WEALTH-TAX RULES, 1957
(1) These rules may be called the Wealth-tax Rules, 1957. (2) They shall he deemed to have come into force on the 1st day of April, 1957.
In these rules, unless the context otherwise requires,--
(a) 'Act' means the Wealth-tax Act, 1957 (27 of 1957);
(b) "accounting year", in relation to a company, means a period in respect of which any profit and loss account of the company laid before it in annual general meeting is made up;
(ba) "authorised bank" means any bank as may be appointed by the Reserve Bank of India as its agent under the provisions of sub-section (1) of section 45 of the Reserve Bank of India Act, 1934 (2 of 1934);
(c) "equity share" means any share in the share capital of a company other than a preference share;
(d) "Form" means a form appended to these rules;
(e) "gold" means gold,
For the purposes of clause (xxxiv) of sub-section (1) of section 5,--
(i) The Chief Controller of Imports and Exports, Ministry of Commerce, Government of India, shall be the "prescribed authority" for specifying the percentage of total production to be exported by a company for the purposes of the said clause and for certifying that the company has undertaken the export of such percentage of its total production as has been so specified;
(ii) the Controller of Capital Issues, Department of Economic Affairs, Ministry of Finance, Government of India, shall be the "prescribed authority" for certifying that an issue of equity share capital has been made by a company after the 31st day of March, 1976, for the purposes of expansion or diversification of its industrial undertaking.
3 Inserted by the Wealth-tax (Third Amendment) Rules, 1977.
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax. (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
The Wealth-Tax Rules, 1957, were framed under the Wealth-Tax Act, 1957, to provide mechanisms for valuation of assets for wealth tax purposes. Rule 1D specifically deals with the valuation of unquoted equity shares using the break-up method, which calculates value based on the company's balance sheet after adjustments. This rule was introduced to standardize valuation and prevent tax avoidance, and it has been subject to judicial scrutiny regarding its mandatory nature and applicability.
Rule 1D of the Wealth-Tax Rules, 1957, prescribes that the market value of unquoted equity shares (other than investment companies) shall be determined by the break-up method: 95% of the value of assets minus liabilities as per the balance sheet, divided by the number of shares. For investment companies, it is 100% of such value. Adjustments include excluding certain liabilities like provisions for taxation and unclaimed dividends.
Rule 1D applies to the valuation of unquoted equity shares for wealth tax purposes, ensuring a uniform break-up method. It extends by analogy to related tax contexts (e.g., gift tax, estate duty) where no specific valuation rules exist. It is mandatory and prevails over general market value estimation under Section 7(1) of the Wealth-Tax Act, 1957, but does not apply to quoted shares or post-1989 assessments following rule amendments.
Not applicable. Rule 1D is a procedural valuation rule under the Wealth-Tax Rules, 1957, and does not prescribe punishments. Violations of wealth tax provisions may attract penalties under Sections 18-18B of the Wealth-Tax Act, 1957, but no direct punishment is linked to this rule.
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989 w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989]
[Omitted by the Wealth-tax (Second Amendment) Rules, 1989, w.e.f. 1-4-1989.]
4(1) The return of net wealth referred to in section 14 shall--
(A) in respect of assessment year 1992-93 and earlier assessment years--
(a) in the case of individuals and Hindu undivided families, be in Form A;
(b) in the case of companies, be in Form B;
and shall be verified in the manner specified therein;
(B) in the case of individuals, Hindu undivided families and companies, in respect of assessment year 1993-94 and any other subsequent assessment year, be in Form BA and shall be verified in the manner specified therein.
(2) Where the assessee is carrying on a business, a copy of the balance sheet or trial balance as on the valuation date or on the date of
Regional Valuation Officers shall exercise, within such areas as the Board may direct, general supervision over the work of District Valuation Officers, Valuation Officers and Assistant Valuation Officers.
(2) District Valuation Officers, Valuation Officers and Assistant Valuation Officers shall perform the functions of a Valuation Officer in respect of such areas and in relation to such classes of assets as the Board may direct.
(3) Where under any directions issued under sub-rule (2), the functions of a Valuation Officer in relation to any class of assets, being buildings or lands or any rights in buildings or lands, in respect of any area have been assigned to a District Valuation Officer, Valuation Officer and an Assistant Valuation Officer, such functions shall be performed by the District Valuation Officer, the Valuation Officer or
The percentage of the value of the asset as returned and the amount referred to in sub-clause (i) of clause (b) of sub-section (1) of section 16A shall, respectively, be 33 1/3 per cent and Rs. 50,000.
