Deposit under "Own Your Telephone" Scheme-Taxability under Wealth-tax Act, 1957-Clarification regarding - Income Tax - 222/1977

Deposit under "Own Your Telephone" Scheme-Taxability under Wealth-tax Act, 1957-Clarification regarding Circular No. 222 Dated 10/6/1977 Sir, Subject: Deposit under "Own Your Telephone" Scheme-Taxability under Wealth-tax Act, 1957-Clarification regarding. The Board have examined the question whether the deposit made under "Own Your Telephone" Scheme is an asset within the meaning of section 2(c) of the Wealth-tax Act, 1957, and, as such, includible in the net wealth of an assessee. 2. The payment made under "Own Your Telephone" Scheme is in the nature of advance payment of rent of a telephone connection and not in the nature of deposit. The proportionate amount is adjusted in the rental bills issued from time to time. The amount which has not been adjusted up to the relevant valuation dates is, therefore, a debt due to the assessee and has normally to be considered as an asset for the purpose of wealth-tax assessment. With a view to simplifying matters and removing practical difficulties involved in keeping tract of the diminishing amount year after year, and also to bring the matter in line with Instruction No. 943 dated the 2nd April, 1976, issued from file No. 204/15/76-IT(AII) (providing for the allowance of entire amount of payment under the "Own Your Telephone" Scheme for income-tax purposes in the year of payment irrespective of the fact whether the telephone had been installed or not), it is hereby advised that the deposit under the "Own Your Telephone" Scheme should not be added to the total wealth unless the same has been shown as asset by the assessee himself in his accounts or in the balance-sheet. (Sd.) D. B. Ahuja, Directior, Central Board of Direct Taxes,