Wealth-tax exemption available for units under the Wealth-tax Act, 1957, and the Unit Trust of India Act, 1963--Clarification regarding - Income Tax - 323/1982

Wealth-tax exemption available for units under the Wealth-tax Act, 1957, and the Unit Trust of India Act, 1963--Clarification regarding Circular No. 323 Dated 22/1/1982 To All Commissioners of Wealth-tax. Sir, Subject: Wealth-tax exemption available for units under the Wealth-tax Act, 1957, and the Unit Trust of India Act, 1963--Clarification regarding. A doubt has been raised in certain quarters as to the extent to which Units of the Unit Trust of India are exempt for the purpose of Wealth-tax assessment. 2. The exemption under clause (xxv) of sub-section (1) of section 5 of the Wealth-tax Act, 1957, is available subject to the limit of Rs. 1,50,000 laid down under sub-section (1A) of section 5 for the listed investments and also subject to the condition that the asset should have been owned by the assessee for a period of at least six months ending with the relevant valuation date as laid down in clause (b) of sub-section (3) of section 5. 3. The Unit Trust of India Act, 1963, as amended by the Trust Laws (Amendment) Act, 1975, and the Unit Trust of India (Amendment) Act, 1976, provides in clause (ba) of sub-section (1) of section 32 that notwithstandintg anything contained in the Wealth-tax Act, 1957, wealth-tax will not be payable by an assessee, being an individual or a Hindu undivided family who is resident in India, in respect of, and there shall not be included in the net wealth of the assessee, Units of the value not exceeding twentyfive thousand rupees. Thus, the exemption under the aforesaid provision is not subject to the limitation and restriction provided under section 5(1A) or section 5(3)(b) of the Wealth-tax Act, 1957. 4. In view of the position stated above, it is clarified that the exemption under section 32(1)(ba) of the Unit Trust of India Act, 1963, will be over and above and independent of the exemption provided under section 5(1)(xxv) read with sections 5(1A) and 5(3)(b) of the Wealth-tax Act, 1957. 5. The above may kindly be brought to the notice of all the officers working in your charge. Yours faithfully, (Sd.) R.N. Dave, Officer on Special Duty, Central Board of Direct Taxes.