Wealth tax liability

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

07 March 2012 ABC ltd. has a industrail property and letout the same to a call center now such industrial property is liable for wealth tax in hand of company or not ??????????

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
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07 March 2012 Industrial land is exempt from wealth tax for first two years only.

Industrial property is taxable in the hands of ABC Ltd as it was not used for the purpose of business but let out.

Sec 2(ea)(i) Any building or land appurtenant thereto (hereinafter referred to as “house”), whether used for residential or commercial purposes or for the purpose of maintaining a guest
house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corporation or by any other name) or a cantonment Board, but does not include:
(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole time employment, having a gross annual salary of less than Rs.5,00,000.
(2) any house for residential or commercial purposes which forms part of stock-in-trade.
(3) any house which the assessee may occupy for the purpose of any business or profession carried on by him.
(4) any residential property that has been let out for a minimum period of 300 days in the previous year.

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2012 dear sir there is also a clause which exclude the property from the definition of building and that is "any property in the nature of commercial establishments or complexces".

since it is in the nature of commercial establishment and hence it is not taxable in the hand of ABC ltd.
however commercial establishment has not been defined in wealth tax act

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