Computing Net Wealth

Net Wealth Means Capital

Capital = Assets - Liabilities

Here Assets =

1. Bank Balance                              4,30,000

2. Unaccounted cash balance         70,000

3. Gold Articles                                25,00,000

4. Jwellery made of Silver             14,00,000

5. Guest House                               35,00,000 (Not to be included here as it has been mortgage)

6. Moter Cars                                     6,40,000

7. Factory Building                             8,00,000

Totalling           58,40,000

and liabilities = 800000 (Loan)

Hence    

Capital = 50,00,000  

hope i am correct

Capital =

Net wealth;

Unaccounted cash balance         20000

Guest House                               35,00,000

Moter Cars                                     6,40,000    

                                                        41,60,000

less: loan                                         nil

 net wealth                                   4160000/-

notes:

1. gold articles and jewellery is assumed 2 b stock.

2. cash in hand in excess of Rs.50000/-

3. factory building used for PGBP, hence excluded.

4. loan against factory building not taken as the very asset is not taken at the first place.

Thanks dude, but he have taken loan for factory building after mortgage of Guest house.

Please solve it

Originally posted by : vinay yadav
	Thanks dude, but he have taken loan for factory building after mortgage of Guest house.   Please solve it

Yes. Loan is taken for factory building. But since, factory building is used for PGBP. so under to SEc.2(ea)(i)(3) of the wealth tax Act, the same is excluded from the net wealth. Now the loan is taken for the purchase of factory building.Since the said building is not taken, the corresponding loan will also not be subtracted frm the wealth. Whether guest house is mortaged, is of no effect here.!!!!!!!!!!