Exemption from wealth tax - Post Office Saving Bank Rules - Income Tax - 613/CBDT

INSTRUCTION NO. 613/CBDT Dated : September 10, 1973 Section(s) Referred: 5(1)(1a) Statute: Wealth Tax Act, 1957 Under sub-section (1) read with sub-section (1A) of section 5 of the W.T.Act, assets referred to in clauses (xv), (xvi), (xxii), (xxiii), (xxiv),(xxv), (xxvi), (xxvii), (xviii) (xxix) not being deposits under the Post Office Savings Bank Rules, 1959 are exempt from wealth-tax upto an aggregate value of Rs.1.50 lakhs. Deposits under the Post Office Savings Bank Rules 1959 are not covered by this limit of Rs.1.5 lakhs. According to the proviso to sub-section (1A), the limit of Rs. 1.50 lakhs will be raised by such amount as the value of assets referred to in clause (xv) or clause (xvi) not being deposits under the Post Office Saving Bank Rules, 1959 which have been held by the assessee continuously from the date prior to the first day of March 1970 exceeds the limit of Rs.1.50 lakhs. 2. The Revenue Audit have pointed out instances which suggest that the scope of this proviso has not been clearly understood by some Wealth-tax Officers. Exemption Exceeding Rs.1.50 lakhs as specified in sub-section (1A) of section 5 of the W.T.Act could be given only if the value of the assets referred to in clause(xv) or (xxvi) not being deposits under the Post Office Saving Bank Rules included for exemption itself exceeds Rs.1.5 lakhs. This higher exemption is also limited to the extent the value of such assets namely, the assets referred to in clause (xv) or (xvi) not being deposits under the Post Office Saving Bank(Cumulative Time Deposits) Rules 1959 exceed Rs.1.50 lakhs. Exemption beyond Rs.1.50 lakhs would not be available if the value of such assets does not exceed Rs.1.50 lakhs.