The wealth tax was enacted in the year 1957 for the assessment of tax from the wealth of an individual, hindu undivided family and any company at 1% where the net wealth in an assessment year exceeds fifteen lakhs. Section44b countries with which no agreement exists. It is a form of direct tax and is levied under the provisions of the wealth tax act, 1957. Wealth tax act 1957 complete act citation 51012 bare. O by the board at the time of his first assessment to wealthtax under the wealth tax act, 1957 27 of 1957, as it. Wealth tax the wealth tax act, which came into force from ay 195758, occupies a place of importance in the scheme of taxation. The words subject to the provisions of subsection 1a, wealthtax shall not be payable by an assessee in respect of the following assets substituted by act 19 of 1970, section 26bi, for wealthtax shall not be payable by an assessee in respect of the following assets w. Declaration under section 18c1 of the wealthtax act, 1957 to be made by an assessee claiming that identical question of law is pending before the high court or the supreme court. Indias tax system involves many different types of taxes and one of them is wealth tax a. Form of appeal to the deputy commissioner appeals and commissioner of wealthtax appeals under section 23 of the. In this part you can gain knowledge on various provisions of wealth tax act, 1957. Wealth tax act, 1957 vthe central government has been empowered by of the union list of the seventh schedule of the constitution of india to levy taxes on the capital value of the assets except on agricultural land. The wealthtax act 1957 indian bare acts india bare act. The wealth tax act, 1957 is an act of the parliament of india which provides for levying of wealth tax on an individual, hindu undivided family huf or company is in possession of, on the corresponding valuation date.
The dtc will replace the incometax act, 1961, and other direct tax legislation like the wealth tax act, 1957. The valuation date for the purpose of wealth tax is 31st day of march of the financial year. Wealth tax act of 1957 provides for the levy of wealth tax. Income tax is levied on the income of the taxpayer, whereas wealth tax is levied on the wealth of the taxpayer. Estate acquisition act, 1958 constitutes an asset under section 2e of the wealthtax act, 1957 even though such compensation is yet to be determined or paid. The wealth tax act, 1957 was an act of the parliament of india that provides for the levying of wealth tax on an individual, hindu undivided family huf or company. As per the wealth tax act, 1957, an individual, a hindu undivided family or a company had to pay a wealth tax of 1% on earnings of over. A wealth tax is applicable to a variety of asset types including cash, bank deposits, shares, fixed assets, personal cars, assessed value of.
Abolition of levy of wealthtax under wealthtax act, 1957 abolition of levy of wealthtax under wealthtax act, 1957. Tax was sought to be levied on nonproductive six assets instead of taxing all the assets subject to certain exemptions. Wealth tax is a direct tax with the aim to reduce the inequalities of wealth. It is not regarded as nonproductive asset from the assessment year 199394 and is, therefore, completely outside the purview of wealth tax. The act applies to the whole of india including the state of jammu and kashmir and the union territories. Net wealth is the aggregate value, computed under the provisions of the w. Wealth tax act 1957 section 5 citation 12416 bare act.
Electronic communication of pdf based gatepass and. The hindu undivided family follows or governed by the mitakshara law is strictly subject to the wealth tax act. Valuation of assets other than cash shall be determined in the manner laid down in schedule iii of the wealth tax act. Here, it is to be noted that wealthtax act, 1957 is abolished w. The wealth tax act, 1957 was an act of the parliament of india that provides for the levying of wealth tax on an individual, hindu undivided family huf or. It was abolished and replaced with 2% additional surcharge levy. Section44a agreement for avoidance or relief of double taxation with respect to wealthtax. Before moving ahead first lets see the assets which fall under the definition of assets as per section 2ea and shall be included in the wealth of a person. Wealthtax under wealthtax act, 1957 abolished wef fy 201516.
This tax was a levy of tax on the net wealth the aggregate value of assets minus the aggregate value of debts or liabilities as on the valuation date of extremely wealthy individuals. In india, wealth tax is the tax required to be paid by anyone whose personal assets exceed rs 30 lakh. Hindu undivided family and company at the rate of 1% of the amount by which the net wealth exceeds rs. Through direct taxes code dtc, the government aims to simplify the structure of direct tax laws in india into a single legislation. App features complete the wealth tax act in digital format. Why has wealth tax been abolished by the union government. This is an item of wealth, which is outside the definition of assets as per section 2 ea of wealth tax act, 1957. Xv of 1963 an act to provided for the levy of wealthtax whereas it is expedient to levy tax on wealth. The wealthtax act, 1957 was enacted to levy wealthtax on value of all kinds of property with certain exclusions.
In exercise of the powers conferred by section 46 of the wealthtax act, 1957 27 of 1957, the central board of revenue hereby makes the following rules, namely. Wealth tax act practising valuers association india. The wealthtax act 1957 in india bare acts, banking and insurance, business and corporate, constitutional, consumer laws, criminal law, energy, environmental, family and inheritance, heritage and national importance, immigration law, labor law, the wealthtax act 1957 national security, others, procedural and administration, property related, public utilities, shipping laws, tax laws. Wealth tax act1957 the wealth tax act, 1957 act no. Section 1, be it enacted by parliament in the eighth year of the republic of india as follows. Published vide notification in the gazette of india, extraordinary, 1957, part 2, section 3 page 2531. Short title, extent and commencement 1 this act may be called the wealthtax act. Act, 1957, of all assets including deemed assets, belonging to the assessee on the valuation date, minus the aggregate value of all debts owed by the assessee on the valuation date which have been taken in relation to the assets attracting wealth tax. Be it enacted by parliament in the eighth year of the republic of india as follows.
It is charged on the net wealth of super rich individuals, companies, and hindu undivided families hufs. However, with a view to stimulate investment in productive assets, wealthtax has been restricted only on the nonproductive assets from 1st april, 1993. The maximum limit of net wealth not chargeable to tax under the provisions of the wealth tax act, 1957 is rs. Incometax is levied on the income of the taxpayer, whereas wealth tax is levied on the wealth of the taxpayer. Wealth tax is charged for every assessment year in respect of the net wealth on the corresponding valuation date of every individual. In this chapter, unless the context otherwise requires, a. Wealth tax is calculated on the market value of the assets owned and every individual and hindu undivided family whose net wealth is greater than rs 30 lakh is liable to pay wealth tax. The wealth tax was levied on the net wealth owned by a person on a valuation date, i. Government as his official residence under paragraph of the merged states. Subject to the other provisions including provisions for the levy of additional wealthtax contained in this act, there shall be charged for every assessment year commencing on and from the first day of april, 1957 but before the 1st day of april, 1993, a tax hereinafter referred to as wealthtax in respect of. Wealth tax is charged on net wealth net wealth total assets total debts 4. Wealth tax is a tax levied on the value of held assets.