13 August 2009

Wealth Tax under new Direct Taxes Code, 2009

Wealth Tax under new Direct Taxes Code, 2009
Under the new code, wealth-tax will be payable by an i) individual, ii) HUF and iii) private discretionary trusts.
Wealth tax will be levied on net wealth on the valuation date i.e. the last day of the financial year. Net wealth will be defined as assets chargeable to wealth-tax as reduced by the debt owed in respect of such assets.

Assets chargeable to wealth-tax will mean all assets, including financial assets and deemed assets, as reduced by exempted assets. (Thus shares, bank deposits,

The exempted assets will be restricted to the following:-
(i) Assets used as stock-in-trade.
(ii) Any one house or part of a house or a plot of land belonging to an individual or a Hindu undivided family which is acquired or constructed before 1st day of April, 2000;
(iii) The interest of the person in the coparcenary property of any Hindu Undivided Family of which he is a member;
(iv) The value of any one building used for the residence by a former ruler of a princely state.
(v) Jewellery in possession of a former ruler of a princely state, not being his personal property, which has been recognised as a heirloom by the Central Government before 1st April, 1957 or by the Board after that date.
(vi) Any property held by the person under trust, or other legal obligation, for carrying out any permitted welfare activity in India;
(f) The valuation of financial assets will be at cost or market price, whichever is lower.

The net wealth of an individual or HUF in excess of Rupees fifty crore will be
chargeable to wealth-tax at the rate of 0.25 per cent. The threshold limit of Rupees fifty crore will not apply to a private discretionary