Wealth Tax - Have you calculated your wealth liability?

The superhit film Deewar of 1975 ( featuring Amitabh Bachchan & Shashi Kapoor), if was remade today by a CA, with Shashi Kapoor playing the Income Tax officer, how would the famous dialogue between two brothers look like?

Vijay:“Aaj mere paas bangla hai, gaadi hai, bank balance hai,kya hae tumhare paas?”

Ravi: “Arre bhai toh tumne Wealth Tax bhara ki nahi?”

Vijay:“Ye Wealth Tax Kya Hai?”

Ravi: “Wealth Tax is a direct tax charged under Wealth Tax Act,1957. It is applicable on individual, HUFs or Company assessee. It is charged mainly on the unproductive assets of the assessee.”

Vijay: “Matlab? Kal maine jo Bank mein Rs 20 lakhs ki FD rakhi uspe wealth tax lagega?” 

Ravi: “Nahi bhai. Wealth Tax is applicable only on the following assets if the total valuation of the same is more than Rs 30 lakhs.  The assets included under Wealth Tax are:

• Motor Car ( not used for business or as stock in trade)
• Jewellery ,bullion, utensils of gold and other precious metals
• Yatchs, Aircrafts and boats( for non commercial use)
• Cash in hand (in excess of Rs. 50,000/-) for individuals and HUF.
• Guest house, commercial building or residential home ( more than one home)
• Urban Land or building attached to it excluding residential property let out for more than 300 days, property used for business or profession and residence home allotted by employer to an employee or Director of the company as a perquisite.
     
  Vijay: “Matlab, I have to file Wealth tax on my Bentley, Porsche, BMW and Lexus. Ravi, how do I calculate my Wealth tax liability and when do I file it?”
    
  
  

  Ravi: “Bhai, Wealth tax is paid as 1% of the total taxable wealth  under the rule. Suppose, the depreciated value of your motor car is Rs 1 crore. Then you have to pay 1% tax on Rs.70,00,000/- (Rs.1crore – Rs.30 lakhs). It is calculated above the exemption limit of Rs 30 lakhs.The filing form is available on the Income tax website.The filing date is similar to the income tax filing.(i.e.31 July for individuals and 30 Sept for auditable assessee)The penalties in case of non-payment is as high as 100% and in case of concealment is 500%”
  
  
  Vijay: “Thanks bhai, for your insights on Wealth Tax”
  
  
  
  
  
  

  Thanks and Regards

  Team

  Saarthi Financial Planner

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