WEALTH TAX

Assessees Liable to Wealth Tax (Section 3)

Wealth Tax is charged for every assessment year in the hands of individuals, HUFs and all companies (private as well as public) on the net wealth as on 31st March.

The following assessees are specifically excluded from the levy of Wealth Tax:

1. Company registered u/s. 25 of the Companies Act, 1956
2. Co-operative society
3. Social club
4. Political party
5. Mutual fund specified u/s. 10(23D) of the Income-tax Act.

Charge of Wealth Tax

Wealth tax is levied only on the value of those assets (including deemed assets but excluding exempt assets) as defined u/s. 2(ea) after deduction therefrom of the debts which are incurred in relation to such assets (Liability towards Wealth Tax is not an allowable debt from A.Y. 1993-94) (Circular No. 663 dt. 28.9.93).

Assets shall mean

Description of Assets		Exclusions
a.	Any building or land appurtenant thereto, residential or commercial (including a farmhouse within twenty-five kilometres of municipal limits and a guest house)	In case of a Company, a house meant exclusively for residential purpose; and allotted to an employee, officer or a wholetime Director whose gross annual salary is less than Rs. five lakhs. House (residential or commercial) held as stock-in-trade. House occupied for purpose of business/profession carried on by the assessee. Residential property let out for at least 300 days in the previous year. Commercial establishments or complexes.
b.	Motor Cars	Used for the business of running them on hire or as stock-in-trade.
c.	Jewellery, bullion and furniture, utensils or any other article made of gold, silver, etc.	When used by the assessee as stock-in-trade. Gold Deposit Bonds issued under Gold Deposit Scheme, 1999
d.	Yachts, boats and aircrafts	When used by the assessee for commercial purposes.
e.	Urban Land being land situated in any area within the jurisdiction of a municipality (by whatever name called) or a Cantonment Board with a population of not less than ten thousand as per last preceding Census; or in an area within a distance of not more than eight kilometres from local limits of municipality or Cantonment Board as above and as may be notified by the Central Government in Official Gazette.	Land on which construction is not permissible, Land occupied by any building constructed with the approval of the appropriate authority, Unused land held for industrial purpose for a period of 2 years from the date of acquisition, Land held as stock-in-trade for a period of 10 years from the date of acquisition.
f.	Cash in hand In case of individuals/HUFs: in excess of Rs. 50,000. In other cases: an amount not recorded in the books of account.	— —

Scope (Sec 6)

Status		Assets Includible	Debts Deductible
Resident and Ordinarily Resident
	Citizen	All assets in or outside India	All Permissible Debts in or outside India
	HUF-Ordinarily Resident	As above	As above
	Company-Resident	As above	As above
	Non-Citizen	All assets in India	All Permissible Debts in India
Resident but not Ordinarily Resident
	Citizen/Non-Citizen	As above	As above
Non-Resident
	Citizen	As above	As above
	Non-Citizen	As above	As above

Rates

Wealth Tax is charged in respect of Net Wealth of every Individual, HUF and Company @ 1% of the amount by which the Net Wealth exceeds Rs. 30 lakhs.