\a|'| Iax /'.

I`
1.1 Synops|s :- Wea|th tax Act, 19S7
1he CenLral CovernmenL has been empowered by of Lhe unlon LlsL of Lhe Seventh Schedu|e of
LheConsLlLuLlon of lndlaLo levyLaxes on LhecaplLal valueof LheasseLs excepL on agrlculLural land.
Whenever asseLs areldle, Lax ls levled on valuaLlon daLe on LheneL wealLh of aperson .
valuaLlon daLe ls Lhe lasL day of Lhe flnanclal year. 1he asseL should be avallable wlLh Lhe
assessee as on Lhe relevanL valuaLlon daLe for chargeablllLy Lo wealLh Lax and Lhe AcL exLends Lo whole of
lndla.
neL wealLh refers Lo :
Lntry 86
Sec 2(ea) Sec 2(q) Sec 2(m) Sec 3
Sect|on 2(q):
Sect|on2(m):
WealLh Lax ls chargeableonly lf Lhevalueof neL wealLh , aL LheraLeof one percent on Lhe
neL wealLh. Surchargeand LducaLlon Cess are NC1 |ev|edon wealLh Lax.

WealLh Lax ls Lo lndlvlduals Plndu undlvlded famlly Company
SecLlon 4(1)(b) arLner/member of aflrm/AC ln respecL of Lhelr lnLeresL ln Lhevalueof LheasseL held.
As per Ceneral Clause AcL, Lhe Lerm lndlvldual lncludes lndlvlduals, hence LrusLees of prlvaLe LrusL
maybecharged Lo WealLh Lax, ln respecL of LrusL asseLs.
As asslgned ln Lhe lncome 1ax AcL, 1961, a company lncorporaLed ouLslde lndla wlll be llable
Lo wealLh Lax ln respecL of asseLs speclfled u/s 2(ea), locaLed ln lndla.
WealLh Lax ls wlLh respecL Lo neL wealLh of:
exceeds 30|akhs
Sec 2(h)
Sect|on 3: app||cab|e (|) (||) (|||)
(|v)
Sect|on2(h):
Sect|on4S: not app||cab|e
(l) AsseLs as speclfled - u/s 2(ea) xxx
(ll) Add: ueemed asseLs - u/s 4 xxx
(lll) Less: LxempLed asseLs - u/s 3 (xx)
(lv) Less: uebL lncurred (ln lndla or ouLslde lndla) ln relaLlon Lo asseL (xx)
neL wealLh - u/s 2(m) xxx
(i) ollLlcal parLy
(ll) uLual fund speclfled u/s 10(23u) of lncome Lax AcL, 1961
(lll) o-operaLlve socleLy
(lv) ompany reglsLered u/s 23 of Lhe Companles AcL, 1936
(v) oclal LrusL
(vl) eserve 8ank of lndla. {(ketrospect|ve w.e.f. 01.04.19S7)(I|n. Act, 2012)}

M
C
C
S
k

CHAPTER - 1
CnlyLhoseasseLs whlch arespeclfled under Lhls secLlon arechargeableLo wealLh Lax. ln Lhe
llsL Lwo asseLs are lmmovable properLles namely urban land and bulldlng. 1he remalnlng are movable
properLles. 1hespeclfled asseLs are
Sect|on2(ea):
Biiect Tax Laws - Quick Insight
2
8ules are glven for valuaLlon of asseL u/s 2(ea), ln Schedule lll of wealLh Lax AcL. Speclflc valuaLlon rules
apply for bulldlng and !ewellery. Where Lhere ls no speclflc rule for valuaLlon, apply 8ule 20, whlch
speclfles LhaL valuewould be rea||zab|e va|uelf sold ln Lheopen markeL on valuaLlon daLe.
1hellablllLyLo wealLh Lax arlses ouL of of LheasseL and noL bymerepossesslon. ownersh|p
8u||d|ng (compleLed bulldlng and noL unflnlshed bulldlng) used for resldenLlal commerclal purpose
malnLalnlng as a guest house (regardless of dlsLance) or oLherwlse a farm house slLuaLed wlLhln
23kllomeLers from Lhelocal llmlLs of anymunlclpallLy.
1hefollowlng arenoL LreaLed as an asseL.
ares|dent|a| houseexcluslvelyused for resldenLlal purpose
a res|dent|a| house owned by Lhe company a||otted to an employee or an offlcer or a dlrecLor,
who ls ln fu|| t|me employmenL hls gross annual salary should be |ess than 10 lakhs.
ares|dent|a| houseleL ouL for amlnlmum perlod of 300days ln Lheprevlous year.
any houseused as sLockln Lrade.
anyhouseother thanresldenLlal houseused for own buslness or professlon.
any property ln Lhe naLure of commerc|a| estab||shment (or) complex (Lx. Any facLory bulldlng or
godown)
All commerclal properLles such as offlce bulldlng, shops, godown, and warehouse are noL chargeable Lo
wealLh Lax.
1he ls LherelevanL daLe.
A guesL house ls always chargeable Lo wealLh Lax . ulsLance speclflcaLlon ls only for
farm house.
valuaLlon of properLyunder of Schedulelll of W1 AcL ls Lo bedoneas follows.
(or)
(or) (or)
Lxc|us|on:
(and)
(and)
{w.e.f. 01.04.2012}
date of execut|onof sa|e deedof house property
regard|ess of d|stance
ku|e 3to 8
Sect|on Nature of asset Va|uat|on
2 (ea) (l) 8ulldlng 8ule 3 Lo 8 of Schedule lll of W1 AcL
2 (ea) (ll) MoLor car 8ule 20 of Schedule lll of W1 AcL
2 (ea) (lll) !ewellery 8ule 18 and 19 of Schedule lll of W1 AcL
2 (ea) (lv) ?achL, boaLs, alrcrafL 8ule 20 of Schedule lll of W1 AcL
2 (ea) (v) urban Land 8ule 20 of Schedule lll of W1 AcL
2 (ea) (vl) Cash ln hand 8ule 20 of Schedule lll of W1 AcL
1.2 Sect|on 2(ea)(|): Any bu||d|ng or |and appurtenant thereto