The Valuation Officer or any overseer, surveyor or assessor authorised by him by order in writing in this behalf may enter any land referred to in clause (a), or any land, building or other place referred to in clause (b), of subsection (1) of section 38A, or inspect any asset referred to in clause (c), of that subsection, on any day, excluding Sundays and holidays under the Negotiable Instruments Act, 1881 (26 of 1881) at any time between 6 a.m. and 6 p.m.
Every notice of demand under section 30 shall be in Form C ; Provided that a notice of demand relating to payment of wealth-tax provisionally assessed under section 15C shall be in Form D.
(1) An application for settlement of a case under sub-section (1) of section 22C shall be made in quintuplicate in Form DA and shall be verified in the manner indicated therein.
(2) The application referred to in sub-rule (1), the verification appended thereto, the Annexure to the said application and the statements and documents accompanying the Annexure shall be signed by the person specified in section 15A.
(3) Every application in connection with the settlement of a case shall be accompanied by a fee of five hundred rupees.
23[(4) The assessee shall, on the date on which he makes the application to the Settlement Commission, intimate in Form DAA to the Assessing Officer of having made such application to the Commission.]
22. Substituted by the W
24[(1) The Settlement Commission shall, while calling for a report from the Commissioner under sub-section (2B) of section 22D, forward a copy of the application in Form DA (other than the Annexure and the statements and other documents accompanying such Annexure) along with a copy of the order under sub-section (1) of section 22D or, as the case may be, an intimation in respect of an application deemed to have been allowed to be proceeded with under sub-section (2A) of section 22D.
(2) Where an application has not been declared invalid under sub-section (2C) of section 22D or an application has been allowed to be further proceeded with under sub-section (2D) of section 22D, the information contained in the Annexure to the application in Form DA and in the statements and other documents accompanying such Annexure shall be sent to the Commissioner.
&
(1) The following scale of fees shall be levied by the Settlement Commission for furnishing under section 22G a copy of any report or part of any report made by any wealth-tax authority to the Settlement Commission :--
For the first two hundred words or less 80 paise;
For every additional hundred words or fraction thereof 40 paise.
(2) The fee referred to in sub-rule (1) shall be recovered in advance in cash.
(1) The declaration referred to in sub-section (1) of section 18C shall be in Form DB and shall be verified in the manner indicated therein.
(2) The declaration and the verification referred to in sub-rule (1) shall be signed by the person specified in section 15A.
(3) The declaration referred to in sub-rule (1) shall,--
(a) in a case where it is furnished to the Deputy Commissioner (Appeals) or the Commissioner (Appeals), be in duplicate, and
(b) in a case where it is furnished to the Appellate Tribunal, be in triplicate.
9(1) An appeal under section 23A to the Commissioner (Appeals) shall be in Form E and shall be verified in the manner provided therein.
(2) In any appeal preferred in Form E, the memorandum of appeal, the grounds of appeal and the verification shall be signed by the person who is authorised to sign the return of net wealth as provided in section 15A of the Wealth-tax Act, 1957.
7 Words "Deputy Commissioner (Appeals)" omitted by the Wealth-tax (First Amendment) Rules, 1998, w.e.f. 22-10-1998.
8 Word "and" omitted by the Wealth-tax (First Amendment) Rules, 1998, w.e.f. 22-10-1998.
9 Substituted by the Wealth-tax (First Amendment) Rules, 1998, w.e.f. 22-10-1998. Prior to its substitution, sub-rule (1), read as under :
&
(1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals), or, as the case may be, the Commissioner (Appeals) any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :--
(a) where the Assessing Officer] has refused to admit evidence which ought to have been admitted; or
(b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer; or
(c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or
(d) wh
(1) An appeal under section 24 or section 26 to the Appellate Tribunal shall be in Form F and shall be verified in the manner provided therein.
(2) The memorandum of cross-objections under sub-section (2A) of section 24 shall be in Form G and shall be verified in the manner provided therein.
An application under sub-section (1) of section 27 requiring the Appellate Tribunal to refer to the High Court any question of law shall be in Form H.
Any person, not being a legal practitioner, a chartered accountant or a person regularly employed by an assessee, shall be entitled to appear on behalf of an assessee before any wealth-tax authority or the Appellate Tribunal as provided in section 44 of the Act, if he--
(i) has at any time before the 1st day of October, 1957, appeared before any income-tax authority in the capacity of an income-tax practitioner; and
(ii) has not been disqualified to represent an assessee in any income-tax proceeding by reason of any direction made under sub-section (5) of section 288 of the Income-tax Act, 1961.
