Wealth Tax In India

8/7/2019 Wealth Tax In India

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Incidence of Wealth taxIncidence of Wealth tax

For an individual who is a citizen of India and resident in India, a residentFor an individual who is a citizen of India and resident in India, a resident--HUF and company resident in India, wealth tax is chargeable on netHUF and company resident in India, wealth tax is chargeable on netwealth that consists of:wealth that consists of:

All assets in India and outside IndiaAll assets in India and outside India

All debts present in India as well as outside India are deductible whileAll debts present in India as well as outside India are deductible whilecalculating the net wealth.calculating the net wealth. For any individual who is an Indian citizen but not residing in India, HUF,For any individual who is an Indian citizen but not residing in India, HUF,

nonnon--resident or not ordinarily resident in India and a company nonresident or not ordinarily resident in India and a company non--resident in India:resident in India:

All assets in India except loan and debts interest whereon is exempt fromAll assets in India except loan and debts interest whereon is exempt fromincomeincome--tax under section 10 of the Incometax under section 10 of the Income--tax Act are chargeable to taxtax Act are chargeable to tax

All debts in India are deductible in computing the net wealth.All debts in India are deductible in computing the net wealth. All assets and debts outside India are out of the scope of Wealth Tax Act.All assets and debts outside India are out of the scope of Wealth Tax Act.


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AssetsAssets

Assets liable to wealth taxAssets liable to wealth tax

under the Wealth Tax Act are:under the Wealth Tax Act are: Any building or land which includes commercialAny building or land which includes commercial

buildings, residential buildings, any guest house, abuildings, residential buildings, any guest house, afarm house situated within 25 kilometers from the localfarm house situated within 25 kilometers from the local

limits of any municipalitylimits of any municipality Motor CarsMotor Cars Jewellery that includes ornaments made of gold, silver,Jewellery that includes ornaments made of gold, silver,

platinum or any other precious metal of any alloyplatinum or any other precious metal of any alloycontaining one or more of such precious metals as wellcontaining one or more of such precious metals as wellas precious or semias precious or semi--precious stonesprecious stones

Bullion, furniture, utensils or any other, article madeBullion, furniture, utensils or any other, article madewholly or partly of gold, silver, platinum or any otherwholly or partly of gold, silver, platinum or any otherprevious metalprevious metal

Yachts, boats and aircraftsYachts, boats and aircrafts Urban landUrban land Cash in handCash in hand


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Return on Wealth TaxReturn on Wealth Tax::

Every person, if his net wealth or the net wealth of anyEvery person, if his net wealth or the net wealth of anyother person in respect of which he is assessableother person in respect of which he is assessableunder this Act on the valuation date exceeded theunder this Act on the valuation date exceeded the

maximum amount which is not chargeable to wealthmaximum amount which is not chargeable to wealth--tax, shall, on or before the due date, furnish a return oftax, shall, on or before the due date, furnish a return ofhis net wealth or the net wealth of such other person ashis net wealth or the net wealth of such other person as

on that valuation date in the prescribed form andon that valuation date in the prescribed form andverified in the prescribed manner.verified in the prescribed manner.


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Who Pays Wealth TaxWho Pays Wealth Tax??

Assessee means a person by whom the wealth tax or any otherAssessee means a person by whom the wealth tax or any othersum of money is payable under the provisions of the Act, andsum of money is payable under the provisions of the Act, andincludes the legal representative, executor or administrator of aincludes the legal representative, executor or administrator of adeceased person and a person deemed to be an agent of a nondeceased person and a person deemed to be an agent of a non--

resident.resident.Under the Act tax is charged on the following persons in respect ofUnder the Act tax is charged on the following persons in respect ofthe wealth held by them during the assessment year:the wealth held by them during the assessment year:

A company.A company. A Hindu Undivided Family (HUF), which is a type of assesseeA Hindu Undivided Family (HUF), which is a type of assessee

recognised under the Act, consisting of all persons lineallyrecognised under the Act, consisting of all persons lineallydescended from a common ancestor and deriving income fromdescended from a common ancestor and deriving income from

joint family corpus. Hindu, Jain, Buddhist, and Sikh families havejoint family corpus. Hindu, Jain, Buddhist, and Sikh families havebeen so recognised.been so recognised.

An Association of Persons or a Body of Individuals.An Association of Persons or a Body of Individuals. NonNon--corporative taxpayers whose account are to be stautorilycorporative taxpayers whose account are to be stautorily

audited.audited. Those who fall in theThose who fall in the 11--byby--6 category6 category..


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Wealth Tax Chargeable Assets In IndiaWealth Tax Chargeable Assets In India

Wealth tax is chargeable only on theWealth tax is chargeable only on the

following assets:following assets:

Any guest house, residential house, commercialAny guest house, residential house, commercialproperty, urban farm house. However an exception isproperty, urban farm house. However an exception is

provided in this clause regarding the following:provided in this clause regarding the following:

A residential house allotted by a company to an employee,A residential house allotted by a company to an employee,officer or director, drawing annual salary of less than Rs.officer or director, drawing annual salary of less than Rs.200000.200000.