WeaIlh lax Acl, 1957

3
5tcp DcscrIptInn Amnunt
2 ku|e 4: Net Ma|nta|nab|e kent: (NMk)
3 ku|e 3: Cap|ta||zat|on va|ue of property:
1 ku|e S: Gross Ma|nta|nab|e kent: (GMk)
W
h
|
c
h
e
v
e
r

|
s

h
|
g
h
e
r
|
s

G
M
k
(l) Annual value of properLy as per munlclpal records. xxx
(ll) 8enL acLually recelved or recelvable - wheLher leL ouL whole year or noL.
Ad[ustment for:
Add: munlclpal Laxes borne by the tenant.
1
Add: ] of acLual renL pald by LenanL, lf repalr expendlLure borne by tenant.
9
Add: 1S p.a. on Lhe amounL of securlLy deposlL ouLsLandlng from monLh Lo monLh
tota| prem|um
Add: premlum on leaslng of Lhe properLy ( / )
|ease per|od
Ad[usLed renL recelved xxx
WhereLheLenanL commlLs defaulL ln paymenL of renL and makes parL paymenL, LheCM8 shall beLaken as
LheamounL payableas per agreemenL.
roperLy
CaplLallsaLlon value as per rule 3 or orlglnal cosL of acqulslLlon/consLrucLlon cosL of
lmprovemenL, ls consldered.
for hlgher valueconslderaLlon, lf condlLlons aresaLlsfled.
(a) Cne res|dent|a| houseexcluslvelyusedbyassesseeLhroughouL Lheperlod of 12monLhs.
(b) Crlglnal cosL of acqulslLlon/consLrucLlon p|us cosL of lmprovemenL does not exceed 25 lakhs. (Conslder
30lakhs ln casehousels slLuaLed ln Mumbal, CalcuLLa, Chennal, uelhl)
1he benef|t of except|onls avallable for excluslvely used by assessee LhroughouL Lhe perlod of
12monLhs. 1hemaln focus ls on usageand .
acqu|redafter 31.03.1974
(|) (||) p|us
wh|chever |s h|gher
Lxcept|on a|| the fo||ow|ng
one house
not anownersh|p
lf un-bullL areals greater thanspeclfled area, Lhen rule6ls appllcable
refers Lo Lhe ploL of land on whlch Lhe properLy ls consLrucLed. Mumbal, CalcuLLa,
Chennal, uelhl - 60 of aggregaLe area speclfled clLles(meLro clLles) - 63 of aggregaLe area oLher
clLles -70 of aggregaLearea
refer Lo speclfled area un-bullL area.
Spec|f|ed area (a)
(b) (c)
Aggregate areas p|us
(l) Cross MalnLalnable 8enL as per rule 3 xxx
(ll) Less: Laxes levled Lo munlclpal auLhorlLy (whoever has pald, conslder full value) (xx)
(lll) Less: 13 of Cross MalnLalnable 8enL. (xx) xxx
(l) lreehold land nM8 x 12.30
(ll) Leasehold land and lease perlod ls 30 years or more nM8 x 10.00
(lll) Leasehold land and lease perlod ls less Lhan 30 years nM8 x 08.00
roperLy acqu|red on or before 31.03.1974
4 ku|e 6: Add ad[ustment for un-bu||t area.(no bulldlng has been erecLed)
Biiect Tax Laws - Quick Insight
4
roperLy bullL on lease hold |and Laken from CovernmenL CovernmenL ls enLlLled Lo recover
speclfled percenLageof unearned lncreaseln valueof such land aL LheLlmeof Lransfer of properLy
(and)
6
valuelL would derlveln Lheopen markeL, lf sold on valuaLlon daLeln Lhefollowlng slLuaLlon.
(i) Where lL ls noL pracLlcable Lo apply 8ule 3 Lo 7 havlng regard Lo facLs and clrcumsLances of case, Lhe
assesslng offlcer wlLh mayadopL Lhls rule
(ll) unbullL area Speclfled area=exceeds 20 of aggregaLearea
(lll) roperLy consLrucLed on a leasehold land and lease from valuaLlon daLe and
no opLlon of renewal exlsLs.
Mr. 8a[esh has a properLy ln Chennal, whlch was consLrucLed ln 1991 aL a cosL of
40 lakhs. 1he properLy was vacanL for lasL 3 years and leL ouL from 01.01.2013 onwards for monLhly renL
of 30,000 for a perlod of 3 years. CorporaLe Lax 30,000 per quarLer, securlLy deposlL from LenanLs
100,000, premlum 120,000. Land 4000sfL. lL has Lhreefloors each measurlng 960sfL.
ku|e 8: Market va|uat|on
pr|or approva| of Io|nt Comm|ss|oner (or)
|ess (or)
exp|res w|th|n 1S years
rov|s|on I||ustrat|on:
S.No. Defau|t ku|e 6 add|t|on
(a) ermlsslble defaulL up Lo 3 nlL
(b) 6 Lo 10 20 of caplLallzaLlon value as per 8ule 3
(c) 11 Lo 13 30 of caplLallzaLlon value as per 8ule 3
(d) 16 Lo 20 40 of caplLallzaLlon value as per 8ule 3
(e) Above 20 Apply 8ule 8
(i) value as deLermlned afLer ad[usLmenL of 8ule 6 xxx
(ll) Less: amounL recovered by CovL. auLhorlLy (or) 30 of value as
deLermlned afLer ad[usLmenL of 8ule 6, (xx)

