1. ARE YOU LIABLE TO
PAY WEALTH TAX ?
BY : WWW.SIMPLETAXINDIA.NET
2. Applicability of Wealth Tax
 Persons covered under Wealth Tax
 An individual and
 Hindu Undivided Family (HUF) and
 a company
 Persons not covered under Wealth tax
 Co-operative Society,
 Companies register u/s 25 of companies Act
 Social club
 Political parties ,
 Mutual Fund registered under section 10(23D) of Income Tax Act.
 Exemption Limit
 Person whose net wealth on the valuation date (i.e. 31st March)
up to Rs 30,00,000 (wef Ay 2010-11) is liable for Wealth Tax
3. Rate of Wealth Tax & Valuation
 Wealth Tax is levied @1% on net wealth in
excess of Rs 30,00,000.
 No cess or surcharge is levied on Wealth Tax.
 Valuation date is March 31 immediately
preceding the Assessment year.
 Net wealth means excess of assets over debts
 Assets includes deemed assets
 Assets do not includes exempted assets
4. Wealth Tax and residential
 A resident and ordinarily resident individual who is an
Indian citizen, a resident and ordinarily resident HUF
and every resident company is liable to Wealth Tax in
respect of world assets (i.e. assets located in India as
well as outside India).
 However, an individual who is not a citizen of India
(may be resident and ordinarily resident or not), a
resident but not ordinarily resident individual/HUF and
every non-resident (may be individual or HUF or
company) is liable to Wealth Tax only in respect of
assets located in India
 Residential status of every person will be ascertained
in the same manner as is determined under Income
5. Assets covered under Wealth Tax
 Motor cars (other than those used by the
assessee in the business of running them on hire
or used by the assessee as stock-in-trade).
 Yachts, boats and aircrafts (other than those used
by the assessee for commercial purposes).
 Jewellery, bullion, furniture, utensils or any other
article made wholly or partly of
gold, silver, platinum or any other precious metal
or any alloy containing one or more precious
metals (other than used by the assessee as
6. Assets covered under Wealth Tax
 Any building or land appurtenant thereto (including a farm
house) situated within 25 kms of a Municipality or Cantonment
 Any residential property which has been let-out for a
minimum period of 300 days in the previous year.
 Any house occupied by the assessee for the purposes of
any business or profession carried on by him.
 Commercial establishments or complexes.
 A house meant exclusively for residential purposes and
which is allotted by a company to an employee or an officer
or a director who is in whole-time employment, having a
gross annual salary of less than Rs 10,00,000.
 Any house for residential or commercial purposes
7. Assets covered under Wealth Tax
(Immovable Property cont…)
 Urban land, other than the following
 Land on which construction is not permissible under
any law for the time being in force; or
 Any land on which construction is done with the
approval of the appropriate authority; or
 Any unused land held by the assessee for industrial
purposes; it will be excluded for a period of two years
from the date of its acquisition by him; or
 Any land held by the assessee as stock-in-trade; it will
be excluded for a period of ten years from the date of
acquisition by him
8. Assets covered under Wealth Tax
Cash in Hand
 In case of an individual and HUF :
 Cash in hand in excess of Rs 50,000
 In the case of a company :
 any amount not recorded in the books of account.
9. Deemed ownership in respect of assets
transferred without consideration
 A person will be treated as deemed owner in
respect of assets transferred by him/her
(without adequate consideration)
 to his/her HUF or
 to his/ her spouse or
 to his/ her son's wife or
 to a person for his/her benefit or for the benefit of
his/ her spouse or for the benefit of his/ her son's
10. Taxability of assets belonging to minor child
 Assets belonging to a minor child will be clubbed
along with the net wealth of his/ her parent.
 No clubbing will be done in respect of assets
belonging to a minor child suffering from any
disability specified under section 8oU of the
Income Tax Act.
 Further, clubbing provisions will not apply in
respect of any asset acquired by the minor out of
income arising to the child by application of
his/her skill, talent or specialized knowledge and
11. Taxability of assets belonging to partnership
 A partnership firm is not liable to Wealth Tax.
 However, value of taxable asset of the firm is
to be computed in the prescribed manner and
the share of each partner in the assets of the
firm will be included along with the net wealth
of each partner.
12. Assets exempt from Wealth Tax
 A person can claim exemption in respect of
 Exemption in respect of one house or part of a
house or a plot of land (not exceeding 500 Sq.
Mtrs.) available to individuals and HUFs.
13. Debt in respect of taxable
 From the total value of taxable assets the
value of debt owed in respect of taxable assets
is to be deducted to arrive at the value of net
14. Return of wealth
 Every individual, HUF and company whose net
wealth on valuation date (i.e. 31" March)
exceeds 30,00,000 shall file the return of
 The due dates for filing the return of Wealth
Tax are same as due dates for filing the
Return of Income specified under section 139
of Income Tax Act (i.e. if assessee is liable to
audit, due date will be 30"‘ September and in
other case the due date will be 31 "July).
15. Belated or revised return
 A belated return or revised return can be filed
within a period of one year from the end of the
assessment year or before completion of
assessment, whichever is earlier.
 Interest @ 1% per month or part of the month
is levied for delay in filing the return of Wealth
16. Major penalties
 Penalty up to 100% of the amount of tax in
arrears can be levied in case of non-payment
of Wealth Tax.
 Penalty in case of concealment of wealth can
be up to 500% of tax sought to be avoided.
17. Wealth Tax :Are you liable to pay ?
 This Slideshow should not be construed as an
exhaustive statement of the law.
 For complete details refer to the Wealth-tax