(1) For the purposes of sub-section (2) of section 34AB, the qualifications for registration as valuers of different classes of asset shall he as specified in sub-rules (2) to (11).
(2) A valuer of immovable property (other than agricultural lands, plantations, forests, mines and quarries) shall have the following qualifications, namely :--
10(i)
he must--
(A) be a graduate in civil engineering, architecture or town planning of a recognised university; or
(B) be a post-graduate in valuation of real estate from a recognised university; or
(C) possess a qualification recognised by the Central Government for recruitment to superior services or posts under th
(1) An application for registration as a valuer under section 34AB shall be in Form N and shall be verified in the manner specified therein and shall be accompanied by a fee of Rs. 1,000 which shall not be refunded if the application is rejected.
(2) In the case of a person whose name has been included in the Register of Valuers on or after the 1st day of June, 1985, but before the 1st day of June, 1988, and who makes an application for continuation of his registration as a valuer under sub-section (1) of section 34AE, such application need not be accompanied by any fee.
(3) Where an application for registration as a valuer is pending before the Board immediately before the 1st day of June, 1988, and such application includes the details of the revised qualifications specified in sub-rules (2), (6), (7), (8), (9) and (11) of rule 8A, suc
Omitted by the Wealth-tax (Second Amendment) Rules, 1980, w.e.f. 28-1-1980. Original rule was inserted by the Wealth-tax (Second Amendment) Rules, 1974, w.e.f. 8-10-1974.]
(1) Subject to the provisions of sub-rules (2) and (3), the lees to be charged by a registered valuer for valuation of any asset shall not exceed the amount calculated at the following rates, namely :-
(a) On the first Rs.5.00.000 of the asset as valued 1/2 per cent of the value;
(b) On the next Rs. 10 lakhs of the asset as valued 1/5 per cent of the value;
(c) On the next Rs.40 lakhs of the asset as valued 1/10 per cent of the value;
(d) On the balance of the asset as valued 1/20 per cent of the value.
(2) Where two or more assets are required to be valued by a registered valuer at the instance of an assessee all such assets shall be deemed to constitute, a single asset for the purposes of calculating th
The report of valuation by a registered valuer in respect of any asset specified in column (1) of the Table below shall be in the Form specified in the corresponding entry in column (2) thereof and shall be verified in the manner indicated in such Form :--
For the purposes of section 34AD of the Act, a registered valuer shall be deemed to have been guilty of misconduct in his professional capacity if he has been found so guilty,--
(i) in a case where he is a member of any association or institution established in India having as its object the control, supervision, regulation or encouragement of the profession of engineering, architecture, accountancy, or company secretaries or such other profession as the Board may specify in this behalf by notification in the Official Gazette, by such association or institution; or
20(ii)
in any other case, by the Chief Commissioner or the Director General, in accordance with the procedure laid down in rule 8F and rules 8H to 8K.
20 Substituted by the Wealth-tax (Am
(1) Where the Chief Commissioner or the Director General, on the basis of information in its possession, is of the opinion that any registered valuer, or any other person, not being a person referred to in sub-clause (2) of clause (e) of sub-rule (13) of rule 8A, who has made an application for registration as a valuer under rule 8B, is guilty of professional misconduct in connection with any proceeding under any law for the time being in force, he shall frame definite charges against such person and shall communicate them in writing to him together with a statement of the allegations in support of the charges.
(2) On receipt of the charge sheet and the statement referred to in sub-rule (1), the person shall be required to submit within thirty days of the receipt of the said charge sheet and the statement or, within such further time as the Chief Commissioner or the Director Genera
[Omitted by the Wealth-tax (Second Amendment) Rules, 1988, w.e.f. 1-6-1988. Original rule was inserted by the Wealth-tax (Second Amendment) Rules, 1980, w.e.f. 28-1-1980.]
(1) On receipt of the written statement of defence, or if no such statement is received within the time specified, the Inquiry Officer shall inquire into such of the charges as are not admitted.
(2) The Inquiry Officer shall, in the course of the inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material in regard to the charges.
(3) The person who has made an application for registration as a valuer, or, as the case may be, the registered valuer, shall be entitled to cross-examine the witnesses examined in support of the charges and to give evidence in person.
(4) If the Inquiry Officer declines to examine any witness on the ground that his evidence is not relevant or material, he shall record his reasons in writing.
(1) The Chief Commissioner or the Director General shall consider the report of the Inquiry Officer and record his findings on each charge and, where he does not agree with the finding of the Inquiry Officer shall record the reasons for his disagreement.