Va|ue of |mmovab|e property xxx
whlchever ls |ower
uefaulL = x 100

un-bullL area - speclfled area

aggregaLe area
5 ku|e 7: Deduct unearned |ncrease |n the va|ue of |and
ku|e Descr|pt|on Computat|on Amount()
3 3 12
3 Cross MalnLalnable 8enL = [(30,000 x 3) + ( 120,000/3 x / ) + (100000 x13x / )} = 103,730 x / 413,000
12 12 3
4 neL MalnLalnable 8enL = 413,000 - [(120,000 + 413,000 x 13)} 232,730
3 CaplLallzaLlon value = 232,730 x 12.30 (or) 40,00,000, whlchever ls hlgher 40,00,000
6 un-bullL area ad[usLmenL = AggregaLe area 4000sfL, Speclfled area 4000 x 60= 2400sfL,
8ulld up area 960sfL, unbullL area 4000 - 960 = 3040 sfL. So,
excess of un-bullL area over speclfled
640
area = ( / ) x 100 = 16 = 40 lakhs x 40 16,00,000
4000
7 unearned lncrease ln land nlL nlL
Va|ue of nouse roperty for wea|th tax purpose S6,00,000
WeaIlh lax Acl, 1957
5
1hefollowlng LreaLed as asseLs.
used byLheassesseeln Lhebuslness of runnlng Lhem on hlre.
1reaLed as sLockln Lrade.
MoLor car used ln buslness or professlon, personal moLor car llableLo wealLh Lax.
MoLor car covers all moLor vehlcles except heavy veh|c|e.
Maln focus of LhesecLlon ls . Car madeln lndlaor ouLsldelndlals lrrelevanL facLor.
no speclflc rulefor valuaLlon. Pence lf sold ln Lheopen markeL on valuaLlon daLe.
Lxc|us|on: are not
asset |nInd|a
ku|e 20- rea||zab|e va|ue
1hefollowlng LreaLed as asseLs.
Cold deposlL bonds lssued under Cold deposlL scheme, 1999.
1reaLed as sLockln Lrade.
lurnlLure, uLenslls and oLher arLlcles are LreaLed as asseLs only lf Lhey are made wholly or parLly of gold,
sllver or anyoLher preclous meLal.
valuaLlon of asseLs under of Schedulelll of W1 AcL areas follows:- 8eallzablevaluelf sold ln
Lheopen markeL on valuaLlon daLesub[ect to fo||ow|ng cond|t|ons.
8eLurn of neL wealLh (8CW) along wlLh a , where value of [ewellery does noL exceed
300,000.
8eLurn of neL wealLh (8CW) along wlLh a , wherevalueof [ewellery exceeds 300,000.
Lxc|us|on: are not
ku|e 18and19
statement
report
1.3 Sect|on 2(ea)(||): Motor car
1.4 Sect|on 2(ea)(|||): Iewe||ery, bu|||on, furn|ture, utens||s of go|d, s||ver etc.















