Exemption in respect of house property u/s.5(1)(iv) of the Wealth Tax Act, 1957. - Income Tax - 1111/CBDT

INSTRUCTION NO. 1111/CBDT Dated : October 26, 1977 Section(s) Referred: 5(1)(iv) Statute: Wealth Tax Act, 1957 Attention is invited to Board's Instruction No.913 (F.NO.326/11/75-WT) dated 16th January, 1976 wherein it has been stated that exemption in respect of house property u/s.5(1)(iv) of the W.T. Act, 1957 is not allowable in respect of interest of a beneficiary of a trust being a life tenant in the house property. 2. The Board have reconsidered the matter and have been advised that if a beneficiary has an absolute right of user of the property during his life-time, it could be said that the property belongs to him. Such interest being an asset within the meaning of the Act, provided, of course, other conditions laid down thereunder are satisfied. It is however, necessary to look into terms of the trust deed or the settlement deed so as to ascertain whether the beneficiary has an absolute right of user vis-a-vis the trustees. If the beneficiary has no such absolute right and the trustees are empowered to permit any beneficiary to stay in the house according to their discretion, exemption u/s.5(1)(iv) would not be available.