 Wealth Tax is a Direct Tax under the Wealth Tax Act,

1957
 Wealth Tax is applicable for individual, HUF, and
Company
 Wealth Tax is charged every assessment year on the Net
Wealth of the assessee on the valuation date.
 Valuation date is 31 March of the previous year
 Rate of Tax - 1% on the net wealth exceeding Rs. 15 lakh
 Net Wealth = Excess of assets over debts
 Wealth Tax is not applicable for:
 Section 25 company
 Co-operative society
 Social Club
 Political party
 Mutual Funds
 Guest house, commercial building or residential
house
 Farm house within 25 kms of the local limits
 Exceptions:
 House held as stock-in-trade
 Building used in business or profession
 Commercial establishment or complex
 Residential property let out for not less than 300
days
 Residential house occupied by employee or officer or
director whose “Gross Annual Salary” is not more
than Rs. 5 lac
 Motor cars
 Exception:
 Motor car used by the assessee in the business of running them on
hire
 Motor car treated as stock-in-trade
 Jewellery, buillion utensils of gold, silver etc.
 Yachts, boats and aircrafts (other than those used for
commercial purpose)
 Cash in hand in excess of Rs. 50,000/- for individual and HUF.
For others, any amount not recorded in the books of accounts
 Urban land
 Exception
 Land on which construction of building is not permissible
 Unused land held by the assessee for industrial purpose of 2 years
from the date of acquisition
 Stock-in-trade for a period of 10 years from the date of acquisition
 Step 1 - Find Gross Maintainable Rent (GMR)
 Annual rent received / receivable or annual
value assessed by the local authority whichever
is higher, if let our or
 Annual rent assessed by local authority or fair
rent, if property situated outside the jurisdiction
of the local authority
 Step 2 – Find Net Maintainable Rent (NMR)
 Net maintainable rent = GMR less
 (i) Amount of local taxes levied on the property
 (ii) a sum exqual to 15% of GMR
 Step 3 - Capitalize NMR for valuation
 If the property is on free hold land, value of the
property = NMR x grossing factor 12.5
 If the property is on leasehold and the balance of
lease period is more than 50 years, value of the
property = NMR x factor 10
 ŸIf the property is on leasehold and the balance
of lease period is less than 50 years, value of the
property = NMR x factor 8
 Rate per sq ft = Value of the property divided by total
area (Specify built up / Carpet)
Step 4 – Add premium for the unbuilt area:
 The details of all Vacant Urban plots owned by
NABARD and recorded in the books of the Accounting
Units as on 31-03-2009 should be furnished in the
prescribed format.
 Wealth Tax is payable in respect of such land which
is vacant for more than 2 years as on 31-3-2009.
 The details of such vacant land (freehold and / or
leasehold), additions/ deletions (i.e new purchases /
fresh constructions), if any, and value thereof, during
the financial year 2008-09 should also be indicated in
the format.
 Valuation Certificate by an approved Government
Valuer as at the end of the financial year 2008-09, in
respect of such vacant land/s, possessed by NABARD
should also be furnished.
 Indicate the ‘Insured Value” in respect of all
motor vehicles as per the insurance value
shown in the insurance policy.
 Send three legible copies of insurance policies
of the motor cars
 Please ensure that the insurance value is
invariably indicated in the insurance policies
and that it pertains to valuation dated 31
March 2009.
 In case the period covered under policy is for a
broken period i.e July to June or Dec. to Jan or
any other such period, then in such cases, copies
both the policies are required to be sent so as to
cover the entire reference period i.e the period
from 1 April 2008 to 31 March 2009