ROW> 500,000

s as per 'AO'- fair market value
exceeds = ROW+ 33
1
/3%
Refer case to
valuation officer




s as per 'AO' fair
market value exceeds
= ROW+ 50,000

Value as per ROW

s as per 'AO' fair market
value exceeds = ROW

Refer case to
valuation officer

Value as per ROW

Value as decided by valuation officer

is Final


5cctInn 16A: rcfcrcncc tn va!uatInn nffIccr In rcspcct nf jcwc!!cry
Biiect Tax Laws - Quick Insight
6
When Lhe value of [ewellery has been deLermlned by valuaLlon offlcer, such value ls Laken for Lhe
sub[ecL Lo followlng Lwo ad[usLmenLs.
Where Lhe [ewellery lncludes gold or sllver or any alloy of Lhese, Lhe value as deLermlned by
valuaLlon offlcer, shall besubsLlLuLed for LhaL assessmenL year.
WhereaddlLlon or deleLlon ls madeLo LheabovellsL, ad[usLmenL carrled ouL for valuedeLermlned by
valuaLlon offlcer.

lfassesslngofflcerlsofoplnlonLhaLLhevaluesoreLurnedlslessLhanLhefa|rmarketva|ue
1
lf falr markeL valueof LheasseL exceeds by 33 / or 30,000over Lhevalueof such asseL as adopLed
3
byassessee
havlng regard Lo Lhe naLure of Lhe asseL and Lhe oLher relevanL facLors, lL ls necessary Lo make a
reference
lf assessee has not furn|shed hls reLurn of neL wealLh even lf wealLh ls ln excess of baslc exempLlon
llmlL assesslng offlcer proceeds Lo make besL [udgmenL assessmenL afLer opporLunlLy of belng
heard markeL value of asseL ls Lo be Laken lnLo accounL ln such assessmenL, he may refer Lo Lhe
valuaLlon offlcer u/s 16A.
Schedule lll valuaLlon rules are creaLlon of sLaLuLe. 1he valuaLlon offlcer ls bound Lo follow Lhe rules of
valuaLlon. Ia|r market va|ue of any asseL ls Lo be Laken lnLo accounL ln respecL of assessmenL, lf assesslng
offlcer referred LhecaseLo LhevaluaLlon offlcer.
subsequent four assessment year
Sect|on16A: reference to va|uat|onoff|cer |nrespect of assets other than[ewe||ery.
(or)
(or)
(or)
(and)
(and)
{(Inre 8harat nar| S|nghan|a)(SC)}
1hefollowlng LreaLed as asseLs.
1hose asseLs whlch are used by Lhe assessee for Lhe commerclal purpose.(oLher Lhan personal
purpose)
undersLand LreaLmenL of moLor car and alrcrafL. MoLor car used ln buslness or professlon ls llable Lo
wealLh Lax buL yachLs, boaL and alrcrafL used for buslness or professlon ls noL llable Lo wealLh Lax. Lx.
AlrcrafL owned byAlr lndlaarenoL llablebuL alrcrafL owned byMr. uhonl ls llableLo wealLh Lax.
no speclflc rule for valuaLlon. Pence lf sold ln Lhe open markeL on valuaLlon
daLe.
Lxc|us|on: are not
ku|e 20 - rea||zab|e va|ue
1.S Sect|on 2(ea)(|v): achts, 8oats and a|rcrafts
A land slLuaLed wlLhln Lhe [urlsdlcLlon of a munlclpallLy populaLlon ls more Lhan 10,000 as per lasL
census wlLhln 8 kms from Lhe [urlsdlcLlon of a munlclpallLy speclfled by noLlflcaLlon ln offlclal
CazeLLe.
1hefollowlng LreaLed as asseLs.
Land on whlch consLrucLlon of a bulldlng ls under any law for Lhe Llme belng ln
force.
1heland occupled byanybulldlng whlch has been .
any held by assessee for lndusLrlal purpose for a perlod of from Lhe
.( )
Land LreaLed as for aperlod of from LhedaLeof acqulslLlon.
8ulldlng under consLrucLlon ls nelLher LreaLed as bulldlng nor urban land u/s 2(ea).
no speclflc rule for valuaLlon. Pence lf sold ln Lhe open markeL on valuaLlon
daLe.
(and)
(or)
Lxc|us|on: are not
not perm|ss|b|e
constructedw|thre|evant approva|
unused |and two years date of
acqu|s|t|on noLe: noL LhedaLeof approval
stock |ntrade tenyears
{(In re Neena
Ia|n)(2011)(&n)}
ku|e 20 - rea||zab|e va|ue
1.6 Sect|on 2(ea)(v): Urban |and

