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WEALTH-TAX ACT

Ministry of Law and Justice

Act nº 27 of 1957


  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter IVA. Special Provision for Avoiding Repetitive Appeals
  • Chapter V
  • Chapter VA. Settlement of Cases
  • Chapter VI
  • Chapter VII
  • Chapter VIIA. Refunds
  • Chapter VIIB. Registered Valuers
  • Chapter VIII
  • Schedules
  • Act nº 27 of 1957

Preamble

THE WEALTH-TAX ACT, 1957

[Act, No. 27 of 1957]1

[12th September, 1957]

PREAMBLE

An Act to provide for the levy of wealth-tax

B E it enacted by Parliament in the Eighth Year of the Republic of India as follows: -

1. The Act has been extended to-

Dadra, Nagar Haveli, Goa (which subsequently attained statehood w.e.f. 3-5-1987, Daman & Diu and Pondicherry by the Taxation Laws (Extension to Union Territories) Regulation, 1963, Section 3(1) and Sch. w.e.f. 1-4-1963. Sikkim, vide Notification No. S.O. 148(E), dated 23rd February, 1989.


Chapter I

Section 1. Short title, extent and commencement

(1) This Act may be called the Wealth-Tax Act, 1957.

(2) It extends to the whole of India.

(3) It shall be deemed to have come into force on the 1st day of April, 1957.

Section 2. Definitions

In this Act, unless the context otherwise requires, -

1[*****]

2[(b) "Appellate Tribunal" means the Appellate Tribunal constituted under section 252 of the Income-tax Act;

(c) "assessee" means a person by whom wealth-tax or any other sum of money is payable under this Act, and includes-

(i) every person in respect of whom any proceeding under this Act has been taken for the determination of wealth-tax payable by him or by any other person or the amount of refund due to him or such other person;

(ii) every person who is deemed to be an assessee under this Act;

(iii) every person who is deemed to be an assessee in default under this Act;

3[(ca) "Assessing Officer" means the Deputy Commissioner of Income-tax or the Assistant Commissioner or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Income-tax Act which apply for the purposes of wealth-tax under section 8 of this Act and also the 45[Additional Commissioner or] 46[Additional Director or] Joint Commissioner who is directed under clause (b) of sub-section (4) of the said section 120 to exercise or perform all or any of the powers and functions conferred on or assigned to the Assessing Officer under that Act;]

4[cb)]"assessment" includes re-assessment;

(d) "assessment year" means the period of twelve months commencing on the 1st day of April every year;]

5[(e) "assets" includes property of every description, movable or immovable, but does not include, -

(1) in relation to the assessment year commencing on the 1st day of April, 1969, or any earlier assessment year-

(i) agricultural land and growing crops, grass or standing trees on such land;

(ii) any building owned or occupied by a cultivator of. or receiver of rent revenue out of, agricultural land;

Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an outhouse;

(iii) animals;

(iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(v) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee;

(2) in relation to the assessment year commencing on the 1st day or April, 1970, or any subsequent assessment year 6[but before the 1st day of April, 1993] -

(i) animals;

(ii) a right to 7[any annuity (not being an annuity purchased by the assessee or purchased by any other person in pursuance of a contract with the assessee)] in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(iii) any interest in propertywhere the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee:]

8[9 Provided that in relation to the assessment year commencing on the 1st day of April, 1981,10[and the assessment year commencing on the 1st day of April, 1982], this sub-clause shall have effect subject to the modification that for item (i) thereof, the following item shall be substituted namely: -

"(i) (a) agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation;

(b) any building owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation:

(c) animals;":]

Provided that the building is on or in the immediate vicinity of the land and is a building, which the cultivator or the receiver of the rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an outhouse;

11[Provided further that in relation to the assessment year commencing on the 1st day of April, 1983, or any subsequent assessment year, this sub-clause shall have effect subject to the modification that for item (i) thereof, the following item shall be substituted, namely: -

"(i) (a) agricultural land and growing crops (including fruits on trees), grass or standing trees on such land;

(b) one building or one group of buildings owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land:

Provided that such building or group of buildings is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as store-house or for keeping livestock;

(c) animals;"]

12[Provided also that in relation to the State of Jammu and Kashmir, this sub-clause shall have effect subject to the modification that for the assets specified in 13[item (i)] of this sub-clause, the assets specified in 14[items (i) to (iii)] of sub-clause (1) shall be substituted and the other provisions of this Act shall be construed accordingly;]

15[(ea) "assets", in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means-

16[(i) any building or land appurtenant thereto (hereinafter referred to as house"), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corporation or by any other name) or a Cantonment Board, but does not include-

(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees;

(2) any house for residential or commercial purposes which forms part of stock-in-trade;

(3) any house which the assessee may occupy for the purposes of any business or profession carried on by him;

(4) any residential property that has been let-out for a minimum period of three hundred days in the previous year;

(5) any property in the nature of commercial establishments or complexes;]

(ii) motor cars (other than those used by the assessee in the business of running them on hire or as stock-in-trade);

(iii) jewellery, bullion and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals:

Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset shall be deemed as excluded from the assets specified in this sub-clause;

(iv) yachts, boats and aircrafts (other than those used by the assessee for commercial purposes);

(v) urban land;

(vi) cash in hand, in excess of fifty thousand rupees, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account.

