Wealth Tax Act, 1957

The Wealth Tax Act was enacted in 1957 and was made applicable effective April 1, 1957. It is chargeable on net wealth only after the allowed exemptions and any debts are deducted.

Introduction

The Wealth Tax is a part of the Finance Act and a branch of the income tax. It was dealt by the same hierarchy of officers of the Income Tax Department. The Wealth Tax Rules, 1957 were framed for the implementation of the Act.

Structure of the Act

§  This Act had 47 sections under 13 chapters.

§  Section 2(c) defines Assesses

§  Persons on whom any proceedings of the act have been taken

§  Persons deemed to be Assesses

§  Persons default under this Act

§  Rate of Wealth Tax is 1% after Rs. 15 Lakhs of net wealth

§  Firms, Banking Company, Insurance Company, Transportation Company engaged in transportation of passengers or goods by ships, charitable company, a company incorporated outside India, Co-operative Societies, Social clubs, political parties, mutual funds etc. are exempted from paying wealth tax.

§  Section 2(ea): Exempted Assets: House meant exclusively for residential purpose, jeweller, buullion and other precious articles used as stock-in-trade, motor cars, urban land, gold deposit bonds etc.

§  Section 2(m): Net Wealth

§  Section 2(q): Valuation Date

Chapter II

§  Section 3: Charge of wealth tax

§  Section 4: Net wealth to include certain assets

§  Section 5: Exemptions in respect, of certain assets

§  Section 6: Exclusion of assets and debts outside India

§  Section 7: Value of assets how to be determined (Rules for determining value of asset)

§  Section 14: Return of Wealth

§  Section 16: Best Judgment Assessment

§  Section 17: Wealth Escaping Assessment

§  Section 19: Assessment in case of a deceased person

§  Section 20: Assessment after partition of a Hindu Undivided Family

§  Section 20A: Assessment after partial-partition of a Hindu Undivided Family

§  Section 35: Rectification of mistakes

§  Section 46: Power to make rules

This Article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com

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