WeaIlh lax Acl, 1957

7
ln case of , cash 30,000.
lor , any amounL ln books of accounL.
Cash aL bank and bank balances are noL covered under Lhls provlslon.
an |nd|v|dua| and nUI |n excess of
any oLher person not recorded
1hls rule ls appllcable Lo , who are carrylng on buslness and malnLalnlng accounLs
regularly.
WealLh Lax ls appllcable Lo lndlvlduals Pul Company, buL 8ule 14 ls exLended Lo all assessees.
1o conclude, for oLher assessees, asseLs speclfled u/s 2(ea) ls Lo be Laken lnLo accounL as per 8ule 14, lf
assesseecarrylng on buslness and malnLalnlng accounLs regularly.
a|| assessees
(|) (||) (|||)
1.7 Sect|on 2(ea)(v|): Cash |n hand
1.8 ku|e 14: Va|uat|on of assets of bus|ness
5tcp DcscrIptInn
1 Determ|ne the va|ue of assets d|sc|osed |n the ba|ance sheet on the va|uat|on date as fo||ows
1ype of an asset Va|uat|on
(a) uepreclable asseLs WrlLLen down value
(b) non depreclable asseLs 8ook value.
(c) Closlng sLock value adopLed for lncome Lax purpose.
2 Determ|ne the va|ue of assets as per va|uat|on ru|es
Sect|on Nature of asset Va|uat|on
2 (ea) (l) Pouse 8ule 3 Lo 8 of Schedule lll of W1 AcL
2 (ea) (ll), (lv) Lo (v) MoLor car, ?achLs, boaLs,
alrcrafL, urban Land 8ule 20 of Schedule lll of W1 AcL
2 (ea) (lll) !ewellery 8ule 18 and 19 of Schedule lll of W1 AcL
3 Va|ue of an asset
4
on asseLs |nc|uded|nthe net wea|tharededucLlble.
1hellablllLyof wealLh Lax ls persona| ||ab|||ty of Lheassesseeand noL LreaLed as debL.
uebL lncurred ln relaLlon Lo asseLs ls onlydeducLlble.
lf debL ls lncurred on acqulrlng an asseL as we|| as non-asseL, and lL ls noL posslble Lo compuLe Lhe debL
uLlllzed for acqulrlng LheasseL Lhen,
erm|ss|b|e deduct|onfor va|ue der|vedas per Step-3
Debts |ncurred
chargeab|e to wea|thtax
the amount of debt deduct|b|e |s computedas fo||ows:
(a) 100 of sLep-2 value exceeds 120 of sLep-1 value Conslder sLep-2 value.
(b) 100 of sLep-2 value does not exceed 120 of sLep-1 value Conslder sLep-1 value.
1he above exerclse ls Lo be carrled ouL for each asseL lndlvldually.
1oLal debL of Lhe buslness x
AcLual cosL of asseL
AcLual cosL of asseL & non-asseL
Biiect Tax Laws - Quick Insight
8
llnd ouL net wea|thof the f|rm/AC/8Cl as per 8ule-14. Do not cons|der exempt|onu]s S.
neL asseLs of Lhe flrm Lo Lhe exLenL of caplLal are Lo be allocaLed ln
8emalnlng porLlon of neL wealLh of flrm parLner's raLlo (or) proflL sharlng raLlo.
llrm has asseLs locaLed ln lndla 33 lakhs and asseLs locaLed ouLslde lndla 15 lakhs.
1he flrm has Lwo parLner Mr. & Mr. C, wlLh caplLal conLrlbuLlon of 7.30 lakhs and
2.30lakhs respecLlvely. 1helr proflL sharlng raLlo ls 3:1.
1hevalueof neL worLh of flrm ls 30lakhs.( 33lakhs + 13lakhs)
3/
1hevalueof lnLeresL of parLner ls deLermlned as Mr. = 7.30lakhs + 40lakhs x = 37, 30,000and for
4
1/
Mr. C= 2.30lakhs + 40lakhs x = 12,30,000
4
Step-1:
SLep-2: proport|on of cap|ta|
contr|but|on.
Step-3: basedon
rov|s|on I||ustrat|on:
1.9 ku|e 1S, 16: va|uat|on of partner]member |nterest |n a f|rm or assoc|at|on of persons
Llfe lnLeresL valuaLlon arlses only lf llfe lnLeresL ls (l.e. resldenLlal house and
urban land) and such asseL ls Lo Lheassessee.
llnd ouL average net annua| |ncomedurlng 3years ended on valuaLlon daLe.
: llnd ouL average net annua| expenses durlng 3years ended on valuaLlon daLe.
average annua| |ncome = [sLep-1value |ess (sLep-2 value or 3 of sLep-1value,whlchever ls
lower)}
Llfe lnLeresL = SLep-3 x llfe mulLlpller.(always provlded ln examlnaLlon slmllar Lo annulLy
facLor)
1hevaluedeLermlnedaspersLep-4lsresLrlcLedLovaluedeLermlnedasperSchedule-lll ofLheAcL.
Mr. radumna aged 43 years has a properLy ln LrusL glvlng whole llfe lnLeresL. 1he
average lncome from properLy durlng 3 years ls 70,000 and relaLed year average expenses are 3,300
(belng 3 of average lncome). Pence neL average annual lncome ls 66,300. So, value of llfe lnLeresL ls
worked ouL as 66,300x 9.267( llfefacLor for 43years) = 6,16,233.
he|d |n |mmovab|e property
generat|ng |ncome
Step-1:
Step-2
Step-3:
Step-4:
rov|s|on I||ustrat|on:
1.10 ku|e 17: Va|uat|on of L|fe Interest
WeaIlh lax Acl, 1957
9
When asseLs are Lransferred Lo anoLher person , secLlon 4 ls aLLracLed and
neL wealLh of Lheassesseeshall lncludeLhevalueof asseL belng Lransferred ln Lhehands of Lransferor.