17[Explanation 1]. - For the purposes of this clause, -

(a) "jewellery" includes-

(i) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones and whether or not worked or sewn into any wearing apparel;

(ii) precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel;

(b) "urban land" means land situate-

(i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the valuation date; or

(ii) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification 18 in the Official Gazette,

but does not include land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated or the land occupied by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him 19[or any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him];]

20[Explanation 2. - For the removal of doubts, it is hereby declared that "Jewellery" does not include the Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government.]

(f) "Board" means the 21[Central Board ofDirect Taxes constituted under the Central Board of Revenue Act, 1963 (54 of 1963)];

(g) 22[*****]

(f) 23[***** ]

24[(h) "company" shall have the meaning assigned to it in clause (17) of section 2 of the Income-tax Act;]

25[(ha) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies;]

26[*****]

(i)"executor"means an executor or administrator of the estate of a deceased person;

27[(ia) "High Court", in relation to the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu, means the High Court at Bombay;]

28[(j) "Income-tax Act"means the Income-tax Act, 1961 (43 of 1961);]

29[*****]

47[(ka) "India" means the territory of India as referred to in article 1 of the Constitution, its territorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976(80 of 1976), and the air space above its territory and territorial waters;]

(la) 31[*****]

32[(1b) "legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908);]

33[(1c) "maximum marginal rate" means the rate of wealth-tax applicable in relation to the highest slab of wealth in the case of an individual as specified in Part I of Schedule I;]

34[(ld) "National Tax Tribunal" means the National Tax Tribunal established under section 3 of the National Tax Tribunal Act, 2005;]

(m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, whereverlocated, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee 35[on the valuation date which have been incurred in relation to the said assets;]

(n) "prescribed" means prescribed by rules made under this Act;

(o) "principal officer", used with reference to a company, means the secretary, manager, managing agent or managing director of the company, and includes any person connected with the management of the affairs of the company upon whom the 36[Assessing Officer] has served a notice of his intention of treating him as the principal officer thereof;

37[(oa) "public servant" has the same meaning as in section 21 of the Indian Penal Code (45 of 1860);]

38[(oaa) "registered valuer" means aperson registered as a valuer under section 34 AB;]

39[(ob) "regular assessment" means the assessment made under '[sub-section (3) or sub-section (5) of section 16;]

(p) "Ruler" means a Ruler as defined in clause (22) of Article 366 of the Constitution;

(q) "valuation date", in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in 40[section 3] of the Income-tax Act if an assessment were to be made under that Act for that year:

41[Provided that-

(i) 42[*****]

(ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment year;

(iii) where an assessment is made in pursuance of section 19A, the valuation date shall be

the same valuation date as would have been adopted in respect of the net wealth of the deceased if he were alive;]

43[(r) "Valuation Officer" means a person appointed as a Valuation Officer under section 12A, and includes a Regional Valuation Officer, a District Valuation Officer and an Assistant Valuation Officer;]

44[(s) the expressions "Chief Commissioner, Director-General, Commissioner, Commissioner (Appeals), Director, Additional Director of Income-tax, Additional Commissioner of Income-tax, Joint Director, Joint Commissioner of Income-tax, Deputy Director, Deputy Commissioner, Assistant Commissioner, Assistant-Director, Income tax Officer, Inspector of Income-tax and Tax Recovery Officer shall have the meanings respectively assigned to them under section 2 of the Income-tax Act]

1. Clause (a) omitted by Act 4 of 1988, Section 128(i) as amended by Act 26 of 1988, Section 88(e)(i) w.e..f 1-4-1988.

2. Substituted by Act 46 of 1964, Section 2(a), for clauses (b), (c) and (d) w.e.f 1-4-1965.

3. Clause (ca) Inserted by Act 4 of 1988, Section 128(ii), as amended by the Finance Act, 1988 (26 of 1988), Section 88(e)(ii) w.e.f. 1-4-1988 and Substituted by Act 21 of 1998, Section 67(a w.e.f. 1-10-1998.

4. Clause (ca) re-lettered as clause (cb) by Act 4 of 1988, Section 128(ii) as amended by Act 26 of 1988, Section 88(e)(i) w.e.f. 1-4-1988.

5. Substituted by Act 14 of 1969, Section 24(a) w.e..f 1-4-1969.

6. Inserted by Act 18 of 1992, Section 89(a) w.e.f. 1-4-1993.

7. Substituted by Act 20 of 1974, Section 14(1)(a), for the words "any annuity" w.e.f. 1-4-1975.

8. Inserted by Act 19 of 1970, Section 26(a) w.e.f. 1-4-1969.

9. Substituted by Act 44 of 1980, Section 36 w.e.f. 1-4-1981.

10. Substituted by Act 14 of 1982, Section 33(a), for "or any subsequent assessment year" w.e.f. 1-4- 1983.

11. Inserted by Act 14 of 1982, Section 33(b) w.e.f. 1-4-1983.

12. Substituted by Act 14 of 1982, Section 33(b), for "Provided further that" w.e.f. 1-4-1983.

13. Substituted by Act 20 of 1974, Section 14(1)(b), for "items (i) to (iii)" w.e.f. 1-4-1975.

14. Substituted by Act 20 of 1974, Section 14(1)(b), for "items (i) to (v)" w.e.f. 1-4-1975.

15. Inserted by Act 18 of 1922, Section 89(b) w.e.f. 1-4-1993.

16. Substituted by Act 33 of 1996, Section 56 w.e.f. 1-4-1997 and again substituted by Act 21 of 1998, Section 67(b)(i) w.e.f. 1-4-1999.

