The present study deals with the issue of differentiating between benami transactions and true transactions under Indian property law. In this context, the two primary legislative acts, viz., the Transfer of Property Act, 1882 and the Benami Transactions (Prohibition) Act, 1988, are discussed. Whereas the Transfer of Property Act is a set of basic rules that include ownership, intention, and valid consideration, the concept of benami transactions introduces an inconsistency between legal ownership and beneficial ownership. The study highlights various differences between true transactions and benami transactions, focusing on intention, source of consideration, and possession as the key elements for the identification of one transaction from another. Moreover, several decisions made by judicial courts regarding benami transactions are analyzed in order to emphasise the difficulties faced while establishing the actual intention of the parties involved in a transaction through circumstantial evidence. It is important to note that the interplay between the Transfer of Property Act and the concept of benami transactions is associated with certain inconsistencies, which are highlighted in the study, namely flexibility vs. rigidity, recognition vs. prohibition. The study considers the potential challenges in distinguishing between true and benami transactions, including family arrangement, absence of documents, etc. Under the critical approach adopted by the research, an analysis will be made on whether the rigidness of the benami law goes against the equity principle in TPA and limits genuine transactions. This will help make the case for achieving balance in this issue. Ultimately, reform strategies are provided, such as setting clear guidelines, better documentation, alignment of laws, and protection of valid transactions. The objective is to create a legal environment that facilitates genuine transactions and eliminates illegal benami transactions.