roperLyLransferred dlrecLly(or) lndlrecLlywlLhouL adequaLeconslderaLlon
8elaLlonshlp of husband and wlfe should subslsL boLh aL Lhe Llme of Lransfer and on valuaLlon
daLe
LxcepLlon: When Lransfer Lakes placeln connecLlon wlLh an agreemenL Lo llveaparL.

AsseLs acqulred by a mlnor chlld ouL of lncome whlch arlses or accrues Lo hlm on accounL
of any manual work any acLlvlLy lnvolvlng appllcaLlon of hls sklll LalenL or speclallzed
knowledge asseLs held by m|nor daughter asseLs held by mlnor chlld sufferlng from
anydlsablllLyu/s 80u of l1 AcL.
lL wlll be clubbed ln Lhe hands of Lhe parenL whose neL wealLh ls greaLer before lncludlng mlnor's
asseL, ln caseparenL's marrlagesubslsLs (or) ln Lhehands of parenL who malnLalns Lhemlnor chlld, ln
caseparenL's marrlagedoes noL subslsL.

1heasseL ls Lransferred under arevocable(rlghL Lo reassumepower) Lransfer
ln case of lrrevocable Lransfer lL shall be lncluded ln Lhe neL wealLh of Lransferor as and when Lhe
power Lo revokearlses Lo hlm.

1heasseL ls Lransferred dlrecLly(or) lndlrecLlyfor lnadequaLeconslderaLlon.
8elaLlonshlp of faLher ln law/moLher ln law/daughLer ln law should subslsL boLh aL Lhe Llme of
Lransfer and on valuaLlon daLe.

1heflrm ls noL llableLo wealLh Lax. lnLeresL ls clubbed ln hands of parLners/member of a flrm/an AC
as per 8ule- 13, 16.
ln case a mlnor ls admlLLed Lo Lhe beneflLs of parLnershlp flrm, Lhe value of lnLeresL of such mlnor ln
LheasseLs of Lheflrm wlll belncluded ln LheneL wealLh of LheparenL as per SecLlon 4(1) (a).

lf donor (Lransferor) proves Lo Lhe saLlsfacLlon of Lhe assesslng offlcer LhaL money has acLually been
dellvered Lo Lhedonee(Lransferee), clubblng provlslon ls noL appllcable.

an asseL belonglng Lo an lndlvldual and hels amember of Pul.
any share recelved by spouse of an lndlvldual on such parLlLlon shall be deemed as lndlrecL Lransfer
of asseL byLhelndlvldual Lo spouse
such properLy whlch ls lncluded ln Lhe hands of an lndlvldual or spouse of Pul shall be excluded ln
PulneL wealLh compuLaLlon
clearly speclfles LhaL where a parLlal parLlLlon has Laken place afLer 31.12.1978, such
famllyshall conLlnueLo bellableLo beassessed as lf no such parLlal parLlLlon has Laken place.
w|th|nadequate cons|derat|on
Sect|on4(1)(a)(|) : Ind|v|dua| to spouse
Sect|on4(1)(a)(||): Ind|v|dua| to M|nor ch||d(|nc|ud|ng stepch||dandadoptedch||d)
Lxcept|on:
(a) (b)
(c) marr|ed (d)
Sect|on4(1)(a) andSect|on4(S): Ind|v|dua| to Any person(or) AC
Sect|on4(1) (a) (v) and(v|) : Ind|v|dua| to Son's w|fe
Sect|on4(1) (b): Interest of partner]member |nassets of f|rm]Assoc|at|onof persons
Sect|on 4 (SA): 1ransfer |s made by way of g|ft of money, by means of entr|es |n books of account by any
personw|thwhom the assessee has bus|ness re|at|onsh|p
Sect|on4(1A): Ind|v|dua| member |nnUI to nUI
Sect|on 20A
1.11 Sect|on 4: Deemed asset
1.12 Sect|on S: Lxempted assets
Biiect Tax Laws - Quick Insight
10

Polder of lmparLlble esLaLe shall be deemed owner ln respecL of all Lhe properLles comprlsed ln Lhe
esLaLe.

lf Lhe assessee ls ln occupaLlon (self occupled or leL-ouL) of a bulldlng , whlch ls alloLLed or leased
under a house bulldlng scheme of socleLy, company or assoclaLlon Lhen Lhe assessee ls LreaLed as
deemed owner.
1hevalueof anyouLsLandlng lnsLalmenL wlll beallowed as adeducLlon as adebL owned.

