Question

Explain the Deductions of under wealth tax act

Answer 1

Wealth Tax Act. The Wealth Tax Act, 1957 governs the taxation process associated with the Net Wealth of an Individual, a Hindu Undivided Family (HUF), or a Company possesses on the Valuation Date. ... It is an Act that provides for the levy of Wealth Tax on liable Assessees and came into force on April 1, 1957.

Answer 2

In India, Wealth Tax is required to be paid by anyone whose personal assets exceed Rs 30 lakh or more than it. It is like Direct Tax and is set under the provisions of the Wealth Tax Act, 1957.

Computation of wealth tax:

Every individual Hindu undivided family whose net worth is more than 30lakh is liable to pay wealth tax. Now here is method how we calculate wealth tax.

>Compute the total assets on 31/3 of prev. year

>Reduce amount of debt taken for that asset which is still pending for payment on 31/3.

>Minus exemption available.

>Minus basic exemption limit of Rs. 30,00,000

>Calculate net amount and charge 1% tax on it.

Taxable asset under wealth tax: Guest house,Residential house,Commercial house [ section 2(EA)(I) ], Motor cars [ section 2(EA)(II) ], Yatch, Boats, Aircrafts [ section 2(EA) (IV) ], Urabn land [ section 2(EA) (V) ]