17. Explanation re-numbered as Explanation 1 by Act 27 of 1991, Section 91 w.e.f. 1-4-2000.

18. Notification No. S.O. 871 (E), dated 9th November, 1993.

19. Inserted by Act 38 of 1993, Section 38 w.e.f. 1-4-1994 and Substituted by Act 21 of 1998, Section 67(b)(ii), for certain words w.e.f. 1-4-1999.

20. Inserted by Act 27 of 1999, Section 91 w.e.f. 1-4-2000.

21. Substituted by Act 54 of 1963, Section 5(1), for "Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of 1924)" w.e.f. 1-4-1964.

22. Clause (g) omitted by Act 4 of 1988, Section 128(iii) as amended by Act 26 of 1988, Section 88(e)(iii) w.e.f. 1-4- 1988.

23. Clause (gg) Inserted by Act 29 of 1977, Section 39 Sch. V, Part II, Item 1 w.e.f. 10-7-1978, and omitted by Act 4 of 1988, Section 128(iii) as amended by Act 26 of 1988, Section 88(e)(iii) w.e.f. 1-4-1988.

24. Substituted by Act 4 of 1988, Section 128(iv) w.e.f. 1-4-1989.

25. Inserted by Act 16 of 1972, Section 44(a) w.e.f. 1-4-1957.

26. Clause (hb) omitted by Act 4 of 1988, Section 128 (iii) as amended by Act 26 of 1988, Section 88(e)(iii) w.e.f. 1-4-1988. Earlier clause (ha) was re-lettered as clause (hb) by Act 16 of 1972, Section 44(b) w.e.f. 1-4-1965.

27. Inserted by Act 3 of 1963, Section 3 and Sch. w.e.f. 1-4-1965.

28. Substituted by Act 46 of 1964, Section 2(d) w.e.f. 1-4-1965.

29. Clause (k) omitted by Act 4 of 1988, Section 128(iii) as amended by Act 26 of 1988, Section 88(e)(iii) w.e.f. 1-4-1988.

30. Inserted by Act 3 of 1963, Section 3 and Sch. w.e.f. 1-4-1963.

31. Clauses (1) and (1a) omitted by Act 4 of 1988, Section 128(iii) as amended by Act 26 of 1988, Section 88(e)(iii) w.e.f.1-4-1988.

32. Inserted by Act 46 of 1964, Section 2(e) w.e.f. 1-4-1965.

33. Inserted by Act 4 of 1988, Section 128(v) w.e.f. 1-4-1989.

34. Inserted by the National Tax Tribunal Act, 2005.

35. Substituted by Act 18 of 1992, Section 89(c) w.e.f 1-4-1993.

36. Substituted by Act 4 of 1988, Section 127, for "Wealth-tax Officer" w.e.f. 1-4-1988.

37. Inserted by Act 46 of 1964, Section 2(g) w.e.f. 1-4-1965.

38. Inserted by Act 45 of 1972, Section 7(a) w.e.f. 15-11-1972.

39. Substituted by Act 12 of 1990, Section 51, for "section 16" w.e.f. 1-4-1989.

40. Substituted by Act 46 of 1964, Section 2(h)(i), for "clause (11) of section 2" w.e.f. 1-4-1965.

41. Substituted by Act 46 of 1964, Section 2(h)(ii) w.e.f. 1-4-1965.

42. Clause (i) omitted by Act 4 of 1988, Section 128(vi) w.e.f. 1-4-1989.

43. Substituted by Act 45 of 1972, Section 7(b) w.e.f. 15-11-1972..

44. Substituted by Act 4 of 1988, Section 128(vii), as amended by Act 26 of 1988, Section 8(e)(iv) w.e.f. 1-4-1988 and again substituted by Act 21 of 1998, Section 67(c) w.e.f. 1-10-1998.

45. Inserted by the Finance Act, 2007, w.r.e.f. 01.06.1994.

46. Inserted by the Finance Act, 2007, w.r.e.f. 01.10.1996.

47. Substituted by the Finance Act, 2007, w.r.e.f. 25.08.1976. Prior to substitution, it read a under:-

"30(ka) "India" shall be deemed to include the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry-

(i) as respects any period, for the purposes of section 6; and

(ii) as respects any period included in the year ending with the valuation date, for the purpose of making any assessment for the assessment year commencing on the 1st day of April, 1963, or for any subsequent year;"


Chapter II

Section 3. Charge of wealth-tax

1[1] 2[Subject to the other provisions (including provisions for the levy of additional wealth-tax) contained in this Act], there shall be charged for every3[assessment year] commencing on and from the first day of April, 19574[but before the 1 st day of April, 1993 ], a tax (he reinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company5[at the rate or rates specified in Schedule I].

6[(2) Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the 1 st day of April, 1993, wealth-tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company, at the rate of one per cent, of the amount by which the net wealth exceeds fifteen lakh rupees.]

7[Provided that in the case of every assessment year commencing on and from the 1st day of April, 2010, the provisions of this section shall have effect as if for the words fifteen lakh rupees, the words thirty lakh rupees had been substituted.]

1. Section 3 renumbered as sub-section (1) thereof by Act 18 of 1992, Section 90 w.e.f. 1-4-1993.

2. Substituted by Act 4 of 1988, Section 129, for "subject to the other provisions contained in this Act" w.e.f. 1-4-1989.

