Section 5: Exemptions in respect of certain assets

The Wealth-Tax Act, 1957Central Act · Act 27 of 1957

Exemptions in respect of certain assets.

[[***] Wealth-tax shall not be payable by an assessee in respect of the following assets], and such assets shall not be included in the net wealth of the assessee—

(i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India :

[Provided that nothing contained in this clause shall apply to any property forming part of any business, not being a business referred to in clause (a) or clause (b) of sub-section (4A) of section 11 of the Income-tax Act in respect of which separate books of account are maintained or a business carried on by an institution, fund or trust referred to in [***] clause (23B) or clause (23C) of section 10 of that Act;]

(ii) the interest of the assessee in the coparcenary property of any Hindu undivided family of which he is a member ;

(iii) [any one building in the occupation of a Ruler, being a building which immediately before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was his official residence by virtue of a declaration by the Central Government] under paragraph 13 of the Merged States (Taxation Concessions) Order, 1949, or paragraph 15 of the Part B States (Taxation Concessions) Order, 1950;

to 5(to 5) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

6[(iv)](6[(iv)]) jewellery in the possession of any Ruler, not being his personal property, which has been recognised before the commencement of this Act, by the Central Government as his heirloom or, where no such recognition exists, which the Board may, subject to any rules that may be made by the Central Government in this behalf, recognise as his heirloom at the time of his first assessment to wealth-tax under this Act :

[Provided that in the case of jewellery recognised by the Central Government as aforesaid, such recognition shall be subject to the following conditions, namely :—

(i) that the jewellery shall be permanently kept in India and shall not be removed outside India except for a purpose and period approved by the Board ;

(ii) that reasonable steps shall be taken for keeping the jewellery substantially in its original shape ;

(iii) that reasonable facilities shall be allowed to any officer of Government authorised by the Board in this behalf to examine the jewellery as and when necessary ; and

(iv) that if any of the conditions hereinbefore specified is not being duly fulfilled, the Board may, for reasons to be recorded in writing, withdraw the recognition retrospectively with effect from the date of commencement of clause (b) of section 5 of the Rulers of Indian States (Abolition of Privileges) Act, 1972, and in such a case, wealth-tax shall become payable by the Ruler for all the assessment years after such commencement for which the jewellery was exempted on account of the recognition.

Explanation.—For the purposes of clause (iv) of the foregoing proviso, the fair market value of any jewellery on the date of the withdrawal of the recognition in respect thereof shall be deemed to be the fair market value of such jewellery on each successive valuation date relevant for the assessment years referred to in the said proviso :

Provided further that the aggregate amount of wealth-tax payable in respect of any jewellery under clause (iv) of the foregoing proviso for all the assessment years referred to therein shall not in any case exceed fifty per cent of its fair market value on the valuation date relevant for the assessment year in which recognition was withdrawn;]

to 9(to 9) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

10[11[(v)](10[11[(v)]) in the case of an assessee, being a person of Indian origin [or a citizen of India (hereafter in this clause referred to as such person)] who was ordinarily residing in a foreign country and who, on leaving such country, has returned to India with the intention of permanently residing therein, moneys and the value of assets brought by him into India and the value of the assets acquired by him out of such moneys [within one year immediately preceding the date of his return and at any time thereafter] :

Provided that this exemption shall apply only for a period of seven successive assessment years commencing with the assessment year next following the date on which such person returned to India.

Explanation [1].—A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.]

[Explanation 2.—For the removal of doubts, it is hereby declared that moneys standing to the credit of such person in a Non-resident (External) Account in any bank in India in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder, on the date of his return to India, shall be deemed to be moneys brought by him into India on that date;]

17[(vi(17[(vi) one house or part of a house or a plot of land belonging to an individual or a Hindu undivided family :

Provided that wealth-tax shall not be payable by an assessee in respect of an asset being a plot of land comprising an area of five hundred square metres or less.]

(xxxiv) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

(1A) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

(2) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

(3) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

(4) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]

Where this provision sits

Act	The Wealth-Tax Act, 1957
Section	5
Marginal note	Exemptions in respect of certain assets
Jurisdiction	Central
Status	In force as published by the source

How this provision has been amended

Taken from the footnotes printed with the provision by the source. Where a footnote names the amending instrument, it is quoted as printed.

