Net wealth to include certain assets.
4. (1) 62[In computing the net wealth—
(a) of an individual, there shall be included, as
belonging to that individual, the value of assets which on the valuation date
are held—]
63[(i) by the spouse of such individual to whom such
assets have been transferred by the individual, directly or indirectly,
otherwise than for adequate consideration or in connection with an agreement to
live apart, or
(ii) by a minor child, not being 64[a
minor child suffering from any disability of the nature specified in section
80U of the Income-tax Act or] a married daughter, of such individual, 65[***]
or
(iii) by a person or association of persons to whom
such assets have been transferred by the individual 66[directly
or indirectly] otherwise than for adequate consideration for the immediate or
deferred benefit of the individual, his or her spouse 67[***],
or]
(iv) by a person or association of persons to whom such
assets have been transferred by the individual otherwise than under an
irrevocable transfer, 68[or]
68[(v) by the son’s wife, 69[***]
of such individual, to whom such assets
have been transferred by the individual, directly or indirectly, on or after
the 1st day of June, 1973, otherwise than for adequate consideration,] 70[or]
70[(vi) by a person or association of persons to whom
such assets have been transferred by the individual, directly or indirectly, on
or after the 1st day of June, 1973, otherwise than for adequate consideration
for the immediate or deferred benefit of the son’s wife, 71[***]
of such individual or both,]
whether the assets referred to in any of the sub-clauses
aforesaid are held in the form in which they were transferred or otherwise :
72[Provided that
where the transfer of such assets or any part thereof is either chargeable to
gift-tax under the Gift-tax Act, 1958 (18 of 1958), or is not chargeable under
section 5 of that Act, for any assessment year commencing after the 31st day of
March, 1964, 73[but
before the 1st day of April, 1972,] the
value of such assets or part thereof, as the case may be, shall not be included
in computing the net wealth of the individual :]
74[Provided further that nothing contained in sub-clause (ii) shall
apply in respect of such assets as have been acquired by the minor child out of
his income referred to in the proviso to sub-section (1A) of section 64 of the
Income-tax Act and which are held by
him on the valuation date :
Provided
also that where the assets held by a minor
child are to be included in computing the net wealth of an individual, such
assets shall be included,—
(a) where the marriage of his parents subsists,
in the net wealth of that parent whose net wealth (excluding the assets of the
minor child so includible under this
sub-section) is greater ; or
(b) where the marriage of his parents does not
subsist, in the net wealth of that parent who maintains the minor child in the
previous year as defined in section 3
of the Income-tax Act,
and where any such assets are once included in the net wealth of either
parent, any such assets shall not be included in the net wealth of the other
parent in any succeeding year unless the Assessing Officer is satisfied, after
giving that parent an opportunity of being heard, that it is necessary so to
do ;]
75[(b) of an
assessee who is a partner in a firm or a member of an association of persons
(not being a co-operative housing society), there shall be included, as
belonging to that assessee, the value of his 76[interest in the assets of the firm] or association
determined in the manner laid down in Schedule III :
77[Provided that
where a minor is admitted to the benefits of partnership in a firm, the value
of the interest of such minor in the firm, determined in the manner specified
above, shall be included in the net wealth of the parent of the minor, so far
as may be, in accordance with the
provisions of the third proviso to clause (a).]
78[(1A) Where, in the case of an
individual being a member of a Hindu undivided family, any property having been
the separate property of the individual has, at any time after the 31st day of
December, 1969, been converted by the individual into property belonging to the family through the act of
impressing such separate property with the character of property belonging to
the family or throwing it 79[into the common stock of the family or been
transferred by the individual, directly or indirectly, to the family otherwise
than for adequate consideration (the property so converted or transferred
being hereinafter referred to as the converted property)], then,
notwithstanding anything contained in any other provision of this Act or in
any other law for the time being in force, for the purpose of computing the net
wealth of the individual under this Act for any assessment year commencing on
or after the 1st day of April, 1972,—
(a) the
individual shall be deemed to have transferred the converted property, through
the family, to the members of the family for being held by them jointly ;
(b) the
converted property or any part thereof 80[***] shall be deemed to be assets belonging to the
individual and not to the family ;
81[(c) where
the converted property has been the subject-matter of a partition (whether
partial or total) amongst the members of the family, the converted property or
any part thereof which is received by the spouse 82[***] of the individual on such partition shall be deemed
to be assets transferred indirectly by the individual to the spouse 82[***] and the provisions of sub-section (1) shall, so far
as may be, apply accordingly :]
Provided that the
property referred to in clause (b) or clause (c) shall, on being
included in the net wealth of the individual, be excluded from the net wealth
of the family or, as the case may be, the spouse 82[***] of the individual.]
