Wealth-tax Act,1957
Act No : 27
Section :
Net wealth to include certain assets.
4. Net wealth to include certain assets. (1) In computing the net wealth of an individual, 3*[there shall be included, as belonging to that individual]-- (a) the value of assets which on the valuation date are held-- 4*[(i) by the spouse of such individual to whom such assets have been transferred by the individual, direct-- ---------------------------------------------------------------------- 1 Subs. by Act 46 of 1964, s. 2, for "section 8" (w.e.f. 1-4-1965). 2 Sub. by s. 3, ibid., for "financial year" (w.e.f. 1-4-1965). 3 Subs. by s. 4, ibid., for "there shall be included, as belonging to him" (w.e.f. 1-4-1965). 4 Subs. by s. 4, ibid., for sub-clauses (i), (ii) and (iii) (w.e.f. 1-4-1965). 782 ly or indirectly, otherwise than for adequate consideration or in connection with an agreement to live apart, or (ii) by a minor child, not being a married daughter, of such individual, to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration, or (iii) by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the immediate or deferred benefit of the individual, his or her spouse or minor child (not being a married daughter) or both, or] (iv) by a person or association of persons to whom such assets have been transferred by the individual otherwise than under an irrevocable transfer, whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were transferred or otherwise: 1*[Provided that where the transfer of such assets or any part thereof is either chargeable to gift-tax under the Gift-taxt Act, 1958 (18 of 1958) or is not chargeable under section 5 of that Act, for any assessment year commencing 2*[after the 31st day of March, 1964, but before the 1st day of April, 1972], the value of such assets or part thereof, as the case may be, shall not be included in computing the net wealth of the individual;] (b) where the assessee is a partner in a firm or a 2*[member of an association of persons (not being a co-operative housing society)] the value of his interest in the firm or association determined in the prescribed manner. 3*[(1A) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or ---------------------------------------------------------------------- 1 Ins. by Act 46 of 1964, s. 4 (w.e.f. 1-4-1965). 2 Subs. by Act 32 of 1971, s. 31, for certain words (w.e.f. 1-4- 1972). 3 Ins. by s. 31, ibid. (w.e.f. 1-4-1972). 783 throwing it into the common stock of the family (such property being hereinafter referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computing the net wealth of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1972,-- (a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly; (b) the converted property or any part thereof, in so far as it is attributable to the interest of the individual in the property of the family, shall be deemed to be assets belonging to the individual and not to the family; (c) any part of the converted property in so far as it is attributable to the interest of the spouse or any minor child of the individual in the property of the family and where there is a partition (partial or total) amongst the members of the family, the converted property or any part thereof which is received by the spouse or minor child on such partition shall be deemed to be assets transferred indirectly by the individual to the spouse or minor child and the provisions of sub- section (1) shall, so far as may be, apply accordingly: Provided that the property referred to in clause (b) or clause (c) shall, on being included in the net wealth of the individual, be excluded from the net wealth of the family or, as the case may be, the spouse or minor child of the individual.] (2) In making any rules with reference to the valuation of the interest referred to in clause (b) of sub-section (1), the Board shall have regard to the law for the time being in force relating to the manner in which accounts are to be settled between partners of a firm and members of an association on the dissolution of a firm or association, as the case may be. (3) Where the value of any assets is to be included in the net wealth of an assessee in accordance with clause (a) of sub-section (1), there shall be deducted from such value any debts owing on the valuation date by the transferee mentioned in that sub-section in so far as such debts are referable to the assets. 784 (4) Nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to therein made by an individual before the 1st day of April, 1956, and the value of any assets so transferred shall not be included in the computation of his net wealth. (5) The value of any assets transferred under an irrevocable transfer shall be liable to be included in computing the net wealth of the transferor as and when the power to revoke arises to him. 1*[(6) For the purposes of this Act, the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate. 2*[(7) Where the assessee is a member of an association of persons, being a co-operative housing society, and a building or part thereof is allotted or leased to him under a house building scheme of the society, the assessee shall, notwithstanding anything contained in this Act or any other law for the time being in force, be deemed to be the owner of such building or part and the value of such building or part shall be included in computing the net wealth of the assessee; and, in determining the value of such building or part, the value of any outstanding instalments of the amount payable under such scheme by the assessee to the society towards the cost of such building or part and the land appurtenant thereto shall, whether the amount so payable is described as such or in any other manner in such scheme, be deducted as a debt owned by him in relation to such building or part.] Explanation.--For the purposes of this section,-- (a) the expression "transfer" includes any disposition, settlement, trust, covenant, agreement or arrangement, 3* (b) the expression "irrevocable transfer" includes a transfer of assets which, by the terms of the instrument effecting it, is not revocable for a period exceeding six years or during the life-time of the transferee, and under which the transferor derives no direct or indirect benefit, but does not include a transfer of assets if such instrument-- (i) contains any provision for the re-transfer, directly or indirectly, of the whole or any part of the assets or income therefrom to the transferor, or ---------------------------------------------------------------------- 1 Subs. by Act 46 of 1964, s. 4, for the Explanation (w.e.f. 1-4- 1965). 2 Ins. by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 3 The word "and" omitted by s. 31, ibid. (w.e.f. 1-4-1972). 785 (ii) in any way gives the transferor a right to reassume power, directly or indirectly, over the whole or any part of the assets or income therefrom.] 1*[(c) the expression "property" includes any interest in property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property; and (d) the expressions "interest of the individual in the property of the family" and "interest of the spouse or any minor child of the individual in the property of the family" mean, respectively, the proportion in which the individual or, as the case may be, the spouse or minor child would be entitled to share the property of the family if there had been a total partition in the family as on the valuation date of the family relevant to the assessment year for which the individual is to be assessed under sub-section (1A).]
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