they are also not subject to penal provisions."

The bill also calls for the federal government, in consultation with the chief justices of high courts, to designate one or more sessions or special courts for the purpose of the legislation.