No wealth tax on agriculture land

Finance bill 2013-14 has passed in Lok Sabha on Tuesday 30 April 2013 and there are some amendments in the rules of taxation. The new amendment rules are as under. In this contrast, Finance bill explain that no wealth tax will be levy on agriculture land. New and old rules are as follows.

Old rule
The urban land is not chargeable to wealth-tax if it is a land:
(1)  On which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated; or

(2)  occupied by any building which has been constructed with the approval of the appropriate authority; or

(3)  being an unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him; or

(4)  held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him.

New rule

Land classified as agricultural land in the records of the Government and used for agricultural purposes, will not be treated as an 'asset' under Section 2(ea) with retrospective effect from the AY 1993-94. Consequently, such land will not be chargeable to wealth-tax, even if such land is situated in an urban area.
As per the amended provision, following lands will not be chargeable to wealth-tax:

(1) Land classified as agricultural land in the records of the Government and used for agricultural purposes; or

(2) Land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated; or

(3) Land occupied by any building which has been constructed with the approval of the appropriate authority; or

(4) An unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him; or

(5) Land held by the assessee as stock-in-trade for a period of 10 years from the date of its acquisition by him.
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