PRELIMINARYCentral

Section 2 of THE WEALTH-TAX ACT, 1957

Definitions.

In this Act, unless the context otherwise requires,2*

3[(b) “Appellate Tribunal” means the Appellate Tribunal constituted under section 252 of the Income-tax Act;

(c)“assessee” means a person by whom wealth-tax or any other sum of money is payable under this Act, and includes—
1. (i)every person in respect of whom any proceeding under this Act has been taken for the determination of wealth-tax payable by him or by any other person or the amount of refund due to him or such other person;
2. (ii)every person who is deemed to be an assessee under this Act;
3. (iii)every person who is deemed to be an assessee in default under this Act; 4[(ca) “Assessing Officer” means the Deputy Commissioner of Income-tax or the Assistant Commissioner or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Income-tax Act which apply for the purposes of wealth-tax under section 8 of this Act and also the ⁵[Additional Commissioner or] ⁶[Additional Director or] Joint Commissioner who is directed under clause (b) of sub-section (4) of the said section 120 to exercise or perform all or any of the powers and functions conferred on or assigned to the Assessing Officer under that Act;] 7[(cb)] “assessment” includes reassessment; (d) “assessment year” means a period of twelve months commencing on the 1st day of April, every year;]  Subject to verification and confirmation by the Department. 1. This Act has been extended with modifications to Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry by Regulation 3 of 1963, s. 3(1) and Schedule (w.e.f. 1-4-1963). 2. Clause (a) omitted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988). Earlier clause (a) amended by Act 26 of 1988, s. 88 (w.e.f. 1-4-1988)

↩3.Subs. by Act 46 of 1964, s. 2, for clauses (b), (c) and (d) (w.e.f. 1-4-1965).

↩4.Subs. by Act 21 of 1998, s. 67, for clause (ca) (w.e.f. 1-10-1998). Earlier clause (ca) was inserted by Act 4 of 1988, s. 128 (w.e.f. 1-4-1988) and amended by Act 26 of 1988, s. 88 (w.e.f. 1-4-1988).

↩5.Ins. by Act 22 of 2007, s. 83 (w.r.e.f. 1-6-1994).

↩6.Ins. by s. 83, ibid. (w.r.e.f. 1-10-1996).

Summary

The definitions section provides specific legal meanings for terms like assessee, which includes anyone liable to pay wealth tax or undergoing proceedings to determine their tax.
It defines net wealth as the total value of a person's taxable assets minus any debts they owe that were incurred in relation to those specific assets.
It lists specific items that count as assets, such as land, buildings, jewellery, and motor cars, while excluding items like cars used as stock in a business.
It defines the valuation date as the last day of the previous year under the Income-tax Act.

Practical examples

1Anita owns three personal motor cars, which count as assets, but the ten cars she keeps in her dealership as stock-in-trade are specifically excluded from being counted as assets under the definitions.

2Ravi calculates his net wealth by adding up the value of his urban land and jewellery, and then subtracting the bank loan he took out specifically to purchase that urban land.

FAQ

1. What exactly does net wealth mean?

It is the aggregate value of all your taxable assets minus the aggregate value of the debts you owe in relation to those assets.

2. Are all houses considered assets for this tax?

No, houses meant exclusively for residential purposes allotted by a company to an employee earning less than ten lakh rupees, or houses forming part of stock-in-trade, are excluded.

3. Who is considered an assessee?

An assessee is any person who must pay wealth tax or any other money under this law, or someone who is undergoing proceedings to figure out their tax.

Test yourself

1.Under Section 2 of THE WEALTH-TAX ACT, 1957, how is net wealth calculated?

2.Section 2 of THE WEALTH-TAX ACT, 1957 cross-references Section 8 regarding the Assessing Officer. How do these sections work together to define the officer's role?

3.According to Section 2 of THE WEALTH-TAX ACT, 1957, which of the following is specifically excluded from the definition of assets for a person?

4.Under Section 2 of THE WEALTH-TAX ACT, 1957, what is the meaning of valuation date for an assessee under the Income-tax Act?

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