Wealth Tax 1

8/7/2019 Wealth Tax 1

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WEALTH TAX ACT,1957WEALTH TAX ACT,1957


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Charge Of TaxCharge Of Tax


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Charge Of TaxCharge Of Tax

It is charged for every assessment yearIt is charged for every assessment yearcommencing from 1/4/1957 in respect ofcommencing from 1/4/1957 in respect of

net worth.net worth. Wealth tax is charged on the net wealth ofWealth tax is charged on the net wealth of

the assessee.the assessee.


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Who Is An IndividualWho Is An Individual


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Who Is An IndividualWho Is An Individual

Anatural person or human being.Anatural person or human being.

Hindu deity or mutawajli of a wakf.Hindu deity or mutawajli of a wakf.

Group of individuals being trustees of aGroup of individuals being trustees of atrust.trust.

Holder of an impartible estate.Holder of an impartible estate.

Group of individuals like mapillai tarwards.Group of individuals like mapillai tarwards.


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Who Is Not An IndividualWho Is Not An Individual

A company.A company.


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A corporation established by state orA corporation established by state orcentral acts.central acts.

A coA co--operative society.operative society.


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Hindu Undivided FamilyHindu Undivided Family

Limited to Mitakshara families.Limited to Mitakshara families.

Dayabhaga school is not a HUF.Dayabhaga school is not a HUF.

If a hindu converts to christianity, heIf a hindu converts to christianity, hecannot be granted the status of HUF.cannot be granted the status of HUF.


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What Is A CompanyWhat Is A Company


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What Is A CompanyWhat Is A Company

Any Indian company.Any Indian company.

Any body corporate incorporated outsideAny body corporate incorporated outside

India.India. Any institution, AOP, BOI which is or wasAny institution, AOP, BOI which is or was

assessable or was assessed for anyassessable or was assessed for anyassessment year under Indian Income Taxassessment year under Indian Income TaxAct, 1922(now replaced by 1961).Act, 1922(now replaced by 1961).


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What Is An Asset [Section 2(ea)]What Is An Asset [Section 2(ea)]

Any building or land appurtenant theretoAny building or land appurtenant theretowhether used for residential or commercialwhether used for residential or commercialpurpose.purpose.


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Motor cars (other than used by assesseeMotor cars (other than used by assesseein business).in business).


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Jewellery, bullion & furniture, utensils orJewellery, bullion & furniture, utensils orany other article made wholly n partly ofany other article made wholly n partly ofgold, silver, platinum or any othergold, silver, platinum or any otherprecious metal.precious metal.


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Yachts, boats & aircraft.Yachts, boats & aircraft.


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Cash in hand in excess of Rs.50,000.Cash in hand in excess of Rs.50,000.


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Incidence Of Wealth TaxIncidence Of Wealth Tax

The liability of wealth tax depends uponThe liability of wealth tax depends uponthe citizenship & residential status.the citizenship & residential status.

For HUF, it depends totally uponFor HUF, it depends totally uponresidential status.residential status.


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Individual, Not A citizen Of IndiaIndividual, Not A citizen Of India


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Individual, Not A citizen Of IndiaIndividual, Not A citizen Of India

All assets in India except the value of assets inAll assets in India except the value of assets inIndia represented by any loan or debts.India represented by any loan or debts.

All debts in India except:All debts in India except:

a) The debt secured on any property or incurreda) The debt secured on any property or incurredin relation to any property on which wealth taxin relation to any property on which wealth taxis not payable.is not payable.b) Tax liability under direct tax if outstanding onb) Tax liability under direct tax if outstanding onvaluation date.valuation date.c) All assets and debts outside India are out ofc) All assets and debts outside India are out ofthe scope of wealth tax.the scope of wealth tax.


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An Individual, Citizen AndAn Individual, Citizen And

Resident In IndiaResident In India


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In Case of HUF, ResidentIn Case of HUF, Resident

All assets in India and assets outsideAll assets in India and assets outsideIndia.India.

All debts in India and outside India are

All debts in India and outside India aredeductible in computing net wealth.deductible in computing net wealth.


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Valuation Date, Section 2(q)Valuation Date, Section 2(q)

It is the last day of the previous year forIt is the last day of the previous year forincome tax assessment.income tax assessment.

It is a tax base of the levy of wealth tax.It is a tax base of the levy of wealth tax. Where a person is not an assessee underWhere a person is not an assessee under

Income Tax Act, the valuation date will beIncome Tax Act, the valuation date will bealways on March 31always on March 31stst..


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Deemed AssetsDeemed Assets

The individual must be the owner of theseThe individual must be the owner of theseassets.assets.

These assets must be transferred withoutThese assets must be transferred withoutadequate consideration.adequate consideration.

These assets must be held by theThese assets must be held by thetransferee on the valuation date.transferee on the valuation date.


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Converted property, Section 4(ia).Converted property, Section 4(ia).

Transfer by means of entries in the book,Transfer by means of entries in the book,

section 4(5a)section 4(5a) Impartible assets section 4(6)Impartible assets section 4(6)

House from a coHouse from a co--operative housing societyoperative housing society

section 4(7)section 4(7)


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Net WealthNet Wealth

According to sec 2(m), net wealth meansAccording to sec 2(m), net wealth meansthe amount by which the aggregate valuethe amount by which the aggregate valueof all assets wherever located belonging toof all assets wherever located belonging tothe assesse on the valuation date, is inthe assesse on the valuation date, is inexcess of the aggregate value of all theexcess of the aggregate value of all thedebts owed by the assessee on thedebts owed by the assessee on the

valuation date.valuation date.


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Following assets are not included:Following assets are not included:

1.1. Assets exempt under sec 5(1).Assets exempt under sec 5(1).

2.2. Asset lost, destroyed or stolen on orAsset lost, destroyed or stolen on orbefore valuation date.before valuation date.


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What Is Debt?What Is Debt?


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What Is Debt?What Is Debt?

Debts owed are interpretable to mean theDebts owed are interpretable to mean theliability to pay a certain amount of money eitherliability to pay a certain amount of money eitherin present or in future.in present or in future.

It is an obligation to pay a liquidated or certainIt is an obligation to pay a liquidated or certainsum of money.sum of money.

It is not the point of time of payment thatIt is not the point of time of payment thatdetermines whether the claim or demand is adetermines whether the claim or demand is a

debt.debt. There must be an actual debt owing on theThere must be an actual debt owing on the

valuation date.valuation date.


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Return Of WealthReturn Of Wealth

Sec 14 deals with the filing of return of wealth.Sec 14 deals with the filing of return of wealth.

It is statutorily obligatory for every person to fileIt is statutorily obligatory for every person to filethe return if his net wealth exceeds maximumthe return if his net wealth exceeds maximum

amount which is chargeable to wealth tax.amount which is chargeable to wealth tax.

He can file a belated or revised return at anyHe can file a belated or revised return at anytime before the expiry of one year from the endtime before the expiry of one year from the endof the relevant assessment year or before theof the relevant assessment year or before thecompletion of assessment, whichever is earlier.completion of assessment, whichever is earlier.


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AcknowledgementAcknowledgement

We would like to thank Mr. AugustineWe would like to thank Mr. AugustineAmaldas for giving us this opportunityAmaldas for giving us this opportunitywhich has enriched our minds.which has enriched our minds.

Date post:	08-Apr-2018
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Wealth Tax 1

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