Net Wealth (Debts allowed as deduction)

Amit Ingale (Student CA Final) (1454 Points)

06 April 2010  
Section 2(m) of WEALTH TAX ACT 1957 :-
             net wealth means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee [on the valuation date which have been incurred in relation to the said assets ;
 
What shall be the NET WEALTH ???????
 
Situation 1 )
                 Builing (Schdule III value)                        Rs 80,00,000
                 Motor Car (Schdule III value)                 Rs 20,00,000
                 Jwellary (Schdule III value)                     Rs 30,00,000
                                GROSS WEALTH                 Rs 1,10,00,000
 
Debt                   
       Builing (Schdule III value)         Rs 1,00,00,000 ( Secured Building)
       Motor Car (Schdule III value)   Rs    10,00,000 ( Secured on Motor Car)
       Jwellary (Schdule III value)        Rs      8,00,000 ( Secured on Jwellary Only)
                       TOTAL DEBT          Rs 1,18,00,000
 
 NET WEALTH U/S 2(m)
 a)    Rs 12,00,000  (Rs110-98); Debts allowed as Rs 98,00,000 ( 80+10+8  lakhs )
 b)    NIL               (Rs 110-Rs118 But Restricted to Rs 1,10,00,000)
 c)    OR Else ???     
                            

Regards

Amit Ingale. (ingale_amit @ yahoo.co.in)