8ulldlng ls ln possesslon buL not yet reglsLered
Lease(oLher Lhan annual or monLhlylease) for 12years or more
1ransfereels deemed owner of such properLy.
Sect|on4(6): any personto ho|der of |mpart|b|e estate
Sect|on4(7): roperty he|dby member of ahous|ng soc|ety
Sect|on4(8): any personto any other person
Sect|on Descr|pt|on
Any property any pub||c purpose
(and]or)
1he relevanL crlLerla for granL of exempLlon ls ~any pub||c purpose must be |n Ind|a. 1he
slLuaLlon of properLyls lrrelevanL facLor.
|nterest of assessee
1he wlfe of karLa cannoL rellnqulsh her sLaLus as a member of Pul by a unllaLeral declaraLlon
whllereLalnlng her marlLal sLaLus.{(Inre M.A.k. ka[kumar)(A)}
one pa|ace bu||d|ng
1he relevanL crlLerla for granL of exempLlon are ~a|ace bu||d|ng occup|ed by the ru|er and
noL for Lhebulldlng leL ouL Lo LenanLs.
A palace conslsLs of a number of bulldlngs was declared Lo be Lhe offlclal resldence of Lhe ruler.
Pence, exempLlonwlll beavallableonlylnrespecL of bulldlngoccupledbyLheruler.
|npossess|on
1he relevanL crlLerla for granL of exempLlons are !ewellery permanenLly kepL ln lndla and
shall noL be removed excepL wlLh approval of C8u1 kepL ln orlglnal condlLlon C8u1
auLhorlsed person allowed Lo lnspecL Lhe[ewellery condlLlon.
lf crlLerla are noL saLlsfled ln any year, exempLlon may be wlLhdrawn wlLh reLrospecLlve effecL
(and)
lalr markeL value for all Lhe A?'s up Lo daLe of wlLhdrawal 30 of falr markeL value on Lhe
daLeof wlLhdrawal, wh|chever |s |ower ls consldered for valuaLlon purpose.
An |nd|v|dua|,
|ntent|on of permanent|y
Moneyor valueof asseLs broughL byhlm lnLo lndla.
CredlL balanceln non-resldenL exLernal accounL on LhedaLeof reLurn Lo lndla.
value of asseLs acqulred ouL of money broughL lnLo lndla or credlL balance of n8L accounL
wlLhln oneyear prlor Lo arrlval and aL anyLlmeLhereafLer.
S(|) he|d by assessee under trust or |ega| ob||gat|on for of char|tab|e
or re||g|ous nature |n Ind|a the bus|ness assets used |nc|denta||y to the atta|nment of
ob[ects of trust a|ong w|thma|nta|n|ng books of accounts.
S(||) 1he |ntheco-parcenarypropertyof anynUIof wh|chhe|samember.
S(|||) Any |nthe occupat|onof ku|er.
5(|v) Iewe||ery of any ku|er, wh|chhas beenrecogn|sedas h|s he|r|oom by CG.
(a)
(b) (c)
(or)
5(v) who ls a person of lndlan orlgln or clLlzen of lndla, reLurned Lo lndla from forelgn
counLry wlLh Lhe resldlng ln lndla, Lhen Lhe followlng shall noL be
chargeableLo Lax for 7succeedlng A? of reLurn Lo lndla.
WeaIlh lax Acl, 1957
11

