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Wealth Tax

HIREN PATEL (CHARTERED ACCOUNTANT) (33 Points)

04 March 2009

I am having a plot of urban land which was given on lease rent for 30 years to a limited company. The company has constructed a shed on the above land. The market value of land as per Valuation Report is apprx. Rs. 6000000/- (Rs. Sixty lacs). Whether I am liable to pay wealth tax on the said urban land.

If there was no shed on the above land and the land is simply given on rent for more than 300 days during the financial year 2009-10 would I still be liable to pay wealth tax ?

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2 Replies

LAXMIKANT JAIPURKAR (Practicing Company Secretary/Tax Consult) (403 Points)
Replied 04 March 2009

In my opinion, the ownership of the constructed builidng is company and not you. Hence, you will not be required to pay the Wealth Tax even you give the land for more than 300 days on lease.

(Guest)

In the first case, as the ownership vests with the Company....Company will be liable to pay Wealth tax on it, if applicable. For plot of land, you are the owner but it will be exempt as being Occupied by any building which has been constructed with the approval of the appropriate authority.

However if its rented as such and no building has been constructed on it, Wealth tax will be applicable as exemption for being rented more than 300 days is available only in case of building and not available for Urban LAND.