Wealth-tax assessments Section 5(1)(iva) of Wealth Tax Act, 1957. - Income Tax - 1266/CBDT

INSTRUCTION NO. 1266/CBDT Dated : June 27, 1979 Section(s) Referred: 5(1A) ,5(1)(iva) Statute: Wealth Tax Act, 1957 The Board has noticed that in a large number of cases of wealth-tax assessments Section 5(1)(iva) as it existed prior to 1.4.1975, and Section 5(1A) as amended by the Finance Act, 1974 with effect from 1.4.1975 regarding restriction of aggregate exemption of Rs.1,50,000 have not been correctly applied. In the law as it existed prior to 1.4.1975 agricultural land belonging to a tax payer is exempt from Wealth-tax upto a value of Rs.1,50,000. However in a case where the tax payer owns a house situate in a place with a population exceeding 10,000 the limit of exemption for agricultural land is reduced by an amount equal to the difference between Rs.1,50,000 and the value of the house property which is exempted from Wealth-tax. Under the Finance Act, 1974 separate exemption in respect of agricultural land has been withdrawn and linked the exemption in respect of specified financial assets as mentioned in sub-section (1A) of Section 5 of the Wealth-tax Act. Under the amended provision, deduction upto Rs.1,50,000 in the aggregate in respect of any one or more of the specified financial assets and agricultural land can only be allowed.