The Wealth Tax Act requires tax to be paid on the wealth held by an individual. Wealth is defined as unproductive assets, such as cash over Rs 50,000, land, motor cars, gold, silver, utensils or bullion and ornaments, luxury cars. Tax at the rate of 1% has to be paid on wealth over Rs 30 lakh, which is calculated according to the provisions of the Act, and a wealth tax return has to be filed. Individuals, Hindu Undivided Families and companies should file their wealth tax return in Form BA, which has to be signed by the assessee.
Due date: The due date for filing wealth tax return is the same as the one applicable to an assessee for filing the income tax return. For individuals and HUFs, the due date is 31 July of the following financial year for which the return is being filed.
Documents: The calculation for the value of each asset, according to Schedule III of the Wealth Tax Act, needs to be attached along with the return. The relevant documents supporting the valuation of the asset must also be attached with the return.
Filing return: The wealth tax return needs to be filed with the income tax office ward/circle applicable for one's income tax return. If a person fails to file the return and pays the applicable wealth tax, he is liable to pay interest at 1% for every month of delay.
Points to note:
> The assets transferred to a spouse or minor child or any other person without consideration are to be included in the net wealth of the individual.
> Any one residential property can be excluded from the wealth of an assessee and a person is free to choose which property he wants to exclude.
> The financial assets, such as investments in shares and mutual funds, are exempt from wealth tax.