1370. Exemption of units under section 32(1)(ba) of Unit Trust of India Act – Whether over and above and independent of exemption under clause (xxv) of sub-section (1)
1. A doubt has been raised in certain quarters as to the extent to which units of the Unit Trust of India are exempt for the purpose of wealth-tax assessment.
2. The exemption under clause (xxv) of sub-section (1) of section 5 is available subject to the limit of Rs. 1,50,000 laid down under sub-section (1A) of section 5 for the listed investments and also subject to the condition that the asset should have been owned by the assessee for a period of at least six months ending with the relevant valuation date as laid down in clause (b) of sub-section (3) of section 5.
3. The Unit Trust of India Act, as amended by the Trust Laws (Amendment) Act, 1975 and the Unit Trust of India (Amendment) Act, 1976 provides in clause (ba) of sub-section (1) of section 32 that notwithstanding anything contained in the Wealth-tax Act, wealth-tax will not be payable by an assessee, being an individual or a Hindu undivided family who is resident in India, in respect of, and there shall not be included in the net wealth of the assessee, units of the value not exceeding Rs. 25,000. Thus, the exemption under the aforesaid provision is not subject to the limitation and restriction provided under section 5(1A) or 5(3)(b).
4. In view of the position stated above, it is clarified that the exemption under section 32(1)(ba ) of the Unit Trust of India Act, will be over and above and independent of the exemption provided under section 5(1)(xxv) read with sections 5(1A) and 5(3)(b).
Circular No. 323 [F. No. 317/39/80-WT], dated 22-1-1982.