83(2) [Omitted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f.
1-4-1989.]
84(3) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]
(4) Nothing contained in clause (a) of
sub-section (1) shall apply to any such transfer as is referred to therein made
by an individual before the 1st day of April, 1956, and the value of any assets
so transferred shall not be included in
the computation of his net wealth.
85[(4A) Notwithstanding anything in sub-section (4), nothing contained in
clause (a) of sub-section (1) shall apply to any such transfer as is
referred to therein made before the 1st day of April, 1963, by an individual
who but for the extension of this Act to the Union territories of Dadra and
Nagar Haveli, Goa, Daman and Diu, and Pondicherry, would not have been an assessee, and the value of any assets so
transferred shall not be included in the computation of his net wealth.]
(5) The value of any assets transferred under
an irrevocable transfer shall be liable
to be included in computing the net wealth of the transferor as and when the
power to revoke arises to him.
86[(5A) Where a gift of money from one person to another is made by means
of entries in the books of account maintained by the person making the gift or
by an individual or a Hindu undivided family or a firm or an association of
persons or body of individuals with whom or which he has business or other
relationship, the value of such gift shall be liable to be included in computing
the net wealth of the person making the gift unless he proves to the
satisfaction of the 87[Assessing Officer] that the money has
actually been delivered to the other person at the time the entries were made.]
88[(6) For the purposes of this Act, the holder of an impartible estate
shall be deemed to be the individual owner of all the properties comprised in
the estate.]
89[(7) Where the assessee is a member of a co-operative society, company
or other association of persons and a
building or part thereof is allotted or leased to him under a house building
scheme of the society, company or association, as the case may be, the assessee
shall, notwithstanding anything contained in this Act or any other law for the
time being in force, be deemed to be the owner of such building or part and the
value of such building or part, shall be included in computing the net wealth
of the assessee; and, in determining the value of such building or part, the
value of any outstanding instalments of the amount payable under such scheme by
the assessee to the society, company or association towards the cost of such
building or part and the land appurtenant thereto shall, whether the amount so
payable is described as such or in any other manner in such scheme, be deducted
as a debt owed by him in relation to such
building or part.
(8) A person—
(a) who
is allowed to take or retain possession of any building or part thereof in part
performance of a contract of the nature
referred to in section 53A90 of the Transfer of Property Act, 1882 (4 of 1882) ;
(b) who
acquires any rights (excluding any rights by way of a lease from month to month
or for a period not exceeding one year) in or with respect to any building or
part thereof by virtue of any such transaction as is referred to in clause (f)
of section 269UA of the Income-tax Act, 1961 (43 of 1961),
shall be deemed
to be the owner of that building or part thereof and the value of such building
or part shall be included in computing the net wealth of such person.]
Explanation.—For the purposes of this section,—
(a) the
expression “transfer” includes any disposition, settlement, trust, covenant,
agreement or arrangement ; 91[***]
92[(aa) the expression
“child” includes a step-child and an adopted child;]
92[(b) the
expression “irrevocable transfer” includes a transfer of assets which, by the
terms of the instrument effecting it, is not revocable for a period exceeding
six years or during the lifetime of the transferee, and under which the transferor
derives no direct or indirect benefit, but does not include a transfer of
assets if such instrument—
(i) contains any provision for the retransfer,
directly or indirectly, of the whole or any part of the assets or income
therefrom to the transferor, or
(ii) in any way gives the transferor a right
to reassume power, directly or
indirectly, over the whole or any part of the assets or income therefrom] ; 93[and]
94[(c) the
expression “property” includes any interest in any property, movable or
immovable, the proceeds of sale thereof and any money or investment for the
time being representing the proceeds of sale thereof and where the property is
converted into any other property by any method, such other property 95[***].]
95[***]