wealth tax act
Querist :
Anonymous
(Querist) 21 December 2009
This query is : Resolved
if any asset transferred by individual to spouse & individual die then in whose hands clubbing of aset shall be done whether after death (if person has not made any will) the spouse has the first right or children has first right ?
if spouse has 1st right then income tax as well as wealth tax shall be paid by spouse ?
if children of individual (major ) has first right then they will pay WT + It?
which lawisapplicable in addition to wealth tax act 1957
Querist :
Anonymous
(Querist) 21 December 2009
which section of law grants this right pls specify?
Vineet
(Expert) 21 December 2009
If the asset has been transferred to spouse by the individual she is the legal owner of the asset and therefore question of first or second right does not arise.
For IT and WT purposes, it is a deeming provision that income tax or WT arising in relation to asset transferred to one's spouse without adequate consideration shall be clubbed in the hands of individual. This is done to checkmate diversion of income.
However, once the individual dies, he ceases to be an assessee and therefore the IT and WT in respect of the asset transferred to spouse shall be liability of the concerned owner of the asset.
Direct Tax Laws (Income Tax and Wealth Tax) do not create any rights in anybody's favour by deeming provisions. The Succession and Inheritence issues are to be addressed by relevant personal laws or Indian Succession Act.
