Wealth tax
Bhaskar Dey
(Querist) 01 December 2014
This query is : Resolved
A person owns two properties. One is self occupied and the other is lying vacant. The one lying vacant costs more than 30 (Thirty) Lakhs.
In this situation, the vacant property will be taken as “Deemed let out” and Income Tax have to be paid on “Income on House Property”. Again, because the property costs more than 30 Lakhs, Wealth Tax will also be applicable.
My question is, is it necessary to pay both the Taxes? Or, since the owner is paying Income Tax on “Income from house property”, the Wealth Tax will be waived or will not have to be paid.
Thanks in advance.
Anirudh
(Expert) 01 December 2014
Income tax is charged on a person who has taxable income.
Wealth tax is charged on a person who has net wealth amounting to Rs. 30 lakhs or more.
Both are independent levies. Therefore one has to pay both the taxes wherever applicable.
Just because one pays income tax on the income/deemed income from the property, does not mean he has no wealth. The wealth is available separately. On that, wealth tax, if applicable has to be paid.
Similarly, just because one pays wealth tax, does not mean he has no income from the property. So, on the income one has to pay income tax, if it is a taxable income.
ajay sethi
(Expert) 01 December 2014
well advised by MR anriudh
R.K Nanda
(Expert) 01 December 2014
consult tax lawyer.
Sailesh Kumar Shah
(Expert) 01 December 2014
No room left by learned expert mr.anirudh to add further.
Bhaskar Dey
(Querist) 01 December 2014
Thank you so much all the experts.Special thanks to Mr.Anirudh who has explained it clearly. However, a question remains.
According to Income Tax law, If a property of more than 30 lakhs is given on rent in the last financial year for more than 300 days, then Wealth Tax is exempted. In my case, the tax payer, although has not given on rent, but is paying "deemed Let out" rent for 365 days. Will this be not taken into account for exemption on Wealth Tax?
Thanks again.
Anirudh
(Expert) 03 December 2014
Which income tax provision says so?
Please indicate.
