Wealth Tax
114.1
Wealth tax w.e.f. assessment year 1993-94 is leviable only on certain specified
assets. These include :-
-
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;
-
motor cars other than those used in the business of running them
on hire;
-
jewellery, bullion (other than those used as stock-in-trade);
-
yachts and boats and aircraft (other than those used for
commercial purposes);
-
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
-
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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