Wealth Tax
114.1 Wealth tax w.e.f. assessment year 1993-94
is leviable only on certain specified assets. These include :-
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guest house or any other house including farm house within twenty-five
kilometres from the local limits of any local body but does not inlcude a house
which has been allotted by a company to an employee, or an officer,
or a director who is in the whole time employment having a gross annual salary
of less than Rs. 5,00,000/-. It also does not include any house for residential
or commercial purposes which form part of stock-in-trade or which is occupied by
the assessee for his business or profession or a residential property let out
for atleast 300 days in the year. Exemption from total wealth has been provided
for one house or part of a house or a plot of land of up to 500 sq. metres
belonging to an individual or a Hindu Undivided Family;
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motor cars other than those used in the business of running them on hire;
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jewellery, bullion (other than those used as stock-in-trade);
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yachts and boats and aircraft (other than those used for commercial purposes);
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cash in hand in excess of Rs. 50,000/- held by individuals or HUFs
and in case of other person any amount not recorded in the books of account; and
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urban land.
Urban lands on which construction of buildings is not permissible or land
occupied by building constructed with approval or land held for industrial
purposes for two years are not included. Land held as stock in-trade for ten
years is also not included. Only those debts which have been incurred in
relation to the aforementioned assets are allowed as a deduction in the
computation of net wealth. The value of an asset, other than cash, is taken as
per the rules framed for valuation of assets and where no rules exist, at the
estimated price which it would fetch if it were sold in the open market. In the
case of an individual the wealth of others in certain cases, as specified in
section 4 of the Act is deemed to be owned by him and is also taken into account
in computing his net wealth.
14.1.1 In computing the net wealth of an
individual who is not a citizen of India or of an individual or HUF not resident
in India or resident but not ordinarily resident in India or of a company not
resident in India during the year ending on the valuation date, the value of
assets and debt located outside India and the value of assets in India
represented by such loan or debts due to the assessee in respect of which
interest is exempt under section 10 of the Income-tax Act, 1961 is not taken
into account.
14.1.2 From assessment year 1993-94, the wealth
tax is leviable at the rate of one per cent of the amount by which the net
wealth exceeds Rs 15,00,000/-.
14.1.3 In the case of an assessee being a person
of Indian origin or a citizen of India who was ordinarily residing in a foreign
country and who has returned to India for settling permanently, the moneys and
the value of assets brought by him into India and the value of assets acquired
by him out of such moneys within one year immediately preceding the date of his
return and at any time thereafter will not be included in the net wealth of
assessee. But this exemption shall apply only for a period of successive
assessment years commencing with the assessment year next following the date on
which such person returned to India.
14.1.4 The return of net wealth is ordinarily
required to be furnished to the Wealth Tax Officer before the due date which is
the due date for filing the income tax return by him (Refer 13.1). If any
wealth-tax is payable on the net wealth declared by the tax payer in his return,
he is required to pay such tax on the basis of self-assessment before furnishing
the return and to attach the proof of payment thereof with the return.
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