|nd|v|dua| or nUI. Lhls exempLlon ls noL avallableLo company
lf Lhehousels se|f-occup|edby Lheassesseethroughout the per|odof 12months lmmedlaLely
precedlng LhevaluaLlon, Lhen LheSchedulelll valueafLer hebecame the owner of LheproperLy
or cosL of acqulslLlon, whlchever ls benef|c|a| Lo assesseels consldered.
lf above condlLlon ls noL fulfllled Lhen, Lhe Schedule lll value on va|uat|on date or cosL of
acqulslLlon, whlchever ls h|gher ls consldered.
S(v|) Cne house or parL of house (or) a ploL of land noL exceedlng 300 sq. meLers ln area ln case of
(Note: )
1.13 Sect|on 6: Inc|dence of tax
1.14 C|rcu|ar No: 3]19S7 - Locat|on of an asset and the debts
ln respecL of -resldenLlal sLaLus along wlLh lndlan clLlzenshlp.
ln respecL of -onlybyresldenLlal sLaLus.
8esldenLlal sLaLus ls deLermlned as per provlslons speclfled under lncomeLax AcL .
anInd|v|dua|
nUI andcompany
onva|uat|ondate
Description
Individual HUF Company
#
ROI
##
ROI NR ROI NR ROI NR
Ao loJlvlJool teslJeot lo loJlo bot oot oo loJloo cltlzeo
Nature of an asset When |ocated |n Ind|a
(a) Shlp or alrcrafLs AsseL slLuaLed ln lndla
(b) 1anglble lmmovable properLy AsseL slLuaLed ln lndla
(c) 8lghL or lnLeresL ln/over lmmovable properLy AsseL slLuaLed ln lndla
(d) CLher asseLs 8ased on naLure of asseLs
1.1S Assessment rocedure - An overv|ew
1he readers are requesLed Lo read Lhls porLlon assessmenL procedure, search and
selzure, appeals and revlslon and SeLLlemenL Commlsslon under lncome1ax AcL, 1961
Ma[orlLy of Lhe provlslons relaLlng Lo assessmenL procedure, noLlce of demand, seLLlemenL commlsslon,
penalLyeLc areslmllar Lo LhaL of lncomeLax AcL, 1961.
1he provlslons under Lhe WealLh Lax AcL LhaL do noL have a slmllar reference Lo l1 AcL are dlfferenL
from LhaL conLalned ln Lhel1 AcL areexplalned ln Lhls porLlon.
on|y after comp|et|ng
(Chapter : 3to 6).
(or)
(a) [Sec 2(ea) + Sec 4 - Sec 3}ln lndla xxx xxx xxx xxx xxx xxx xxx
(b) uebLs ln lndla or ouLslde lndla ln respecL of (a) asseL (xx) (xx) (xx) (xx) (xx) (xx) (xx)
(c) 1oLal neL asseL value ln lndla xxx xxx xxx xxx xxx xxx xxx
(d) [Sec 2(ea) + Sec 4 - Sec 3}ouLslde lndla xxx - - xxx - xxx -
(e) uebLs ln lndla or ouLslde lndla ln respecL of (d) asseL (xx) - - (xx) - (xx) -
(f) 1oLal neL asseL value ouLslde lndla xxx - xxx xxx xxx xxx xxx
(g) neL wealLh (c) + (f) xxx xxx xxx xxx xxx xxx xxx
# keslJeot ooJ otJlooty teslJeot lo loJlo
1.1S.1 Sect|on 17: Wea|th escape assessment {I1 Act sect|on 147}
rovlslons are sulLably modlfled Lo sulL Lhe requlremenL.
Biiect Tax Laws - Quick Insight
12
Lscaped assessmenL ls < 1O Iakhs wlLhln 4 years from Lhe end of Lhe relevanL assessmenL year
Lscaped assessmenL ls > 1O Iakhs wlLhln 6 years from Lhe end of Lhe relevanL assessmenL year
llnanclal lnLeresL locaLed ouLslde lndla wlLhln 16 years from Lhe end of Lhe relevanL assessmenL year
ln case of assessmenL of company, Lhe assesslng offlcer ls requlred Lo serve noLlce on proper offlcer. 1he
Lerm proper offlcer lncludes Lhe secreLary, manager, managlng dlrecLor, any person connecLed wlLh Lhe
managemenL of Lhe affalrs of Lhe company upon whom Lhe assesslng offlcer served noLlce Lo LreaL as a
proper offlcer for assessmenL.
8eLurned wealLh ls less Lhan 70 of assessed wealLh u/s 16 or 17, deemed Lo have furnlshed lnaccuraLe
parLlculars and penalLy u/s 18(1)(c) shall belevled, whlch shall noL beless Lhan 1000buL lL may exLend Lo
23,000for each such fallure. CpporLunlLy ls glven beforelevylng penalLy.
enalLy proceedlngs lnlLlaLed agalnsL an assessee cannoL be conLlnued on Lhe legal helrs on Lhe demlse of
Lheassessee.
1he Lax llablllLy of Lhe deceased ls payable by Lhe legal represenLaLlve lf Lhe assessmenL has
been compleLed on Lhedeceased buL Lax ls noL dlscharged or Lhedeceased has noL furnlshed reLurn of
wealLh or furnlshed reLurn ls lncorrecL or lncompleLe.
Sect|on19: (|)
(||)
1.1S.2 Sect|on 17A: 1|me ||m|t for comp|et|on of wea|th assessment {I1 Act sect|on 1S3}
1.1S.3 Sect|on 18(1) : ena|ty for concea|ment {I1 Act sect|on 271(1)(c)}
rovlslons are sulLably modlfled Lo sulL Lhe requlremenL.
asslng assessmenL order u/s 16(3) wlLhln 2 years from the end of the assessment
year ln whlch neL wealLh was flrsL assessable.
asslng assessmenL/re-assessmenL wlLhln 1 year from the end of the f|nanc|a|
order u/s 17 ycar in vhich nolice u/s 17(1) vas seived.
asslng assessmenL order due Lo Lhe wlLhln 1 year from the end of the f|nanc|a| year
reason LhaL assessmenL was seL aslde ln whlch Lhe order of commlssloner (appeals) /
or cancelled by Lhe AuLhorlLles or Lrlbunal ls recelved or order of Lhe
ln revlew proceedlngs by Lhe Cl1. Commlssloner ls passed.
Serv|ce of not|ce for re-assessment