Wealth Tax Overview

Taxcel Professional Services & Consultancy

Bangalore

Ph: +91- 8123570972

www.taxcelservices.com

Applicable Not Applicable

Individual Section 25 Company

HUF Co-operative Society

Company Firm

AOP Chargeable u/s 21AA Local Authority

RBI

Mutual Fund Reg. u/s 10

(23d)

Political Party

Social Club

Who are Chargeable

The wealth of the firm/AOP shall be taxed in the hands of partners/members

Chargeability of Net Wealth

• Wealth Tax is charged @ 1% on the Net Wealth in excess of Rs.30 Lakhs

• Valuation Date is the 31st March immediately preceding the assessment year

Scope of Net Wealth

Before determination of total net wealth one must assess themselves as a Resident or

Non-resident of India as per IT Act 1961 to determine the net wealth.

Situation Assets in India Assets Outside India

Resident – Ordinarily Taxable Taxable

Resident – Not Ordinarily Taxable Not Taxable

Non Resident Taxable Not Taxable

Resident Company Taxable Taxable

Foreign Company Taxable Not Taxable

Asset – Section 2 (ea)

BUILDINGS

• Building whether used for Residential, Commercial, Guest

House are chargeable to wealth tax.

• If Residential House is let out for more than 300 days not

taxable

• Commercial establishment or complexes are exempt

• House occupied for own business or profession is exempt

Asset – Section 2 (ea)

MOTOR CARS

• Motor Cars are taxable

• If used in Business of running on hire not taxable

• If held as stock in trade in the business not taxable

Asset – Section 2 (ea)

JEWELLERY

• Jewellery includes Bullion, or any other article made

with gold,silver,platinum or other precious material

• If such items held as stock in trade not taxable

• Gold Deposit Bonds issued under Gold Deposit

Scheme 1999 not taxable

Asset – Section 2 (ea)

YATCHS, BOATS AND AIRCRAFTS

If these are used for personal use taxable but if used for

commercial/business purpose not taxable.

Asset – Section 2 (ea)

URBAN LAND

• Land situated in municipal limits are taxable

• Land classified as agriculture land not

taxable

• Land on which construction not permissible

not taxable

• Unused land for industrial purpose for 2

years not taxable

• Land held as Stock in Trade upto 10 years

not taxable

Asset – Section 2 (ea)

CASH

• For Individual/HUF amount in excess of Rs.

50,000

• For Others amount not recorded in the books

Determination of Net Wealth

Particulars Amount

Aggregate Value of Assets specified in Sec 2(ea) xxx

Add: Deemed wealth in the assessee’s hands xxx

Less: Aggregate Value of debts against above assets (xxx)

Less: Assets Exempt (xxx)

NET WEALTH XXX

EXEMPTIONS

• Property held under trust for any public charitable or religious nature in India

• Any interest in the HUF property as a Coparcener

• Certain exemptions for Ex- Rules (See Section 5(iii)&(iv)

• NRI’s returning to India – Assets brought by him to India or asset acquired out of

money brought to India, if such acquisition is made prior to one year of return

or any time thereafter, for 7 successive AY’s.

• Individual/HUF – One House or Plot not exceeding 500 sq.m

THANK YOU

Taxcel PSC

Bangalore

www.taxcelservices.com