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Wealth tax on motor car (Income Tax)

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( Author )
23 September 2011

dear All,
I want to know, whether for welath tax we have to take WDV as per Income Tax Act or As per Companies Act. I searched through CCI and there I found for both the answers. Some are saying s per IT and some as saying as per Co's. So please give me the correct answer. If any support to the same, it will be very helpful

Thanks in Advance
Regards
Hitesh


Siddhartha Bhardwaj

( Expert )
23 September 2011

For wealth tax purposes the value of a motor car is to be taken as the fair value of the motor car. (Rule 20 of Schedule III of the Wealth Tax Act)

Now the question is how to determine fair value.

The best possible option is to take the value determined in the insurance policy of the vehicle, because that value has been determined by the insurance company and cannot be questioned.

If anyone has different opinion kindly share.


HITESH KHONA

( Author )
23 September 2011

Thanks Siddhartha.

Require more clarity in this
Regards


Siddhartha Bhardwaj

( Expert )
23 September 2011

The vehicle must be insured. The insurance policy contains a value of the motor car which is valid for one year. This value is revised every year.

On the valuation date, i.e., 31st March, see the value in the policy.

eg. Insurance period is from 15th Sep, 2011 to 14th Sep, 2012.

For 31st March, 2012, the value mentioned in this policy will be treated as the fair value of the vehicle.


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