Wealth tax clarifiaction required

This query is : Resolved

siva kumar (Querist)
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30 January 2014 Dear Sir,

if an person have 3 buildings

1 - is used for own occupation
2 & 3 - property's are given to lease to finance companys.

under section 2 ea the leased propertys are expemted.

please clarify these are exempted are not.

CA Hardik Bunha

CA Hardik Bunha (Expert)
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30 January 2014 No, leased properties are taxable according to its calculation depends period of lease.

siva kumar

siva kumar (Querist)
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30 January 2014 could you please clarify some more on it.

if you are saying that its calculation is depend upon lease period.

if vacant site is also taxable or not, if it is given to lease.

under wealth tax

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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03 August 2025 Sure! Here's a clear explanation regarding **wealth tax treatment of buildings and leased properties**:

---

### 1. **Own Occupied Property:**

* The **building used for own occupation** is **exempt** from wealth tax under **Section 2(ea)** of the Wealth Tax Act, 1957.
* This exemption applies to **one residential house property** occupied by the assessee.

---

### 2. **Leased Properties:**

* The **buildings given on lease or rented out** **do NOT get exemption**.
* Such properties are treated as **urban land or building assets** and are **fully taxable under wealth tax**.
* The **valuation is as per guidelines** (government notified guideline value or market value, whichever is higher).

---

### 3. **Vacant Sites:**

* Vacant land, even if leased out, is also **taxable under wealth tax**.
* If leased, it is **not exempt**.
* Valuation will be as per **guideline value** or **fair market value** of the land.

---

### 4. **Summary:**

| Property Type | Wealth Tax Treatment |
| ------------------------------- | -------------------- |
| One residential house (own use) | **Exempt** |
| Other leased/rented buildings | **Taxable** |
| Vacant land (leased or not) | **Taxable** |

---

### Additional Notes:

* The exemption of **one residential house** is available only if it is **actually occupied** by the owner.
* If the owner owns more than one house property, all except one are taxable.

---

If you want, I can also guide you on **valuation methods** for these assets under wealth tax.

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