Wealth Tax Basic Concept
Applicability: whole of India from 1st April, 1957.
Chargeability: On net Wealth of individual, HUF & Company @ 1% in excess of Rs. 3,00,000 on
Valuation Date: 31st march immedialely preceding the assessment year.
Net Wealth means------
Value of assets on valuation date ********
(+) Deemed assets u/s 4 ********
(-) Assets exempt u/s 5 ********
Chargeable Assets ********
(-) Debts owed by assessee incurred
in relation to assets included
in chargeable assets *********
Net Wealth *********
Assets: Only these 6 assts are taxable in Wealth Tax----
(1) House; (2) Motor car; (3) Jewellary, bullion, furniture, utensils, etc. made of precious metal; (4) Yachts, boats and aircrafts; (5) Urban Land; and (6)cash in Hand.
Deemed Assets u/s 4:
(A) only For Individual
i) Assets transferred to spouse; ii) Assets held by a minor child; ii) Assets tranferred to a person or AOP for benifits of the Individual, his/her spouse; iv) Assets transferred under revocable transfer; v) Assets transferred to son's wife. vi) Assets transferred to person or AOP for the benifits of son's wife; vii) converted property; viii) Holder of an impartible estate.
(B) For Individual, HUF, Company
i) Interest in a firm or AOP; ii) Gifts by Book entries; iii) Property held by a member under House Building Scheme; iv) Property (Building) right in building acquired under part performance. Assets
Exempt u/s 5:
These assets are exempted under Wealth Tax----
i) Property held under a Trust; ii) Coparcenary interest in property of HUF; iii) One official residence of former ruler; iv) Heirloom jewellary of a former Ruler; v) Assets brought in India by citizen of India or persons of Indian Origin; vi) One house or part of house of Individual or HUF.
Debts Owed: Debts outstanding on valuation date in relation to assets included in net wealth of
the assessee. Debts secured on the assets are not deductable.
Rounding off of Net Wealth: Nearest multiple of one hundred.
Rounding off of Tax: To the nearest of rupee and part thereof.