3. Substituted by Act 46 of 1964, Section 3, for "Financial year" w.e.f. 1-4-1965.

4. Inserted by Act 18 of 1992, Section 90 (a) w.e.f. 1-4-1993.

5. Substituted by Act 66 of 1976, Section 27(!), for "at the rate or rates specified in the schedule" w.e.f. 1-4-1977.

6. Inserted by Act 18 of 1992, Section 90(b) w.e.f. 1-4-1993.

7. Inserted by the Finance (No. 2) Act, 2009 w.e.f. 1st April, 2010.


Section 4. Net wealth to include certain assets

(1) 1 [In computing the netwealth-

(a)ofan individual, there shall be included, as belonging to that individual, thevalue of assets which on the valuation date are held -]

2 [(i)by the spouse of such individual to whom such assets have been transferred bythe individual, directly or indirectly, otherwise than for adequateconsideration or in connectionwith an agreement to live apart, or

(ii)by a minor child, not being3 [a minor child suffering from anydisability of the nature specified in section 80U of the Income-tax Act or] a married daughter, of suchindividual, 4 [*****], or]

(iii)by a person or association of persons to whom such assets have been transferredby the individual 5 [directly or indirectly,] otherwise than foradequate consideration for the immediate or deferred benefit of the individual,his or her spouse 6 [*****]or]

(iv)by a person or association of persons to whom such assets have been transferredby the individual otherwise than under an irrevocable transfer, 5 [or]

5 [(v)by the son's wife,7 [*****] of such individual, to whom such assetshave been transferred by the individual, directly or indirectly, on or after the1stday of June, 973,otherwise than for adequate consideration,]8 [or]

8 [(vi)by a person or association of persons to whom such assets have been transferredby the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequateconsideration for the immediate or deferred benefit of the son's wife,7 [*****]of such individual or both,]

whetherthe assets referred to in any of the sub-clauses aforesaid are held in the formin which they were transferred or otherwise:

9 [Providedthat where the transfer of such assets or any part thereof is either chargeableto gift-tax under the Gift-tax Act, 1958 (18 of 1958),or is not chargeable under section 5 of that Act, for any assessment year commencing 10 [afterthe 31stday of March, 1964,but before the 1stday of April, 1972],the value of such assets or part thereof, as the case may be, shall not beincluded in computing the net wealth of the individual:]

11 [Providedfurther that nothing contained in sub-clause (ii) shall apply in respect of suchassets as have been acquired by the minor child out of his income referred to in the proviso tosub-section (1A)of section 64of the Income-tax Act and which are held by him on the valuation date:

Providedalso that where the assets held by a minor child are to be included in computingthe net wealth of an individual, such assets shall be included,-

(a) where the marriage ofhis parents subsists, in the netwealth of that parent whose net wealth excluding the assets of the minor childso includible under this sub-section) is greater; or

(b) where the marriage ofhis parents does not subsist, in thenet wealth of that parent who maintains the minor child in the previous year asdefined in section 3of the Income-tax Act,

andwhere any such assets are once included in the net wealth of either parent, anysuch assets shall not be included in the net wealth of the other parent in anysucceeding year unless the Assessing Officer is satisfied, after giving thatparent an opportunity of being heard, that it is necessary so to do.]

1 [(b)of an assessee who is a partner in a firm or a member of an association of persons (notbeing a co-operative housing society), there shall be included, as belonging tothat assessee, the value of his 12 [interest in the assets of the firm] orassociation determined in the manner laid down in Schedule III:

13 [Providedthat where a minor is admitted to the benefits of partnership in a firm, thevalue of the interest of such minor in the firm, determined in the mannerspecified above, shall be included in the net wealth of the parent of the minor,so far as may be, in accordance with the provisions of the third proviso toclause(a)].

14 [(IA)Where, in the case of an individual being a member of a Hindu undivided family, anyproperty having been the separate property of the individual has, at any timeafter the, 31stday of December, 1969,been converted by the individual into property belonging to the family throughthe act of impressing such separate property with the character of properlybelonging to the family or throwing it 15 [into the common sk of thefamily or been transferred by the individual, directly or indirectly, to thefamily otherwise than for adequate consideration (the property so converted ortransferred being hereinafter referred to as the converted property)], then,notwithstanding anything contained in any other provision of this Act or in anyother law for the time being in force, for the purpose of computing the netwealth of the individual under this Act for any assessment year commencing on orafter the 1stday of April, 1972,-

(a)the individual shall be deemed to have transferred the converted property,through the family,

tothe members of the family for being heldby them jointly;

(b)the converted property or any part thereof 16 [*****] shall be deemedto be assets belonging to the individual and not to the family;

17 [(c)where the converted property has been the subject-matter of a partition (whetherpartial or total) amongst the members of the family, the converted propertyor any part thereof which is received by the spouse 18 [*****] of theindividual on such partition shall be deemed to be assets transferred indirectlyby the individual to the spouse 19 [*****] and the provisions ofsub-section (1) shall, so far as may be, apply accordingly:]

Providedthat the property referred to in clause (b) or clause (c) shall, on beingincluded in the net wealth of the individual be excluded from the net wealth ofthe family or, as the case may be, the spouse 20 [*****] of theindividual.

