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I am paying income tax. Still do I have to pay wealth tax? If yes, please advise as to:
- When & how Wealth tax is payable?
- What are the exemptions like personal jewellery, ancestral house property, post office deposits etc?
- What are the wealth tax slabs? [Syam Sundar, Jabalpur (MP)-email@example.com]
Income tax isn’t all, there is wealth tax too if the net wealth exceeds Rs. 30 Lacs. The tax is to be paid on the market value of the assets year after year. The only fine part is that that wealth tax is normally payable only on what is termed as ‘unproductive assets’. Resultantly, assets such as shares, securities, mutual funds, fixed deposits etc which are ‘productive assets’ are exempt from wealth tax.
About wealth tax, it may be noted that:
- Wealth tax is charged for every assessment year on the “Net wealth” of every individual, HUF and company. It is charged @1% on the amount by which the net wealth exceeds Rs.30 Lacs-. All taxpayer with “Net Wealth” exceeding Rs. 30 Lacs are liable to pay wealth tax & file wealth tax return on or before the due date
except (i) Companies registered under Section 25 (ii) Co-operative society (iii) Social club (iv) Political party (v) Mutual fund specified u/s 10 (23D) of the I.T. Act.
- Broadly, “Net Wealth” as mentioned above, is the difference between aggregate value of assets [What is “assets” is mentioned in “c” below] and the value of all debts owed by the assessee on the valuation date which have been incurred in relation to the said assets. There is no separate rate for individual items of the assets. Valuation date means the 31st March of the relevant year.
- For levy of wealth tax as mentioned in (b) above, Assets, in general, means:
House- Any building or land appurtenant thereto whether used for residential or commercial purposes or for the purpose of maintaining a guest house or a farm house in an urban area except the following:
i] A residential house, if the following conditions are satisfie:
- It is meant exclusively for residential purposes
- It is allott by a company to an employee/officer or director in whole time employment
- The gross annual salary is less than Rs. 10 Lacs in case of such employee/ officer/director.
ii] A house held as stock-in-trade.
iii] A house used for own business or profession.
iv] A house which is let out for a minimum period of 300 days in the previous year.
v] One or more property in the nature of commercial establishments or complexes.
- Motor cars except those which is use in the hiring business or held as stock-in-trade.
- Jewellery, bullion, utensils of gold, silver etc except those which is held as stock-in-trade
- Yachts, boats and aircrafts-other than those used for commercial purposes.
- Urban land-any land situated in urban area except the following:
- Land on which construction of a building is not permissible under any law.
- Land occupi by any building which has been construct with the approval of the appropriate authority.
- Unused land held for industrial purposes up to 2 years
- Land held as stock-in-trade up to 10 years.
- Land classified as agricultural land in the records of the Government and used for agricultural purposes.
- Cash in hand-
a] For individuals and HUF’s, in excess of Rs.50,000/- and
b] in the case of any other person, any amount not recorded in the books of account.
- Income Tax department has amende Wealth Tax Rule with Return Form i.e. “Form-BB” for Wealth Tax Return vied notification Date 23rd June, 2014 as a result of which return is require to be furnish electronically under digital signature. However, for assessment year 2014-15, an individual or HUF to whom the provisions of section 44AB of the Income-tax Act, 1961 are not applicable, may furnish this return in paper form. From the assessment year 2015-16 and subsequent assessment years, this return form shall be furnish by all assessees electronically under digital signature.
I am assistant professor in an engineering college based in Nagpur. On viewing my income tax e-filing return account on 04th Sep 2014, I received a message from income tax office asking to pay for “outstanding tax demand amount Rs. 13,610/ for A.Y.2010-11 (Date of demand – 23/02/2011) and Rs 12,700/- for A.Y. 2011-12 (Date of demand – 28/02/2013) under section 143(1)(a). I have already filed return for above mentioned A.Y. with total tax of Rs. 11,286 for AY 2010-11 & Rs 10,030/- for AY 2011-12 respectively and have received acknowledgement slip. I could not understand what the meaning of this message. In form No. 16, for above mentioned A.Y’s, detail of TDS and tax deposited to ITO is also there. To my surprise, on viewing form 26 AS for above A.Y., I found that no entries of taxes deposited are there. Kindly suggest me what should I do to overcome the problem? [firstname.lastname@example.org]
Your 26AS is not reflecting the amount of TDS done by your employer in the relevant assessment years. The reasons are quiet obvious. Employer has not correctly or properly filed the TDS return. You may approach the employer for filing of the corrected TDS return for the relevant assessment years. After filing, TDS amount would be reflecte in your 26AS statement.
Further against the intimation u/s 143(1)(a) for the relevant assessment years, you are advise to e-file the rectification applications under section 154 of the Income Tax Act-1961 mentioning the fact of non-credit of TDS done by your employer in your account as the reason for present rectification application.
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