The Wealth Tax Act is an important direct tax legislation, which came into existence on 1 st April 1957. Wealth tax is levied on the benefits derived from property ownership. The tax is to be paid year after year on the same property on its market value, whether or not such property yield any income.
An assessee or a person, who is liable to pay wealth tax under the Wealth Tax Act, includes legal envoy, perpetrator or administrator of a deceased person and a person deemed to be an agent of a non-resident. Under the Act, tax is charged on the following persons in respect of the wealth held by them during the assessment year:
- A company.
- A Hindu Undivided Family (HUF), which is a type of assessee recognised under the Act, consisting of all persons lineally descended from a common ancestor and deriving income from joint family corpus. Hindu, Jain, Buddhist, and Sikh families have been so recognised.
- An association of persons or a body of individuals.
- Non-corporative taxpayers whose accounts are to be statutorily audited.
- Those who fall in the 1-by-6 category (External website that opens in a new window).
Chargeability to tax also depends upon the residential status of the assessee and the citizenship of a person.
It may be noted here that productive assets like shares, debentures, bank deposits and investments in mutual funds are exempt from wealth tax. The non-productive assets include jewellery, bullion, motorcars, aircraft, urban land, etc. Foreign nationals are exempt from wealth tax on non-Indian assets. The details of Wealth Tax can be accessed through Acts and Rules as framed by the Constitution. Click on the links below for more:
- Wealth Tax Act (External website that opens in a new window)
- Wealth Tax Rules (External website that opens in a new window)
To file your Wealth Tax Returns, you need to fill Form BA, Form A and Form B. Visit the link below to download these forms.
Source: National Portal Content Management Team, Reviewed on: 10-02-2011