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of <h1>Contingent Debts Not Recognized Until Occurrence; Professional Fees Taxable as Assets Under Wealth Tax Act, 1957.</h1> A contingent debt lacks present existence and is not recognized as a debt in law unless the contingency occurs. The circular clarifies that fees outstanding on the valuation date for professionals using cash accounting must be included in net wealth for wealth-tax assessment. A debt is defined as a sum payable under an existing obligation, and fees due to professionals are considered assets under the Wealth Tax Act, 1957. The circular advises that such fees are taxable even if the cash accounting method is used. Wealth Tax Officers should apply this guidance to pending cases, while closed cases remain unaffected.
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