As 21 states of the country plunged into darkness in July end, the world watched. It highlighted the abysmal power infrastructure in India. Luckily, the largest power outrage in history caught the attention of our tax authorities as well and they extended the deadline for filing I-T returns for FY12 by a month to August 31. This happened just a few hours before the expiry of the original deadline of July 31. It was an important step, given that electronic filing of returns is mandatory if an individual has total income above R10 lakh for FY12.
However, there has been no specific clarification on the extension of deadline for wealth-tax returns. But, the Wealth-Tax Act, 1957, links the deadline for filing the wealth-tax returns to that of the income-tax returns. The Act provides that the due date of filing wealth-tax returns shall be same date as that applicable to an individual under the Income-Tax Act, 1961. Thus, it can be safely assumed that the wealth-tax returns filing deadline has also been extended for individuals until August 31.
India is a growing country and filing of wealth-tax returns is an essential part of a tax work of a rising number of Indians. Valuation of wealth of an individual as on March 31, 2012, needs to be done. If the net wealth exceeds R30 lakh, then wealth tax at 1% of the amount by which it exceeds R30 lakh has to be paid. The net wealth is arrived at by reducing from the gross wealth the debts incurred in relation to acquiring the wealth. The Form BA is used to file a wealth-tax return. When the wealth-tax returns are furnished after the due date, or are not furnished at all, one is liable to pay simple interest at the rate of 1% for every month or part of a month comprised in the period from the date immediately following the due date till the date the returns are furnished or the assessment ends.
One house property owned by an individual is exempt from wealth tax. However, additional property not let out for 300 days or more is subject to wealth tax. Jewellery, motor cars, urban land, yachts, boats and planes (non-commercial), and cash in hand above R50,000 are also subject to wealth tax.
The global wealth of Indian citizen who qualifies as a Resident and Ordinary Resident in India is subject to wealth tax. However, an individual who qualify as Resident but Not Ordinary Resident or a Non-Resident in India, is subject to wealth tax only on wealth in India.
Those individuals who have not filed their wealth-tax returns yet should use this opportunity to do so by August 31.
The writer is senior tax professional, Ernst & Young. Views expressed are personal