Lets understand the exemptions for wealth tax for the various items discussed below.
Exemptions for: Motor cars and Air/Water Vehicles
These vehicles when either used as stock in trade or for Commercial purposes are exempt from being included in the wealth tax computation.
Jeweller:y Jewellery used as stock in trade is exempt.
Exemptions for: Urban Land
The following are the exempt from being charged to wealth tax.
- Land on which construction is not permissible under any law
- Land occupied by a building which has been constructed on relevant approvals
- Unused land held for industrial purposes for more than 2 yrs from acquision date
- Land held as stock in trade
- Any trust or other obligation held for public purposes
- Share of a co-parcerner in a HUF
- An individual or HUF having one house or part of house upto 500 sq mts
Here's an example to understand the application of one of the element of wealth tax we have discussed above on wealth tax.
Mr. X purchased a plot of land on 1.2.2004 for industrial purposes. This land was not used by him.
Applicability of this land for wealth tax for as on 31.2.2004 onwards
31.3.2004 Not an asset as per Wealth Tax as it was purchased for industrial purpose
31.3.2005 Not an asset as per Wealth Tax as it was purchased for industrial purpose
31.3.2006 on wards An asset under WT as two years have passed and is still unused for the purpose.
Shweta Jain, a Graduate of Business Management from Jain College and a CFPCM to boot, brings excellent organizational and management skills to the table. She is in charge of the financial planning for our clients and spreading financial literacy.Tweet