Wealth-tax
Clause 109 of the Bill seeks to amend section 2 of the Wealth-tax Act relating to definitions.
The existing provisions of clause (ea) of the aforesaid section 2 provide that in the case where a house is allotted for residential purposes by a company to an employee or an officer or director who is in the whole time employment having a gross annual salary of less than five lakh rupees, such house shall not be included in the definition of assets on which wealth-tax is charged.
It is proposed to amend item (1) of sub-clause (i) of the aforesaid clause so as to raise the aforesaid gross annual salary limit of employee or an officer or director who is in the whole time employment from five lakh rupees to ten lakh rupees.
This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.
Clause 110 of the Bill seeks to amend section 17 of the Wealth-tax Act relating to wealth escaping assessment.
The existing provisions of sub-section (1) of the aforesaid section 17 enable the Assessing Officer to assess or re-assess wealth which has escaped assessment for any assessment year, after recording reasons for doing so. It is further provided that once an assessment is reopened, any other wealth which has escaped assessment and which comes to the notice of the Assessing Officer subsequently in the course of the proceedings under this section, can also be included in the assessment.
The first proviso to the aforesaid sub-section provide that if an assessment has been made for the relevant assessment year under sub-section (3) of section 16 or this section, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless the wealth has escaped assessment due to the failure on the part of the assessee to file a return under section 14 or section 15 or in response to a notice issued under sub-section (4) of section 16 or this section or to disclose fully and truly all material facts necessary for his assessment.
It is proposed to insert a proviso to the aforesaid sub-section so as to provide that nothing contained in the first proviso shall apply in a case where any net wealth in relation to any asset (including financial interest in any entity) located outside India chargeable to tax, has escaped assessment for any assessment year.
These amendments will take effect from 1st July, 2012.
It is further proposed to amend sub-section (1A) of the aforesaid section so as to insert a new clause (c) to the aforesaid sub-section so as to provide that if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the net wealth in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year.
It is also proposed to amend the Explanation to the aforesaid sub-section so as to insert a clause which provides that where a person is found to have any asset (including financial interest in any entity) located outside India, it shall also be deemed to be a case where net wealth chargeable to tax has escaped assessment.
It is also proposed to insert a new Explanation 2 so as to provide that the provisions of the aforesaid section (as amended by the Finance Act, 2012) shall also be applicable for the assessment years beginning on or before the 1st day of April, 2012.
These amendments will take effect from 1st day of July, 2012.
Clause 111 of the Bill seeks to amend section 17A of the Wealth- tax Act relating to time limit for completion of assessment and reassessment.
The existing provisions of the aforesaid section 17A, inter alia, provide for time limit for completion of assessments and reassessments of net wealth by the Assessing Officer.
It is proposed to amend the aforesaid section so as to revise the time limits for completion of assessment and reassessment.
The revised time limits shall be the time limits specified under the aforesaid section, as respectively increased by three months.
These amendments will take effect from 1st July, 2012.
Clause 112 of the Bill seeks to amend section 45 of the Wealth-tax Act relating to Act not to apply in certain cases.
The existing provisions of the aforesaid section 45 provide that Wealth-tax shall not be levied in respect of the net wealth of entities enumerated in that section.
It is proposed to insert a new clause (k) in the aforesaid section so as to provide that tax shall not be levied in respect of net wealth of the Reserve Bank of India.
This amendment will take effect retrospectively from 1st April, 1957, and will, accordingly, apply in relation to the assessment year 1957-1958 and subsequent assessment years.
Clause 113 of the Bill seeks to provide for validation of demand, etc., under Income-tax Act, 1961 in certain cases in respect of income accruing or arising through or from the transfer of a capital asset situate in India in consequence of transfer of a share or shares of a company registered or incorporated outside India or in consequence of any agreement or otherwise outside India.
This clause will take effect from the date on which this Bill receives the assent of the President
