Items Exempted From Wealth Tax

22 Jan

Posted by Shyam as Tax

Wealth tax being a direct tax is imposed at the rate of 1% on the net assets over and above Rs. 15 lakh. Whereas, filing wealth tax return date is very much common to that of filing income tax return. The wealth tax is filed in form “BA” and has to be submitted on relevant date.

The previous article on wealth tax mentions the taxable items however, there are few items which are exempted and not included in the list.

Following items are related to building and is exempted

1) House allotted by company to its whole time employee drawing an annual gross salary of less than Rs. 5 lakh, for residential purpose

2) Houses mend for residential or commercial purposes forming a part of stock-in-trade

3) Any house acquired by the payer with an intention of conducting any business of profession of his own

4) Residential asset let out for a minimum period of 300 days in the previous year

5) Any asset involving a nature of a Commercial establishment or complexes

Motor car used by the tax payer for business purpose or running them on hire basis or stock-in-trade.
Urban land

1) Any urban land on which construction of building is not allowed under any law as of now

2) Land occupied by any building constructed with the prior consent of the responsible authorities

3) Any land acquired by the tax payer for industrial purpose, left unused for a period of 2 years from the date of acquisition

4) Any land owned by tax payer as stock-in-trade for a period of 5 years from the date he has acquired it

5) Property held by a trust or held for any legal obligation towards public for any charitable or religious cause in India

6) Furniture, apparels and electronic items for personal use.

7) Coparceners interest in a HUF property

8) Jewellery belonging to former Ruler, except his personal jewellery, identified by Central Government before 01-04-1957 or by CBDT after this date as a part of ancestral property

9) Residential building and palaces belonging to former Rulers

10) Property belonging to Indian repatriates who have returned back to India with an objective of staying permanently in India are out of the purview of wealth tax for 7 years and include the following,(a) can brought into India(b) value of property brought into India(c) cash held in any non-resident account in any bank in India on the date of his return to India(d)a house or a part of house, plot of land belonging to an individual or HUF(e)any investment in shares, debentures, UTI mutual funds are exempt from wealth tax.