In plain words: holding property or money in your name for a relative is common in Indian families. Usually harmless — but if that wealth is linked to a crime, it can become a serious PMLA risk for you.
How the risk arises
The PMLA targets proceeds of crime wherever they are parked. If tainted money is placed in your name — a bank account, a flat, a plot — you can be drawn into the case as a person in possession of or dealing with proceeds of crime, and the property can be attached.
The role of knowledge
Liability under Section 3 generally turns on knowledge or involvement. Someone who knowingly lets their name be used to disguise dirty money is exposed. Someone who genuinely did not know, and received what appeared to be a legitimate gift or arrangement, is in a very different position — but must be able to show it.
The benami overlap
Holding property in one name for another's benefit can also raise issues under the benami law, a separate regime with its own attachment and confiscation powers. The two can operate together where tainted money is parked benami.
How to protect yourself
- Know the source before accepting property or large sums in your name.
- Document gifts and loans properly — deeds, bank trails, tax treatment.
- Avoid lending your name to hold others' assets, however close the relative.
- If already exposed, take advice and assemble proof of your lack of knowledge and the apparent legitimacy.
Frequently asked questions
Can my property be attached for a relative's crime? If it is proceeds of crime parked in your name, yes — which is why source and knowledge matter.
I didn't know the money was tainted — am I safe? Lack of knowledge is a key defence, but you must be able to establish it.
Does a registered gift deed protect me? It helps show legitimacy, but the source of the funds still matters.
How Vakil Help Desk helps
Vakil Help Desk advises and defends clients at every stage of a PMLA matter — summons, attachment, arrest, bail and trial. If the ED has contacted you or you fear action, we can help you protect your position.
This article is for general legal awareness, not individual legal advice. PMLA proceedings move fast and the law is evolving through court rulings and notifications, so the right step depends on your facts and the current position. If you have received an ED notice or fear action, consult a lawyer immediately.