Vide Notification No. 32/2014 dated 23-06-2014, CBDT has made mandatory filing of Wealth Tax Return only by electronic means for certain persons including Company and an assessee being individual or HUF who is liable to audit u/s 44AB.
From Assessment Year 2014-2015 onwards, Company and an assessee being individual or HUF who is liable to audit u/s 44AB are required to furnish Form BB (Return of Net Wealth) electronically under digital signature. Some of the important points are:
- New wealth tax return form BB (E-Filing) shall be applicable from assessment year 2014-15 for Years Prior to this Form BA will continue to remain applicable.
- E filing of wealth tax return is mandatory for all type of persons for assessment year 2014-15 onwards except for Individual / HUF to whom provision of section 44AB (tax audit) is not applicable in assessment year 2014-15.
- Individual / HUF to whom provision of section 44AB (tax audit) is not applicable in assessment year 2014-15 may file wealth tax return on paper form.
- Exemption to Individual / HUF from e-filing of form BB is granted only for AY 2014-15.so from next year (AY 2015-16) all person are required to e file wealth tax return with digital signature.
- Form BB shall not be accompanied by any document i.e.- statement of computation of tax payable, valuation report of registered valuer, proof of tax or interest deposit.
FAQ on Wealth Tax
Q. What is Wealth tax and on whom and when it is applicable?
A. Wealth Tax is applicable on Individual, HUF and a company if the net wealth of such person exceeds Rs. 30 Lakh. Wealth tax is charged @ 1% on net wealth exceeding Rs. 30 Lakh.
Q. What is the meaning of net wealth?
A. Net wealth means assets minus debt incurred for such asset.
Q. What is the meaning of asset as per Wealth Tax Act?
A. Asset includes:
- Motor Cars (Other than used by the assessee in the business of running them on hire or used by the assessee as stock in trade)
- Yachts, boats and aircrafts (other than used by the assessee for commercial purposes)
- Jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal. (other than used by the assessee as stock in trade)
- Any building or land (with some exceptions like):
o One residential home is exempt from Wealth Tax or urban land measuring 500 sqm or less.
o Any residential property which has been let out for a minimum period of 300 days in the previous year
o Any house occupied by the assessee for the purpose of any business or profession carried on by him
o Commercial establishments or complexes
- Cash in excess of Rs. 50000 in case of individual or HUF
- Deemed Assets i.e assets transferred without consideration to family etc.
- Assets of minor child barring some exception
- Value of assets in partnership firm to be clubbed with the assets of partner
Q. What is the last date of filing return?
A. Last date to file the return is:
- 31st July for Individuals or HUF
- 30th Sep for Company and individual or HUF whose accounts are required to be audited u/s 44AB
Q. what can happen if I do not pay the tax or file the return?
- Belated or revised return can be filed within one year from the end of assessment year after paying 1% per month of tax as penalty for delay.
- Penalty upto 100% of tax in case of non-payment of wealth tax
- Penalty upto 500% of tax in case of concealment of wealth tax
- In case of willful default, imprisonment upto 7 years can be imposed
(Author CA Rahul Jain is Partner in Delhi Based CA firm RPMD & Associates and can be reached at firstname.lastname@example.org)