Wealth tax liability

[Vikas Aggarwal]

Dear all,

Can you please suggest me in the following issue:-

An individual run a proprietorship business and having liable to tax audit, on 31.3.2012 in his audited balance sheet show cash of Rs. 2,50,000/- is this cash liable for Wealth tax, this cash is a normal course of business activity & totally use in the business of the individual (This cash is a productive asset)

Can there is any judgement to exempt this excess cash for liable to wealth tax.

 

regards,

CA Vikas Aggarwal

 

[CAGOPALJI AGRAWAL]

Keeping in view that your taxable wealth exceeds the limit of Rs. 30.00 lac from other assets, cash in excess of 50K would be taxable in case of individual.

AI Summary

Wealth tax on excess cash: business cash may be taxable when aggregate taxable wealth exceeds the threshold.
If an individual's taxable wealth from other assets exceeds the statutory threshold, cash holdings above the permitted cash allowance are included in taxable net wealth. The forum reply states that, even if cash is held and used in the normal course of business as a productive asset and appears in the audited balance sheet, cash in excess of fifty thousand is taxable for an individual when aggregate taxable wealth surpasses the threshold. The business use of cash does not by itself exempt it from wealth tax once the overall condition is met.