Who Pays Wealth Tax?
Assessee means a person by whom the wealth tax or any other sum of money is payable under the provisions of the Act, and includes the legal representative, executor or administrator of a deceased person and a person deemed to be an agent of a non-resident.
Under the Act tax is charged on the following persons in respect of the wealth held by them during the assessment year:
- A company.
- A Hindu Undivided Family (HUF), which is a type of assessee recognised under the Act, consisting of all persons lineally descended from a common ancestor and deriving income from joint family corpus. Hindu, Jain, Buddhist, and Sikh families have been so recognised.
- An Association of Persons or a Body of Individuals.
- Non-corporative taxpayers whose account are to be stautorily audited.
Chargeability to tax also depends upon the residential status of the assessee. The Act provides that the residential status for the purpose of the Act shall be same as the residential status for the purpose of Income Tax Act. The chargeability also depends upon the Citizenship of a person. In order to be a citizen of India, a person must have domicile in the territories of India and must fulfil any of the following conditions:
- He must have been born in India;
- Either of his parents must have been born in India;
- Before the formation of Republic i.e. 26th January 1950, he has been ordinarily resident in India, for a period of 5 years. For ndividuals and Hindu Undivided Families, the date shall be 31st July.
A person ceases to be a citizen of India, if he voluntarily acquires the citizenship of a foreign nation. The incidence of tax has been explained here with the help of the following chart:
| Citizen of India | Non-citizen |
|
In this case all his assets and debts located in India are taxable, irrespective of whether he is a resident, a non-resident, or not ordinarily a resident. The value of all assets and debts located outside India are exempt here. |
CAclubindia
