Exemption for agricultural land u/s 5(1) (iva) of the Wealth-tax Act, 1957. - Income Tax - 949/CBDT

INSTRUCTION NO. 949/CBDT Dated : April 26, 1976 Section(s) Referred: 5(1A) Statute: Wealth Tax Act, 1957 With effect from 1-4-1975 exemption for agricultural land u/s 5(1) (iva) of the Wealth-tax Act, 1957 has been linked with exemption for other assets of the type mentioned in section 5(1A), for exemption upto Rs. 1,50,000/- in the aggregate. In the light of this amendment, the method of calculation of wealth-tax relating agricultural land for making the necessary entries in the Demand and Collection Register is explained in the following paragraphs. 2. As a first step, the wealth-tax attributable to assets of the type mentioned in section 5(1A) included in the net wealth should be worked out by applying the average rate of wealth-tax to the value of such assets as reduced by the amount of exemption under the said section. The second step would be to work out the proportionate wealth-tax attributable to agricultural land: this amount will be so calculated that it would bear the same proportion to the tax calculated in the first step as the value of agricultural land bears to the value of the assets of the type mentioned in the said sub-section without deduction for the exemption under that sub-section. 3. In case the value of the assets of the type mentioned in section 5(1A), including value of agricultural land, is less than Rs. 1,50,000/-, there would obviously be no wealth-tax attributable to such assets or to the agricultural land.