Professional Documents
Culture Documents
.................. Wealth Tax.............................
.................. Wealth Tax.............................
.................. Wealth Tax.............................
The Act applies to the whole of India including the state of Jammu and
KashmirandtheUnionTerritories.
TheapplicationoftheActhasbeendiscontinuedfrom1April2016.
WealthtaxwasabolishedintheUnionBudget(2016-2017)presentedby
UnionFinanceMinisterofIndiaMr.ArunJatelyon28-Feb-2015.
b)Preciousorsemipreciousstones,whetherornotsetinanyfurniture,
utensilsorotherarticlesorworkedorsewnintoanywearingapparel
However,thetermjewelryshallnotincludetheGoldDepositBonds
issuedunderGoldDepositScheme,1999notifiedbytheCentral
Government
However,ifanyoftheabovestatedassetsareheldbytheassesses
asstock-intrade,thenitisnottreatedasanasset
5) Urban Land Sec 2(ea)
(v)Urbanlandistreatedasanassetandurbanlandmeanslandsituated
a)inanyareawhichiscomprisedwithinthejurisdictionoflocal
authorityandwhichhasapopulationofnotlessthantenthousandaccording
tothelastprecedingfiguresofcensusofwhichtherelevantfigureshavebeen
publishedbeforethevaluationdate;or
b)isanyareawithinsuchdistance,notbeingmorethan8kilometer
fromthelocallimitsofthelocalauthorityasthecentralgovernmentmay,
havingregardtotheextent,andscopeforurbanizationofthatareaandother
relevantconsiderations,specifiedinthisbehalfbynotificationintheofficial
gazette.
Howeverlandisnottreatedasassetinthefollowingcases:
a)Landonwhichconstructionofabuildingisnotpermissibleunderanylaw
forthetimebeinginforceintheareainwhichsuchlandissituated;
b)Landoccupiedbyanybuildingwhichhasbeenconstructedwithapprovalof
theappropriateauthority;
c)Anyunusedlandheldbytheassessesforindustrialpurposesforaperiodof
twoyearsfromthedateofacquisitionbyhim
d)Landheldbyanassessesasstock-in-tradeforaperiodof10yearsfromthe
dateofitsacquisitionbyhim.
6) Cash-in-hand Sec 2(ea)
(vi)209Followingistreatedasanassets:
a)IncaseofanyindividualandHUF,cashin
handonthelastmomentofthevaluationdatein
excessof50,000shallbetreatedasasset
b)Incaseofanyotherpersonanyamountnot
recordedinthebooksofaccountsshallbetreatedas
asset.
Charge of wealth tax
Wealth tax is chargeable on the following basis:
I)Incaseofindividualonthebasisofhisnationalityandresidential
statusofthepreviousyearendingonthevaluationdate.
II)IncaseofHUFandcompanyonthebasisofitsresidentialstatus
ofthepreviousyearendingonthevaluationdates.
ProcedureforcomputationofWealthtax.
Thenetwealthofanassessesincludesthevalueofspecified
unproductiveassetsonthevaluationdateaftersubtractingthe
debttheassessesowesonthesaidassets.
WealthtaxdoesnotattractanyEducationCessorsurcharge.
Exceptions
Wealth Tax is not applicable to :-
Trusts
ArtificialJudicialPersons
Partnershipfirms
Associationofpersons(AOPs)
A company registered under Section 25 of the Company Act,
1956
Co-operativeSocieties
Socialclubs
Politicalparties
Mutualfundsspecified under Section 10 Clause (23D) of the
IncomeTaxAct
COMPUTATIONOFNETWEALTHANDWEALTHTAX
Procedureforcomputationofnetwealthisasfollows:
LessDeductibledebtsowedby (Y)
assessesonthevaluationdate.
NetWealth X-Y
Assessment under section 143(1)
Thisisapreliminaryassessmentandisreferredtoassummaryassessmentwithout
callingtheassesses(i.e.,taxpayer).
Fortheabovepurposeanincorrectclaimapparentfromanyinformationinthereturn
meansaclaimonthebasisofanentryinthereturn:
(I)ofanitemwhichisinconsistentwithanotherentryofthesameorsomeother
iteminsuchreturn;
(ii)inrespectofwhichtheinformationisrequiredtobefurnishedundertheActto
substantiatesuchentryandhasnotbeensofurnished;or
(iii)inrespectofadeduction,wheresuchdeductionexceedsspecifiedstatutorylimit
whichmayhavebeenexpressedasmonetaryamountorpercentageorratioorfraction;
Procedure of assessment under section 143(1)
Aftercorrectingarithmeticalerrororincorrectclaim(ifany)as
discussedabove,thetaxandinterest,ifany,shallbecomputedonthe
basisoftheadjustedincome.
Anysumpayablebyorrefundduetothetaxpayershallbeintimated
tohim.
Anintimationshallbepreparedorgeneratedandsenttothetaxpayer
specifyingthesumdeterminedtobepayableby,ortheamountof
refundduetothetaxpayer.
Anintimationshallalsobesenttothetaxpayerinacasewherethe
lossdeclaredinthereturnofincomebythetaxpayerisadjustedbut
notaxorinterestispayablebyornorefundisduetohim.
Theacknowledgementofthereturnofincomeshallbedeemedtobe
theintimationinacasewherenosumispayablebyorrefundableto
theassessesorwherenoadjustmentismadetothereturnedincome.
Theprocessingofareturnundersection143(1)shallnotbenecessary,
whereanoticehasbeenissuedtotheassessesundersection143(2),
i.e.,anoticeforscrutinyassessmenthasbeenissuedtothetaxpayer.
Wealth tax on closely held companies
Closelyheldcompaniesisapublicitytraded
companyinwhichasmallgroupof
shareholdercontrolthemajorityoftheshares.
Thesemajorityshareholderstendtoholdon
thecompanysstockandassuchonlyminority
sharesaretraded,leadingtolighttradevolume
Closelyheldcompaniesare,bytheirnature,
resistanttohostiletakeoverandproxywars.
Revival of levy of wealth tax in the case
of closely held companies are.
Wealthtaxshallbechargedunderthewealthtaxact
foreveryassessmentyearcommencingonandfrom
the1stdayofApril,1984inrespectofthenetwealth
onthecorrespondingvaluationdateofevery
company,notbeingacompanyinwhichthepublic
aresubstantiallyinterestsattherateoftwo%of
suchnetwealth.
Forthepurposeofsub-section(1)thenetwealthofa
companyshallbetheamountbywhichtheaggregate
valueofalltheassetsreferredtosub-section(3)