A residential or a commercial house forming part of stock inA residential or a commercial house forming part of stock intrade.trade.

Residential property let out for minimum of 300 days in aResidential property let out for minimum of 300 days in ayear.year.

Commercial house used in own business of the assessee.Commercial house used in own business of the assessee. The implication of this clause is that while wealth taxThe implication of this clause is that while wealth tax

is chargeable on house properties , it is exempt inis chargeable on house properties , it is exempt inrespect of the exceptions provided.respect of the exceptions provided.

Motor car for personal use.Motor car for personal use.


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ContCont

Jewellery, bullion, furniture, utensils or any other articleJewellery, bullion, furniture, utensils or any other articlemade wholly or partly of gold, silver, platinum or anymade wholly or partly of gold, silver, platinum or anyother precious metal or any alloy containing one orother precious metal or any alloy containing one or

more of such precious metals.more of such precious metals.

Provided that where any of the said assets is used byProvided that where any of the said assets is used bythe asses-see as stockthe asses-see as stock--inin--trade, such asset shall betrade, such asset shall bedeemed as excluded from the assets specified in thisdeemed as excluded from the assets specified in this

subsub--clause.clause. Yachts, boats, and airYachts, boats, and air--crafts used for noncrafts used for non--businessbusiness

purposespurposes


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Wealth Tax Rates In IndiaWealth Tax Rates In India

For Individuals And NonFor Individuals AndNon--

SpecifiedHUF'sSpecifiedHUF's Net WealthRate (in per cent).Net WealthRate (in per cent).

On the first Rs. 2,50,000 of net wealthNIL.On the first Rs. 2,50,000 of net wealthNIL.

On the next Rs. 7,50,000 of net wealth1/2.On the next Rs. 7,50,000 of net wealth1/2. On the next Rs. 10,00,000 of net wealth1.On the next Rs. 10,00,000 of net wealth1.

Balance exceeding Rs. 20,00,000 of net wealth2Balance exceeding Rs. 20,00,000 of net wealth2


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Wealth Tax Rates In IndiaWealth Tax Rates In India

For IndividualsAnd NonFor IndividualsAnd Non--

Specified HUF'sSpecified HUF's Net WealthRate (in per cent).Net WealthRate (in per cent).

On the first Rs. 1,50,000 of net wealthNIL.On the first Rs. 1,50,000 of net wealthNIL.

On the next Rs. 3,50,000 of net wealth1.On the next Rs. 3,50,000 of net wealth1. On the next Rs. 5,00,000 of net wealth2.On the next Rs. 5,00,000 of net wealth2.

Balance exceeding Rs. 10,00,000 of net wealth3Balance exceeding Rs. 10,00,000 of net wealth3


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Valuation Of Jewellery In WealhValuation Of Jewellery In Wealh

Tax IndiaTax India Jewellery Includes :Jewellery Includes : Ornaments made of gold, silver, platinum or any other precious metalOrnaments made of gold, silver, platinum or any other precious metal

or any alloy containing one or more of such pre-cious metals,or any alloy containing one or more of such pre-cious metals,whether or not containing any precious or semiwhether or not containing any precious or semi--precious stones, andprecious stones, and

whether or not worked or sewn into any wearing appare.whether or not worked or sewn into any wearing appare. Precious or semiPrecious or semi--precious stones, whether or not set in any furniture,precious stones, whether or not set in any furniture,

utensils or other article or worked or sewn into any wearing apparel.utensils or other article or worked or sewn into any wearing apparel. In support of the valuation of jewellery, the prescribed form to beIn support of the valuation of jewellery, the prescribed form to be

attached with the return is :attached with the return is : Where the value of the jewellery on the valuation date is upto Rs.5Where the value of the jewellery on the valuation date is upto Rs.5

lakhs, a statement in Form No. 0lakhs, a statement in Form No. 0--8A, a prescribed by rule 13(c),8A, a prescribed by rule 13(c),

signed by the assessee, orsigned by the assessee, or Where the value of the jewellery on the valuation date exceeds Rs.5Where the value of the jewellery on the valuation date exceeds Rs.5lakhs, a report of Registered Valuer in Form No.0lakhs, a report of Registered Valuer in Form No.0--8, as prescribed by8, as prescribed byrule 8D.rule 8D.

The report can be the basis for arriving at the valuation for 4The report can be the basis for arriving at the valuation for 4subsequent years. All that is needed is to substitute the value of gold,subsequent years. All that is needed is to substitute the value of gold,silver or any alloy of the base year with that of the relevent year.silver or any alloy of the base year with that of the relevent year.Again, adjustment for purchases and sales made during the releventAgain, adjustment for purchases and sales made during the releventyear will have to be carried out.year will have to be carried out.

Wealth Tax In India

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