21 [*****]

22 [*****]

(4) Nothing contained in clause (a) ofsub-section (1)shall apply to any such transfer as is referred to therein made by an individualbefore the 1stday of April, 1956,and the value of any assets so transferred shall not be included in thecomputation of his net wealth.

5 [(4A) Notwithstanding anything insub-section (4),nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to thereinmade before the 1stday of April, 1963,by an individual who but for the extension of this Act to theUnion territories of Dadra and Nagar Haveli, Goa, Daman and Diu, andPondicherry, would not have been an assessee, and the value of any assets sotransferred shall not be included in the computation of his net wealth.]

(5)The value of any assets transferred under an irrevocable transfer shall beliable to be included in computing the net wealth of the transferor as and whenthe power to revoke arises to him.

23 [(5A) Where a gift of money from oneperson to another is made by means of entries in the books of account maintained by theperson making the gift or by an individual or a Hindu undivided family or a firmor an association of persons or body of individuals with whom or which he hasbusiness or other relationship, the value of such gift shall be liable to beincluded in computing the net wealth of the person making the gift unless heproves to the satisfaction of the 23 [Assessing Officer] that themoney has actually been delivered to the other person at the time the entrieswere made.]

24 [(6) For the purposes of this Act, theholder of an impartible estate shall be deemed to be the individual owner of allthe properties comprised in the estate.]

25 [(7) Where the assessee is amember of a co-operative society,company or other association of persons and a building or part thereof isallotted or leased tohim under a house building scheme of the society, company or association,as the case may be, the assessee shall, notwithstanding anything contained inthis Act or any other law for the time being in force, be deemed to be the ownerof such building or part and the value of such building or part shall beincluded in computing the net wealth of the assessee; and, in determining thevalue of such building or part, the value of any outstanding instalments of theamount payable under such scheme by the assessee to the society, company orassociation towards the cost of such building or part and the land appurtenantthereto shall, whether the amount so payable is described as such or in anyother manner is such scheme, be deducted as a debt owed byhim in relation to such building orpart.

(8)A person-

(a)who is allowed to take or retain possession of any building or part thereof inpart performance of a contract of the nature referred to in section 53A of theTransfer of Property Act, 1882;

(b)who acquires any rights (excluding any rights by way of a lease from month tomonth or for a period not exceeding one year) in or with respect to any buildingor part thereof by virtue of any such transaction as is referred to in clause(f) of section 269UAof the Income-tax Act,

shallbe deemed to be the owner of that building or part thereof and the value of suchbuilding or part shall be included in computing the net wealth of such person]

Explanation.-For the purposes of this section, -

(a)the expression "transfer" includes any disposition settlement, trust,covenant, agreement or arrangement; 5 [*****]

26 [(aa)the expression "child" includes a step-child and an adopted child;]

(b)the expression "irrevocable transfer" includes a transfer of assetswhich, by the terms of the instrument effecting it, is not revocable for aperiod exceeding six years or during the lifetime of the transferee, and underwhich the transferor derives no direct or indirect benefit, but does not includea transfer of assets if such instrument--

(i)contains any provision for the re-transfer, directly or indirectly, of the.whole or any part of the assets or income therefrom to the transferor, or

(ii)in any way gives the transferor a right to re-assume power, directly orindirectly, over the whole or any part of the assets or income therefrom; and

27 [(c)the expression "property" includes any interest in any property,movable or immovable, the proceeds of sale thereof and any money or investmentfor the time being representing the proceeds of sale thereof and where theproperty is converted into any other property by any method, such other property28 [*****]

28 [*****]

1.Substituted by Act 3 of 1989, Section 59(a)(i) w.e.f. 1-4-1989.

2.Sub-clauses (i), (ii) and (iii) Substituted by Act 46 of 1964, Section4(a)(ii)(A) w.e.f. 1-4-1965.

3.Inserted by Act 32 of 1994, Section 52 w.e.f. 1-4-1995.

4.Omitted by Act 18 of 1992, Section 91(a)(i) w.e.f. 1-4-1993.

5.Inserted by Act 41 of 1975, Section 82(i)(a) w.e.f. 1-4-1976.

6.Omitted by Act 18 of 1992, Section 91(a)(i)(2) w.e.f. 1-4-1993.

7.The words "or the sons's minor child" omitted by Act 18 of 1992, Section91(A)(i) w.e.f. 1-4-1993.

8.Inserted by Act 67 of 1984, Section 53 w.e.f. 1-4-1985.

9.Inserted by Act 46 of 1964, Section 4(a)(ii)(B) w.e.f. 1-4-1965.

10.Substituted by Act 32 of 1971, Section 31(a)(i), for "after the 31st day ofMarch, 1964" w.e.f. 1-4-1972.

11.Inserted by Act 18 of 1992, Section 91(a)(i)(5) w.e.f. 1-4-1993.

12.Substituted by Act 18 of 1992, Section 91(a)(ii)(1), for "interest in the firm"w.e.f. 1-4-1993.

13.Substituted by Act 18 of 1992, Section 91(A)(ii)(2) w.e.f. 1-4-1993.

14.Inserted by Act 32 of 1971, Section 31(b) w.e.f. 1-4-1972.

15.Substituted by Act 21 of 1979, Section 23(a), for "into the common sk of thefamily (such property being hereinafter referred to as the converted property)"w.e.f. 1-4-1976.

16.Omitted by Act 41 of 2975, Section 82(ii)(a) w.e.f. 1-4-1976.

