The Income Tax Department on Tuesday amended Wealth Tax Rules to make it compulsory for companies as well as individuals and Hindu Undivided Families with income above Rs 1 crore a year to file their wealth tax returns in electronic form with digital signature in an attempt to have tax payer information ready for quick analysis and selection for scrutiny.
The rules allow tax payers freedom of self assessment with the added relief of not having to attach any supporting document, statement of computation or proof of having paid the tax or interest.
However, the benefit of self declaration comes with a threat — false statement shall invite prosecution. Any wrong information provided in the self assessment return where the tax evaded is above Rs one lakh, would attract rigorous imprisonment of at least six months, which could go up to seven years with fine. In other cases, rigorous imprisonment may vary from three months to three years with fine, said the rules notified by the Department. The new return is applicable from fiscal 2013-14 onwards.
Persons with less than Rs one crore gross receipts from business or less than Rs 25 lakh gross receipts from profession in a year may file the return in paper form for 2013-14, said the rules.
Now, wealth tax of 1% is levied on assets exceeding Rs 30 lakh held by individuals, HUFs and companies. Former finance minister P Chidambaram had proposed in the revised Direct Tax Code Bill to raise the threshold of this levy to Rs 50 lakh and to include financial assets in its purview. He had also proposed to reduce wealth tax rate of 0.25% in addition to excluding companies from the scope of this levy.