(2) If the Chief Commissioner or the Director General is satisfied on the basis of his findings on the Inquiry Officer's report that the registered valuer or, as the case may be, the person who has made an application for registration as a valuer, is guilty of misconduct in connection with any proceeding under any law for the time being in force, he shall pass an order under section 34AD of the Act removing the name of the registered valuer from the register of valuers or, as the ease may be, directing that the person shall not be registered as a valuer.
(3) The Chief Commissioner or the
The procedure prescribed in the aforesaid rules shall, mutatis mutandis, apply when the Chief Commissioner or the Director General himself conducts the inquiry without appointing an Inquiry Officer.
If a change of an Inquiry Officer becomes necessary in the midst of an inquiry, the Chief Commissioner or the Director General may appoint any other Inquiry Officer not below the rank of a Chief Commissioner or Commissioner] and the proceedings shall be continued by the succeeding Inquiry Officer from the stage at which they were left by his predecessor.
[Omitted by the Wealth-tax (Second Amendment) Rules, 1988, w.e.f, 1-6-1988. Original rule 8L was inserted by the Wealth-tax. (Second Amendment) Rules, 1980, w.e.f. 8-10-1980.]
[Omitted by the Wealth-tax (Third Amendment) Rules, 1984, w.e,f. 1-4-1985. Original rule was inserted by the Wealth-tax (Second Amendment) Rules, 1980, w.e.f. 28-1-1980.]
(1) The application to the Chief Commissioner or Commissioner] under section 42B for information relating to an assessee in respect of any assessment made under the Act shall be made in Form I.
(2) The information under section 42B shall be furnished by the Chief Commissioner or Commissioner in Form J.
(3) Where it is not possible for the Chief Commissioner or Commissioner to furnish the information asked for by the applicant under section 42B owing to the fact that the relevant assessment has not been completed, he shall inform the applicant in Form K.
(4) Where the Chief Commissioner or Commissioner is satisfied that it is not in the public interest to furnish or cause to be furnished the information asked for, he shall intimate the fact to the applicant in Form L.
(1) The powers of starch and seizure under section 37A shall be exercised in accordance with sub-rules (2) to (13).
(2) (a) The authorisation under sub-section (1) of section 37A (other than an authorisation under the proviso thereto) by the Director General or Director, or the Chief Commissioner or Commissioner or any such Deputy Director, or Deputy Commissioner as is empowered by the Board in this behalf shall be in Form M;
(b) The authorisation under the proviso to sub-section (1) of section 37A by a Chief Commissioner or Commissioner shall be in Form M-1;
(c) The authorisation under sub-section (2) of section 37A by a Chief Commissioner or Commissioner shall be in Form M-2.
(3) Every authorisation referred to in sub-rule (2) shall be in wri
(1) The authorisation under sub-section (1) of section 37B by the Director General or Director or the Chief Commissioner or Commissioner shall be in Form M-3, shall be in writing under the signature of the officer issuing the authorisation and shall bear his seal
(2) The officer authorised to make requisition under sub-section (1) of section 37B (hereinafter referred to as the requisitioning officer) shall make the requisition in writing to the officer or authority referred to in clause (a) or clause (b) or, as the case may be, clause (c) of the said sub-section (hereinafter referred to as the delivering officer or authority) calling upon the delivering officer or authority to deliver the books of account or other documents or, as the case may be, to furnish a note or inventory of the articles or things including money, specified in the requisition to him. The requisition shall be
The "prescribed authority" for the purposes of clause (ii) of sub-section (2) of section 44 shall be the Chief Commissioner or Commissioner having jurisdiction over the case in the proceedings connected with which the person concerned is alleged to be guilty of misconduct.
In calculating the interest payable by the asscssee or the interest payable by the Central Government to the assessee under any provision of the Act,--
(a) where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated;
(b) where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated;
(c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be roun
Under the Schedule III to the Wealth-tax Act, 1957,--
(a) the form for certificate of quoted shares or debentures of a company to be issued by a stock exchange under sub-rule (9) of rule 2 shall be in Form O-11;
(b) the form for certificate of valuation of unquoted shares in an investment company by the auditors of the company as per sub-rule (5) of rule 12 shall be in Form 0-12;
(c) the form in which a statement of valuation of jewellery is to be filed by an assessee as per rule 18 shall be in Form 0-8A.
APPENDIX
TABLE OF (1/p+d - 1)
(1/p+d - 1) Value of life interest of Re. 1 per annum at 6 1/2 % rate of interest
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