17.Substituted by Act 41 of 1975, Section 82(ii)(b) w.e.f. 1-4-1976.

18.The words "or minor child" omitted by Act 18 of 1992, Section 91(b) w.e.f.1-4-1993.

19.Sub-section (2) omitted by Act 3 of 1989, Section 59(b) w.e.f. 1-4-1989.

20.Sub-section (3) omitted by Act 18 of 1992, Section 91 w.e.f. 1-4-1993.

21.Inserted by the Taxation Laws (Extension to Union Territories) Regulation, 1963,Section 3 and Schedule w.e.f. 1-4-1963.

22. Substituted by Act 4 of 1988, Section 127 for "Wealth-tax Officer" w.e.f.1-4-1988.

23.Sub-section (6) and Explanationsubs, by Act 46 of 1964, Section 4(b) w.e.f. 1-4-1965.

24.Sub-section (7) Inserted by Act 32 of 1971, Section 31(e) w.e.f. 1-4-1972 andagain Substituted by Act 33 of 1997, Section 57 w.e.f. 1-4-1997.

25. The words "and" omitted by Act 32 of 1971, Section 31(d)(i) w.e.f. 1-4-1972.

26.Clauses (c) and (d) inserted by Act 32 of 1971, sec 31(d)(ii) w.e.f. 1-4-1972.

27. The word "and" omitted by Act 41 of 1975,Section 82(iv)(c) w.e.f. 1-4-1976.

28.Clause (d) omitted by Act 41 of 1975, Section 82(iv)(d) w.e.f. 1-4-1976.


Section 5. Exemptions in respect of certain assets

1 [2 [*****] Wealth-tax shall not be payable by an assessee in respect of the following assets]; and such assets shall not be included in the net wealth of the assessee--

(i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India:

3 [Provided that nothing contained in this clause shall apply to any property forming part of any business, not being a business referred to in clause (a) or clause (b) of sub-section (4A) of section 11 of the Income-tax Act in respect of which separate books of account are maintained or a business carried on by an institution fund or trust referred to in 2 [*****] clause (23B) or clause (23C) of section 10 of the Act;]

(ii) the interest of the assessee in the coparcenary property of any Hindu undivided family of which he is a member;

(iii) 4 [any one building in the occupation of a Ruler, being a building which immediately before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was his official residence by virtue of a declaration by the Central Government] under paragraph 13 of the Merged Slates (Taxation Concessions) Order, 1949, or paragraph 15 of the Part BStates (Taxation Concessions) Order, 1950;

5 [*****]

6 [(iv)] jewellery in the possession of any Ruler, not being his personal property, which has been recognised before the commencement of this Act by the Central Government as his heirloom or,where no such recognition exists, which the Board may, subject to any rules that may be made by the Central Government in this behalf, recognise as his heirloom at the time of his first assessment to wealth-tax under this Act:

7 [Provided that in the case of jewellery recognised by the Central Government as aforesaid, such recognition shall be subject to the following conditions, namely: -

(i) that the jewellery shall be permanently kept in India and shall not be removed outside India except for a purpose and period approved by the Board;

(ii) that reasonable steps shall be taken for keeping the jewellery substantially in its original shape;

(iii) that reasonable facilities shall be allowed to any officer of Government authorised by the Board in this behalf to examine the jewellery as and when necessary; and

(iv) that if any of the conditions hereinbefore specified is not being duly fulfilled, the Board may, for reasons to be recorded in writing, withdraw the recognition retrospectively with effect from the date of commencement of clause (b) of section 5 of the Rulers of Indian States (Abolition of Privileges) Act, 1972 (54 of 1972), and in such a case, wealth-tax shall become payable by the Ruler for all the assessment years after such commencement for which the jewellery was xempted on account of the recognition.

Explanation. -For the purposes of clause (iv) of the foregoing proviso, the fair market value of any jewellery on the date of the withdrawal of the recognition in respect thereof shall be deemed to be the fair market value of such jewellery on each successive valuation date relevant for the assessment years referred to in the said proviso:

Provided further that the aggregate amount of wealth tax payable in respect of any jewellery under clause (iv) of the foregoing proviso for all the assessment years referred to therein shall not in any case exceed fifty per cent, of its fair market value on the valuation date relevant for the assessment year in which recognition was withdrawn;]

8 [*****]

9 [10 [(v)] in the case of an assessee, being a person of Indian origin 11 [or a citizen of India (hereafter in this clause referred to as such person)] who was ordinarily residing in a foreign country and who, on leaving such country, has returned to India with the intention of permanently residing therein, moneys and the value of assets brought by him into India and the value of the assets acquired by him out of such moneys 12 [within one year immediately preceding the date of his return and at any time thereafter]:

Provided that this exemption shall apply only for a period of seven successive assessment year commencing with the assessment year next following the date on which such person returned to India.

Explanation. - 13 [1] A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born is undivided India].

14 [Explanation 2. - For the removal of doubts, it is hereby declared that moneys standing to the credit of such person in a Non-resident (External) Account, in any bank in India in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any rules made thereunder, on the date of his return to India, shall be deemed to be moneys brought by him into India on that date]

15 [*****]

16 [(vi) one house or part of a house or a plot of land belonging to an individual or a Hindu undivided family:

Provided that wealth-tax shall not be payable by an assessee in respect of an asset being a plot of land comprising an area of five hundred square metres or less.]

