Wealth tax - exemption of residential house property - Income Tax - 568/CBDT

INSTRUCTION NO. 568/CBDT Dated : July 9, 1973 Section(s) Referred: 5(1)(iv) Statute: Wealth Tax Act, 1957 Under clause (iv) of Sub-section(1) of Section (1) of section 5 of the W.T.Act one house or part of a house belonging to the assessee is exempt from Wealth-tax upto a limit of Rs.1 lakh. Under this clause, it stood prior to the amendment made by Finance (No.2) Act, 1971 w.e.f. 1-4-72, the exemption was available only if the house or part of the house was exclusively used by the assessee for residential purposes. The expression exclusively used by the assessee for residential purposes was dropped by the Finance(No.2) Act, w.e.f.1-4-72. A question has, therefore, arisen as to the meaning of the term 'house' occurring in section 5(i)(iv) after 1-4-72. The Board are advised that the term house in section 5(1)(iv) would refer not only to buildings used for residential purposes but for other purposes as well and the exemption u/s.5(1)(iv) would be available even if the buildings are left out for commercial purposes. This may be brought to the notice of all the officers working in your charge.