Wealth tax liability

[ratan rathi]

Whether wealth tax liability arises if agri land owned by assessee is situated within muncipal(urban area) area. If yes, whether agriculture is to be actually done or Non converted land is enough.Further cerain land are barren land agri -operation on the same is not profitable, even then agri activity is compulsory for exemption.Please clarify.

[Surender Gupta]

As per the provisions of the wealth tax act, an urban land is subject to tax. However, if construction is not permitted, such land is not taxable. Mere use in agriculture can not debar such asset from wealth tax.

[ratan rathi]

Is it not an agri land on which construction is not permissible hence not liable to wealth tax. Agri land in this way may get exemption from wealth tax.Pls confirm as some court decisons are against the view.

AI Summary

Wealth tax on urban land: taxability depends on construction permission; mere agricultural use does not exempt.
Urban land in municipal or urban areas is generally subject to wealth tax, but land on which construction is not permitted is not taxable; mere agricultural use of urban land does not itself exempt the asset from wealth tax. Exemption depends on the land's legal status-such as a formal non-convertible or non-developable classification-rather than on the profitability or actual performance of agricultural operations.