17 [*****]

1. The words "Subject to the provisions of sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets" substituted by Act 19 of 1970, Section 26(b)(i), for "wealth-tax shall not be payable by an assessee in respect of the following assets" w.e.f. 10-4-1971.

2. The words "(1) subject to the provisions of sub-section (1A)" omitted by Act 18 of 1992, Section 92(a)(i) w.e.f. 1-4-1993.

3. Added by Act 32 of 1985, Section 37(a)(i) w.e.f. 1-4-1986 and substituted by Act 4 of 1988, Section 160(1) w.e.f. 1-4-1998 and the substituted proviso omitted by Act 3 of 1989, Section 95(r) w.e.f. 1-4-1989.

4. The words "clause (22) or clause (22A) or" omitted by Act 21 of 1998, Section 68(A) w.e.f. 1-4-1999.

5. Substituted by Act 54 of 1972, Section 5 (a) w.e.f. 9-9-1972.

6. Clauses (iv) to (xiii) omitted by Act 18 of 1992, Section 92(a)(ii) w.e.f. 1-4-1993.

7.Inserted by Act 54 of 1972, Section 5(b) w.e.f. 9-9-1972.

8.Clauses (xv) to (xxxii)omitted by Act 18 of 1992, Section 92(a)(ii) w.e.f. 1-4-1993.

9.Inserted by Act 66 of 1976,Section 27(2)(e) w.e.f. 1-4-1977.

10.Clause (xxxiiii) re-numbered as clause (v) by Act 18 of 1992, Section92(a)(ii) w.e.f. 1-4-1993.

11.Inserted by Act 67 of 1984, Section 54(A)(ii) w.e.f. 1-4-1977.

12.Inserted by Act 23 of 1986, Section 40(a)(ii)(A) w.e.f. 1-4-1987.

13.Explanation re-numbered as Explanation 1 by Act 23 of 1986, Section40(a)(ii)(B) w.e..f 1-4-1977.

14.Inserted by Act 23 of 1986, Section 40(a)(ii)(B)( w.e.f. 1-4-1977.

15.Clause (xxxiv) omitted by Act 18 of 1992, Section 92(a)(ii) w.e.f.1-4-1993.

16.Clause (vi) Inserted by Act 38 of 1993, Section 39 w.e.f. 1-4-1994and Substituted by Act 21 of 1998, Section 68(b) w.e.f. 1-4-1999.

17.Sub-sections (1A) to (4) omitted by Act 18 of 1992, Section 92(b)w.e.f. 1-4-1993.


Section 6. Exclusion of assets and debts outside India

1[In computing the net wealth of an individual who is not a citizen of India or of an individual] or a Hindu undivided family not resident in India or resident but not ordinarily resident in India, or of a company not resident in India during the year ending on the valuation date-

(i) the value of the assets and debts located outside India; and

(ii) the value of the assets in India represented by any loans or debts owing to the assessee in any case where the interest, if any, payable on such loans or debts is not to be included in the total income of the assessee under2[section 10 ] of the Income-tax Act;

shall not be taken into account.

3[Explanation 1 . - An individual or a Hindu undivided family shall be deemed to be not resident in India or resident but not ordinarily resident in India during the year ending on the valuation date if in respect of that year the individual or the Hindu undivided family, as the case may be, is not resident in India or resident but not ordinarily resident in India within the me aning of the Income-tax Act.

[Explanation 1 A. - Where in the case of an individual the value of an asset in India is represented by any debt owing to hi m, being any moneys to hi s credit in a Non-resident (External) Account, the interest payable on which is not to be included in hi s total income under4[sub-clause (ii) of clause ( 4 )] of section 10 of the Income-tax Act, the provisions of this section shall, in relation to such asset, apply subject to the modification that the reference in this section to an individual not resident in India shall be construed as a reference to a person resident outside India as defined in clause (q) of section 2 of the Foreign Exchange Regulation Act, 1973 ( 46 of 1973 ).]

Explanation 2 . - A company shall be deemed to be resident in India during the year ending on the valuation date, if -

(a) it is a company formed and registered under the Companies Act, 1956 ( 1 of 1956 ), or is an existing company within the me aning of that Act; or

(b) during that year the control and management of its affairs is situated wholly in India.

1. Substituted by Act 11 of 1958 Section 14(c), for "In computing the net wealth of an individual" w.e.f. 1-4-1957.

2. Substituted by Act 46 of 1964, Section 6, for "sub-section (3) of section 4" w.e.f. 1-4-1965.

3. Inserted by Act 14 of 1982, Section 35 w.e.f. 1-4-1982.

4. Substituted by Act 3 of 1989, Section 61, for "clause (4A)" w.e.f. 1-4-1989.


Section 7. Value of assets how to be determined

1 [7. Value of assets how to bedetermined (1) Subject to the provisions of sub-section (2), the value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date determined in the manner laid down in Schedule III.

(2) The value of a house belonging to the assessee and exclusively used by him for residential purposes throughout the period of twelve months immediately preceding the valuation date, may, at the option of the assessee, be taken to be the value determined in the manner laid down in Schedule HI as on the valuation date next following the date on which he became the owner of the house or the valuation date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date is later.

2 [*****]

Explanation. - For the purposes of this sub-section, -

(i) where the house has been constructed by the assessee, he shall be deemed to have become the owner thereof on the date on which the construction of such house was completed:

(ii) "house" includes a part of a house being an independent residential unit.]

