Citation Act No. 27 of 1957 Date commenced 1 April 1957 | Enacted by Parliament of India | |
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The Wealth Tax Act, 1957 was 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 Act applies to the whole of India including the state of Jammu and Kashmir and the Union Territories. The application of the Act has been discontinued from 1 April 2016.
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Wealth tax was abolished in the Union Budget ( 2016 - 2017 ) presented by Union Finance Minister of India Mr. Arun Jately on 28-Feb-2015. The wealth-Tax was replaced with additional surcharge of 2 per cent on super rich with a taxable income of over `1 crore annually.
Wealth Tax Act
The Wealth Tax Act, 1957 governs the taxation process associated with the Net Wealth of an Individual, a Hindu Undivided Family (HUF), or a Company possesses on the Valuation Date.
The Reserve Bank of India is exempted from paying Wealth Tax though the entity fulfils the requirement of being a corporation in India. It is an Act that provides for the levy of Wealth Tax on liable Assessees and came into force on April 1, 1957. This Act requires liable Assessees to file their Wealth Tax Return online in Form BB. The due-date for filing return of Wealth Tax shall be same date as that applicable to an assessee under the Income Tax Act.
Wealth Tax is a direct tax and is to be filed separately. It is not part of the Income Tax Return that is filed at the end of a Financial Year in India.
Valuation date
The valuation date is an important component in the calculation of Wealth Tax. The Net Wealth that an assessee possesses on the valuation date determines the amount of tax, the residential status of the assessee, value of an asset, and exact amount of wealth at the end of the date. The valuation date is considered the day of 31 March immediately preceding the Assessment Year. E.g., When the Assessment Year is 1 April 2012 to 31 March 2013, the valuation date will be 31 March 2012.
Calculation of wealth tax
Wealth tax is calculated at the rate of 1 per cent of the amount of net wealth that exceeds Rs. 30 lakh on the valuation date. The net wealth of an assessee includes the value of specified unproductive assets on the valuation date after subtracting the debt the assessee owes on the said assets. Wealth tax does not attract any Education Cess or surcharge.
Exceptions
Wealth Tax is not applicable to