other. Letter [F. No. 320/157/75-WT], dated 19-11-1975. For details, see Referencer.
substituted. Words "(1) Subject to the provisions of sub-section (1A)," omitted by the Finance Act, 1992, w.e.f. 1-4-1993. Earlier the expression was amended by the Finance Act, 1970, w.e.f. 1-4-1971.
substituted. Restored to its original provision by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Proviso was earlier substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. It was originally inserted by the Finance Act, 1985, w.e.f. 1-4-1986.
omitted. Words "clause (22) or clause (22A) or" omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.
substituted. Substituted for "any one building in the occupation of a Ruler declared by the Central Government as his official residence" by the Rulers of Indian States (Abolition of Privileges) Act, 1972, with retrospective effect from 28-12-1971.
other. Prior to omission, clauses (iv) to (xiii), as amended by the Finance Act, 1964, w.e.f. 1-4-1964, the Finance Act, 1969, w.e.f. 1-4-1970, the Taxation Laws (Amendment) Act, 1970, w.r.e.f. 1-4-1965, the Finance Act, 1970, w.e.f. 1-4-1971, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972/w.r.e.f. 1-4-1963, the Finance Act, 1974, w.e.f. 1-4-1975, the Finance Act, 1975, w.e.f. 1-4-1975/w.e.f. 1-4-1976,…
renumbered. Renumbered for "(xiv)" by the Finance Act, 1992, w.e.f. 1-4-1993.
other. See Circular No. 3D(WT) of 1960, dated 1-4-1960. For details, see Referencer.
inserted. Inserted by the Rulers of Indian States (Abolition of Privileges) Act, 1972, w.e.f. 9-9-1972.
substituted. Prior to omission, clauses (xv) to (xxxii), as amended by the Finance Act, 1958, w.r.e.f. 1-4-1957, the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962, the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962, the Finance Act, 1963, w.e.f. 1-4-1963, the Wealth-tax (Amendment) Act, 1964, w.e.f. 1-4-1965, the Finance Act, 1965, w.e.f. 1-4-1965, the Finance (No. 2) Act, 1965, w.e.f. 1-4-1965, the Taxa…
renumbered. Renumbered for "(xxxiii)" by the Finance Act, 1992, w.e.f. 1-4-1993.
inserted. Inserted by the Finance Act, 1976, w.e.f. 1-4-1977.
other. See Circular No. 411, dated 25-2-1985. For details, see Referencer.
inserted. Inserted by the Taxation Laws (Amendment) Act, 1984, w.r.e.f. 1-4-1977.
inserted. Inserted by the Finance Act, 1986, w.e.f. 1-4-1987.
inserted. Inserted by the Finance Act, 1986, w.r.e.f. 1-4-1977.
inserted. Inserted by the Finance Act, 1986, w.e.f. 1-4-1977.
substituted. Substituted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999. Prior to its substitution, clause (vi), as inserted by the Finance Act, 1993, w.e.f. 1-4-1994, read as under : "(vi) one house or part of a house belonging to an individual or a Hindu undivided family;"
other. For relevant circulars, see Referencer.
inserted. Prior to omission, clause (xxxiv) as inserted by the Finance Act, 1976, w.e.f. 1-4-1976, read as under : "(xxxiv) in the case of an individual, being a citizen of India, who is not resident in India during the year ending on the valuation date, the value of any equity shares in any company of the type referred to in clause (d) of section 45 which is engaged in the business of manufacture or produ…
substituted. Prior to omission, sub-section (1A), as amended by the Finance Act, 1970, w.e.f. 1-4-1971, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, the Finance Act, 1972, w.e.f. 1-4-1973, the Finance Act, 1974, w.e.f. 1-4-1975, the Finance Act, 1975, w.e.f. 1-4-1975, the Finance Act, 1982, w.e.f. 1-4-1983, the Finance Act, 1984, w.e.f. 1-4-1985, the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1985, th…
substituted. Prior to omission, sub-section (2), as amended by the Taxation Laws (Amendment) Act, 1962, w.e.f. 13-12-1962 and the Finance Act, 1968, w.e.f. 1-4-1969, read as under : "(2) Wealth-tax shall not be payable by an assessee in respect of any deposit made by the assessee with the Government or in any security of the Government or of a local authority not specified in clause (xv) or clause (xvi) or cl…
substituted. Prior to omission, sub-section (3), as amended by the Finance Act, 1963, w.e.f. 1-4-1963, the Wealth-tax (Amendment) Act, 1964, w.e.f. 1-4-1965, the Finance Act, 1970, w.e.f. 1-4-1971, the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972, the Finance Act, 1972, w.e.f. 1-4-1973, the Finance Act, 1975, w.e.f. 1-4-1975, the Finance Act, 1982, w.e.f. 1-4-1983, the Finance Act, 1984, w.e.f. 1-4-1985, the Ta…
substituted. Prior to omission, sub-section (4), as inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989, read as under : "(4) Where the assessee is a partner of a firm or member of an association of persons, and the firm or association owns any one or more of the assets which are exempt under sub-section (1), then, for the purposes of his assessment under this Act, the value of his interest…

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