February 21 , 2013
Hardly anyone forgets to file income tax returns thanks to clamour surrounding it among the salaried lot. TDS applies on some sources of income so people who want to make claim are vigilant about filing it on time.
However there is a less popular variant of direct tax returns that must be mandatorily filed by those liable to pay it- wealth tax returns. It wouldn't be surprising if, in the first place, you are not aware whether you are liable or not to pay wealth tax.
What is wealth tax?
A tax of 1% is to be paid on your net wealth exceeding Rs 30 lakhs, every year. Shares, mutual funds, bonds, FDs, insurance policies and such financial assets earning income are not charged under wealth tax. Vacant residential properties, land, cash over Rs 50,000, jewelry, cars, yachts and such assets come under 'wealth' for wealth tax.
However residential properties are exempted if they are let out and one residential house you stay in can be excluded. Plots of land are exempted if they are less than 500 square meters in area. So an average salaried employee would be left with jewelry or cars if their value is over Rs 30 lakhs. If loans were taken to acquire an asset being charged under wealth tax, you can deduct those loans from the value of the asset. Assets are to be valued on 31st March of every year.
Wealth tax returns
If your net wealth turns out to be more than Rs 30 lakhs you must mandatorily file wealth tax returns by due date. Due date for filing wealth tax returns is same as that for filing income tax returns. Wealth tax return has to be filed in Form BA. You can download it from http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/pdf/WTR57FORMBA.pdf
Form BA is not complicated to fill. In it you declare your net wealth, tax payable on net wealth net and amount of refund, if any. If you have paid wealth tax in advance you must attach challans. Form BA has separate sheet for computing net wealth.
Filing wealth tax returns
Duly filled form BA should be signed by you and submitted along with challans and supporting valuation documents to the assessing office of your jurisdiction.
Non filing of wealth tax returns
Like it is with any law we fail to abide by, non-filing of wealth tax returns is punishable. If you miss filing it by due date you can file it before the end of the assessment year with payment of interest of 1% for every month lapsed.
If wealth tax assessing officers ever find out anyone evading wealth tax or paying less than what is due they can punish such a person with fine and/or imprisonment.