KNOW WEALTH TAX…..

Wealth tax may something new for many of you, but it can’t be ignored for this reason.

The wealth- tax–act says “there shall be charged for every assessment year commencing on and from the 1st day of April, 1993, wealth-tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company, at the rate of one per cent of the amount by which the net wealth exceeds fifteen lakh rupees:]

^64a[Provided that in the case of every assessment year commencing on and from the 1st day of April, 2010, the provisions of this section shall have effect as if for the words "fifteen lakh rupees", the words "thirty lakh rupees" had been substituted.]”

So wealth tax is 1% of the value of assets exceeding 30 lakhs.

The sole purpose of levying this tax is to target unproductive, non-essential and idle assets.

It shall include gold and silver whether bought or gifted and also if u have bought a house and not rented shall be included for wealth tax of course o/s loan taken to buy the this property shall be deducted from the value of property , and even if you keep cash in your locker at home is liable for wealth tax.

However productive and financial assets  ,such as commercial properties ,bonds etc. are exempt from wealth tax.

Today wealth tax just accounts less than 0.25% of total direct taxes and is minuscule in the total revenue collection. Last year it has contributed rs.866 crore in total revenue collection of rs 1,038,036 crore.

Unlike the income tax which is levied on earning just once, it is payable every year for the same assets.

Of course there is a stiff penalty for evading wealth tax , incorrect declaration of wealth can invite a fine of up to  500%   of the evaded tax, one can also be jailed for up to 7 years if the due is over rs.1 lakh.

The wealth tax return is to be filled using form BA and the last date for doing so is 31^st july. If assesse is liable for audit, the last date is 30^th sept.  penalty for delay in filling return can be rs 100-200 per day.

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