Wealth tax - Proprietorship concern

[Asked by Guest]

If a proprietorship concern has given its properties on Rent to a Company, then whether wealth Tax will be applicable on it or not, in case:- 1) it's business is of letting out of properties 2) it is carrying on Warehousing business and renting properties is incidental to it.

Kindly see definition of assets under section 2(ea) of the wealth tax act, 1957. Accordingly, any house for residential or commercial purposes which forms part of stock-in-trade; is excluded from the scope of wealth tax. Further, any property in the nature of commercial establishments or complexes is also excluded from the scope of wealth tax. In addition, any property let out for 300 days in the previous year is not subject to wealth tax.

AI Summary

Wealth tax applicability on let-out property hinges on asset classification and sustained letting exemption under wealth tax law
Wealth tax on a proprietor's rented property depends on its classification: properties held as stock-in-trade or as commercial business assets are excluded from wealth tax; additionally, property that is let out for 300 days in the previous year is not subject to wealth tax.