Rule 1BB - Valuation of house - Wealth Tax Rules, 1957

Valuation of house. 1 1BB. [Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.] ----------------------- Notes:- 1. Before omission rule 1BB, as amended by the Wealth-tax (Amendment) Rules, 1979, w.e.f. 1-4-1979, read as under: (1) For the purposes of sub-section (1) of section 7, the value of a house which is wholly or mainly used for residential purposes shall be the aggregate of the following amounts, namely : ( a ) the amount arrived at by multiplying the net maintainable rent in respect of the part of the house used for residential purposes by the fraction 100/8; and ( b ) the amount arrived at by multiplying the net maintainable rent in respect of the remaining part of the house, if any, by the fraction 100/9 : Provided that in relation to a house which is built on leasehold land, this sub-rule shall have effect as if for the fraction 100/8 in clause (a) or, as the case may be, the fraction 100/9 in clause (b), the fractions 100/9 and 100/10, respectively, had been substituted. Explanation . - For the purpose of this sub-rule, a house shall be deemed to be mainly used for residential purposes, if the built-up floor area thereof used for residential purposes is not less than sixty-six and two-third per cent of its total built-up floor area (2) For the purpose of this rule, - (a) gross maintainable rent , in relation to a house, means - (i) the sum for which the house might reasonably be expected to let from year to year; or (ii) where the house is let and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in sub-clause (i), the amount so received or receivable : Provided that where the house is in the occupation of a tenant and the taxes levied by any local authority or any expenditure on repairs in respect of the house is borne wholly or partly by the tenant, the sum referred to in sub-clause (i) or, as the case may be, the annual rent referred to in sub-clause (ii) shall be increased by the amount of the taxes or, as the case may be, the expenditure on repairs so borne by the tenant. Explanation . - For the purposes of this clause, annual rent means - (a) in a case where the property is let throughout the previous year, the actual rent received or receivable by the owner in respect of such year; and (b) in nay other case, the amount which bears the same proportion to the amount of the actual rent received or receivable by the owner for the period for which the property is let, as the period of twelve months bears to such period ; (b) house includes an independent residential unit ; (c) net maintainable rent , in relation to a house, means the amount of the gross maintainable rent as reduced by - (i) the amount of taxes levied in the previous year by any local authority in respect of the house; (ii) a sum equal to one-sixth of the amount by which the gross maintainable rent exceeds the amount referred to in sub-clause (i), in respect of the repairs of the house; (iii) any sums spent during the previous year to collect the rent from the house, not exceeding six per cent of the amount by which the gross maintainable rent exceeds the amount referred to in sub-clause (i) ; (iv) the amount of any premium paid during the previous year to insure the house against any risk of damage or destruction ; (v) the amount of ground rent payable during the previous year, where the property is subject to ground rent; and (vi) any sum paid in the previous year on account of land revenue or any other tax levied in the previous year by the State Government in respect of the house ; (d) previous year means the period which would be the previous year if an assessment of the income from the house were to be made under the Income-tax Act, 1961 (43 of 1961) for the assessment year. (3) Where the unbuilt area of the plot of land on which the house is built exceeds the specified area, the value of the house arrived at in accordance with the provisions of sub-rule (1) shall be increased by an amount calculated as hereunder, namely :- (i) where the difference between the unbuilt area and the specified area exceeds 5 per cent but does not exceed 10 per cent of the aggregate area by an amount equal to 20 per cent of such value; (ii) where the difference between the unbuilt area and the specified area exceeds 10 per cent but does not exceed 15 per cent of the aggregate area by an amount equal to 30 per cent of such value; (iii) where the difference between the unbuilt area and the specified area exceeds 15 per cent but does not exceed 20 per cent of the aggregate area by an amount equal to 40 per cent of such value. Explanation . - For the purposes of this sub-rule, - (i) aggregate area in relation to the plot of land on which the house is built, means the aggregate of the area on which the house is built and the unbuilt area ; (ii) specified area in relation to the plot of land on which the house is built means, - (a) where the house is situated at Bombay, Calcutta, Delhi or Madras, sixty per cent of the aggregate area ; (b) where the house is situated at Agra, Ahmedabad, Allahabad, Amritsar, Bangalore, Bhopal, Cochin, Hyderabad, Indore, Jabalpur, Jamshedpur, Kanpur, Lucknow, Ludhiana, Madurai, Nagpur, Patna, Pune, Salem, Sholapur, Srinagar, Surat, Tiruchirapalli, Trivandrum, Vadodara (Baroda) or Varanasi (Banaras), sixty-five per cent of the aggregate area; and ( c ) where the house is situate at any other place, seventy per cent of the aggregate area : Provided that where under any law for the time being in force, the minimum area of the plot of land required to be kept as open space for the enjoyment of the house exceeds the specified area; such minimum area shall be deemed to be the specified area; ( iii ) unbuilt area , in relation to the aggregate area of the plot of land on which the house is built, means that part of such aggregate area on which no building has been erected. (4) Where the house is built on land obtained on lease from the Government, a local authority or any authority referred to in clause ( 20A ) of section 10 of the Income-tax Act, 1961 (43 of 1961) and the Government or any such authority is, under the terms of the lease, entitled to claim and recover a specified part of the unearned increase in the value of the land at the time of the transfer of the house, the value of such house as determined under the foregoing provisions of this rule shall be reduced by the amount so liable to be claimed and recovered or by an amount equal to fifty per cent of the value of the house as so determined, whichever is less, as if the house had been transferred on the valuation date. Explanation . For the purposes of this sub-rule, unearned increase means the difference between the value of such land on the valuation date as determined by the Government or such authority for the purpose of calculating such increase and the amount of the premium paid or payable to the Government or such authority for the lease of the land. (5) Nothing contained in this rule shall apply, ( i ) where, having regard to the facts and circumstances of the case, the Wealth-tax Officer, with the previous approval of the Inspecting Assistant Commissioner, is of opinion that it is not practicable to apply the provision of this rule to such a case; or ( ii ) where the difference between the unbuilt area and the specified area exceeds twenty per cent of the aggregate area; or ( iii ) where the house is built on leasehold land and the lease expires within a period not exceeding fifteen years from the relevant valuation date and the deed of lease does not give an option to the lessee for the renewal of the lease : Provided that in a case referred to in clause ( i ) or clause ( ii ) or clause ( iii ), the valuation of the house shall be made by the Wealth-tax Officer with the prior approval of the Inspecting Assistant Commissioner.