Many of you probably pay income tax and are aware of provisions of Income tax Act. Salaried employees have their Tax deducted at source so they don't have to worry about paying taxes. Now salaried employees are also exempted from filing return of income if their Total income is less that 5 lakhs, but there is yet another direct tax payable by many called Wealth tax. Many people are liable to pay Wealth Tax but omit to pay it because the collection and recovery mechanism are not as stringent as in Income Tax Act
Read on to find out whether you are liable to pay wealth tax? Are you an assessee in default under Wealth tax
Wealth Tax is payable by Individuals, HUF or Company who's net wealth exceeds Rs 30,00,000.00. This is computed as on 31st March every year.So if during the year an asset coming within the definition is held but as at 31st March it is converted into another form not coming under the definition of asset, then there is not Wealth Tax liability.
Wealth Tax is computed as follows
Assets xxxx
Deemed assets xxxx
Total xxxx
Less: Exempted assets (xxxx)
Gross Wealth xxxx
Less : Debt owed (xxxx)
Net Wealth xxxx
Not all assets are liable to wealth tax. Given below are major inclusions and exclusions for computing net wealth. I will make the detailed computation available soon
Assets include
1. Building used for residential accommodation, as guest house, farm house. Building excludes any building used for the purpose of business, or let out for more than 300 days
2. Motor cars
3. Jewellery,bullion, and furniture utensils and other articles made of precious metals
4. Urban land on which construction can be done with approval of proper authority.
5. Cash in hand in excess of Rs 50,000 in case of individuals and any unaccounted cash in case of Company
Deemed assets means assets transferred for inadequate consideration to spouse, minor child or to any other person for the benefit of spouse of minor child. However if transfer was by way of gift and gift tax was paid then it is not a deemed asset in the hands of transferror.
Certain assets are exempted namely property brought into India by a citizen of India who comes to permanently reside in India from abroad. This exemption is available for 7 years. A plot of land (upto 500sq mtr) or one house property held by an Individual or HUF is also exempted
Any loan or liability directly related to the asset can be deducted.
Read on to find out whether you are liable to pay wealth tax? Are you an assessee in default under Wealth tax
Wealth Tax is payable by Individuals, HUF or Company who's net wealth exceeds Rs 30,00,000.00. This is computed as on 31st March every year.So if during the year an asset coming within the definition is held but as at 31st March it is converted into another form not coming under the definition of asset, then there is not Wealth Tax liability.
Wealth Tax is computed as follows
Assets xxxx
Deemed assets xxxx
Total xxxx
Less: Exempted assets (xxxx)
Gross Wealth xxxx
Less : Debt owed (xxxx)
Net Wealth xxxx
Not all assets are liable to wealth tax. Given below are major inclusions and exclusions for computing net wealth. I will make the detailed computation available soon
Assets include
1. Building used for residential accommodation, as guest house, farm house. Building excludes any building used for the purpose of business, or let out for more than 300 days
2. Motor cars
3. Jewellery,bullion, and furniture utensils and other articles made of precious metals
4. Urban land on which construction can be done with approval of proper authority.
5. Cash in hand in excess of Rs 50,000 in case of individuals and any unaccounted cash in case of Company
Deemed assets means assets transferred for inadequate consideration to spouse, minor child or to any other person for the benefit of spouse of minor child. However if transfer was by way of gift and gift tax was paid then it is not a deemed asset in the hands of transferror.
Certain assets are exempted namely property brought into India by a citizen of India who comes to permanently reside in India from abroad. This exemption is available for 7 years. A plot of land (upto 500sq mtr) or one house property held by an Individual or HUF is also exempted
Any loan or liability directly related to the asset can be deducted.
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