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No wealth tax from assessment year 2016-17 – confusions prevails

Wealth Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 5-7-2016 Last Replied Date:- 8-7-2016 - Confusions and queries: Confusions are prevailing in mind of many and queries are received about liability for wealth tax for assessment year 2016-17 (valuation date 31.03.2016 previous year ended 31.03.2016). As per my understanding, wealth tax is not payable from assessment year 2016 in view of amendment brought vide THE FINANCE ACT, 2015 w.e.f. 1st day of April, 2016. After amendment, the applicable char .....

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by which the net wealth exceeds fifteen lakh rupees.] Provided that in the case of every assessment year commencing on and from the 1st day of April, 2010, the provisions of this section shall have effect as if for the words fifteen lakh rupees , the words thirty lakh rupees had been substituted.] Assessment year has been defined in clause (d) of sub-section 2 as follows: Definitions. 2. In this Act, unless the context otherwise requires, (d) assessment year means a period of twelve months comme .....

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r that year : [Provided that (i) Xx (ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment year ; (ii) where an assessment is made in pursuance of section 19A, the valuation date shall be the same valuation date as would have been adopted in respect of the net wealth of the deceased if he were alive; From the Income-tax Act,1961: [ Previous ye .....

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ncial year.] Example: We can illustrate the assessment year, valuation date and previous year, for example assessment year commences on 01.04.2015 for assessment year 2015-16 for which previous year ends on 31.03.2015 and the valuation date for purpose of wealth tax will be 31.03.2015. For another example, assessment year commences on 01.04.2016 for assessment year 2016-17 for which previous year ends on 31.03.2016 and the valuation date for purpose of wealth tax will be 31.03.2016. After amendm .....

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-17 there is no wealth tax liability. From the Finance Bill 2015 and objects: It is worth to mention the proposal in the Finance Bill 2015 and notes and memorandum in this regard. These are reproduced below: THE FINANCE BILL, 2015 Wealth-tax Amendment of Act 27 of 1957. 79. In section 3 of the Wealth-tax Act, 1957, in sub-section (2), with effect from the 1st day of April, 2016, after the words, figures and letters from the 1st day of April, 1993 , the words, figures and letters but before the 1 .....

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sessment years. It is proposed to amend the said sub-section (2) so as to provide that wealth-tax shall not be charged in respect of assessment year commencing on or after 1st day of April, 2016. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent years. Request to readers and authorities: Readers including tax authorities are requested to inform author, if they have any reason to differ from the views expres .....

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ax Act, 1957 ( the WT Act ) was introduced w.e.f. 01.04.1957 on the recommendation of Prof. Nicholas Kaldor for achieving twin major objectives of reducing inequalities and helping the enforcement of Income-tax Act through cross checks. Accordingly, all the assets of the assessees were taken into account for computation of net-wealth. The levy of wealth-tax was thoroughly revised on the recommendation of Tax Reform Committee headed by Raja J. Chelliah vide Finance Act, 1992 with effect from 01.0 .....

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lth, only few specified assets are taken into account. The actual collection from the levy of wealth-tax during the financial year 2011-12 was ₹ 788.67 crore and during the financial year 2012-13 was ₹ 844.12 crore only. The number of wealth-tax assessee was around 1.15 lakh in 2011-12. Although only a nominal amount of revenue is collected from the levy of wealth-tax, this levy creates a significant amount of compliance burden on the assessees as well as administrative burden on the .....

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