1. Substituted by Act 3 of 1989, Section 62 w.e..f. 1-4-1989.

2. Proviso omitted by Act 18 of 1992, Section 93 w.e.f. 1-4-1993.


Chapter III

Section 8. Wealth-tax authorities and their jurisdiction

1[8. Wealth-tax authorities and their jurisdiction.

The income-tax authorities specified in section 116 of the Income-tax Act shall be the wealth-tax authorities for the purposes of this Act and every such authority shall exercise the powers and perform the functions of a wealth-tax authority under this Act in respect of any individual, Hindu undivided family or company, and for this purpose hi s jurisdiction under this Act shall be the same as he has under the Income-tax Act by virtue of orders or directions issued under section 120 of that Act (including orders or directions assigning concurrent jurisdiction) or under any other provision of that Act.

Explanation. - For the purposes of this section, the wealth-tax authority having jurisdiction in relation to a person who is not an assessee within the me aning of the Income-tax Act shall be the wealth-tax authority having jurisdiction in respect of the area in which that person resides.]

2[*****]

1. Substituted by Act 4 of 1988, Section 131 w.e.f. 1-4-1988.

2. Sections 8A, 8AA and 8B omitted by Act 4 of 1988, Section 132 w.e.f. 1-4-1988. Earlier section 8A was inserted by Act 46 of 1964,Section 9 w.e.f. 1-4-1965, section 8AA was inserted by Act. 41 of 1975, Section 85 w.e.f. 1-10-1975 and section 8B was inserted by Act 20 of 1967, Section 34 (c), w.e.f. 1-4-1967.


Section 9. Control of wealth-tax authorities

1[9. Control of wealth-tax authorities

Section 118 of the Income-tax Act and any notification issued thereunder shall apply in relation to the control of wealth-tax authorities as they apply in relation to the control of the corresponding income-tax authorities, except to the extent to which the Board may, by notification in the Official Gazette, otherwise direct in respect of any wealth-tax authority.]

2[ *****]

1. Substituted by Act 4 of 1988, Section 131 w.e.f. 1-4-1988.

2. Section 9A omitted by Act 4 of 1988, Section 132 w.e.f. 1-4-1988. Earlier section 9A was Inserted by Act 29 of 1977, Section 39 and Schedule V, w.e.f. 10-7-1978.


Section 10. Instructions to subordinate authorities

1[10. Instructions to subordinate authorities

(1) The Board may, from time to time, issue such orders, instructions and directions to other wealth-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act, shall observe and follow such orders, instructions and directions of the Board:

Provided that no such orders, instructions or directions shall be issued

(a) so as to require any wealth-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or

(b) so as to interfere with the discretion of the Deputy Commissioner (Appeals) or Commissioner (Appeals) in the exercise of his appellate functions.

(2) Without prejudice to the generality of the foregoing power, -

(a) the Borad may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time (whether by way of relaxation of any of the provisions of sections2[14, 15, 16, 17, 17B], 18 and 35 or otherwise), general or special orders in respect of any class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other wealth-tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information;

(b) the Board may, if it considers it desireable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any wealth-tax authority not being a Deputy Commissioner (Appeals) or Commissioner (Appeals), to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.]

3[*****]

1. Substituted by Act 4 of 1988, Section 131 w.e.f. 1-4-1988.

2. Substituted by Act 12 of 1990, Section 53, for "16, 17" w.e.f. 1-4-1990.

3. Section 10A omitted by Act 4 of 1988, Section 132 w.e.f. 1-4-1988. Ealier section 10A was Inserted by Act 46 of 1964, Section 10 w.e.f. 1-4-1965.


Section 11. Jurisdiction of Assessing Officers and power to transfer cases

1[11. Jurisdiction of Assessing Officers and power to transfer cases

(1) The provisions of sections 124 and 127 of the Income-tax Act shall, so far as may be, apply for the purposes of this Act as they apply for the purposes of the Income-tax Act, subject to the modifications specified in sub-section (2).

(2) The modifications referred to in sub-section (I) shall be the following, namely: -

(a) in section 124 of the Income-tax Act,--

(i) in sub-section (3), references to the provisions of the Income-tax Act shall be construed as references to the corresponding provisions of the Wealth-tax Act;

(ii) sub-section (5) shall be omitted:

(b) in section 127 of the Income-tax Act, in the Explanationbelow sub-section2[(4)], references to proceedings under the Income-tax Act shall be construed as including references to proceedings under the Wealth-tax Act,]

3[*****]

1. Substituted by Act 4 of 1988, Section 131 w.e.f. 1-4-1988.

2. Substituted by Act 3 of 1989, Section 63 w.e.f. 1-4-1988.

3. Sections 11A, 11AA, 11B and 12 omitted by Act 4 of 1988, Section 132 w.e.f. 1-4-1988. Earlier sections 11A and 12 were Substituted by Act 46 of 1964, Section 11, for section 12 w.e.f. 1-4-1965 and section 11A was Substituted by Act 20 of 1967, Section 35(f) w.e.f. 1-4-1967, section 11AA was Inserted by Act of 1970 Section 26(c) w.e.f. 1-4-1970 and section 11B was Inserted by Act 20 of 1967, Section 34(g) w.e.f. 1-4-1967 and was amended by Act 41 of 1975, Section 87 w.e.f. 1-10-1975.