CA Student
6149 Points
Joined March 2009
The present threshold limit of wealth tax is Rs. 30 lakhs. If Net Wealth exceeds this Rs. 30 lakh limit, then tax is to be paid @ 1% on the exceeded limit. There is no sucharge and cess on this. The term Assets is defined in Sec.2(ea) of Wealth Tax Act. To say briefly, the term Assets includes urban land, buildings, cars, yachts, boats, aircrafts, jewellery, bullion and articles made of gold/silver/platinum.
Broadly, Net Wealth can be arrived as below:
Assets as per Sec.2(ea) (minus) All debts owed by the assessee as on the valuation date (31st March) on above assets (minus) Exempted assets u/s 5 (plus) Deemed assets u/s 4.
The aforesaid threshold limit of Rs. 30 lakhs is raised to Rs. 1 crore under new DTC, which means net wealth exceeding 1 crore limit will only be taxable at 1% rate without any cess. However, some more assets also brought into the ambit of the definition Assets. As said by Richa, there is no concept of incremental value. One should arrive the net wealth by following above procedure.