Wealth tax returns

Every individual, who has wealth exceeding Rs 15 lakh, is required to pay wealth tax as well as file a return of wealth tax with the revenue authorities by July 31, immediately following the end of the previous year (the previous year runs from April 1 to March 31).

Currently, the wealth tax rate is 1%. Wealth is the value of prescribed assets of an individual as reduced by debts owed in respect of assets. Therefore, if the asset is valued at Rs 20 lakh and the outstanding loan against the asset is Rs 16 lakh, the amount that would be considered as wealth would be Rs 4 lakh.

An important point to note is that the value for the purpose of wealth-tax would be the value of the assets as on the last day of the respective previous year (i.e., March 31). There are prescribed guidelines that need to be followed for valuation of the assets. Here’s an example. Sunil owns the following assets as on March 31, 2008: One residential house valued at Rs 60 lakh; one motor car valued at Rs 10 lakh; a bank balance of Rs 3 lakh; shares valued at Rs 57 lakh and gold jewellery valued at Rs 20 lakh.

Would this mean that Sunil has wealth of Rs 1.5 crore and he has to pay a wealth-tax of Rs 1.35 lakh? (i.e., 1% of Rs 1.35 crore as mentioned above. It should be noted that only wealth exceeding Rs 15 lakh is taxable). Thankfully the answer is No! While the definition of assets covered under wealth tax is extremely wide, fortunately a description has been provided for assets that fall within the purview of wealth-tax. Broadly, the following assets are considered as part of the taxable wealth: House, motor car, jewellery, cash in hand in excess of Rs 50,000, urban land and yachts, boats and aircraft.

Therefore, in our example, shares and the bank balance are not covered as taxable assets. In addition to this, even the covered assets enjoy certain exemptions. Typically, the wealth tax is only applicable on non-productive assets. Thus, where the aforesaid assets are used for commercial purposes (like boats and aircraft) or held as stock for trading purposes (like jewellery and motor car), they are not liable to wealth tax. One must be careful in examining the exemptions that are available in respect of each asset.

Let us for instance, look closely at the definition of house. Your own house, in which you reside, is not an asset subject to wealth tax, nor is a plot of land owned by you provided that it does not exceed 500 sq metres. A house held as stock in trade or used for own business or profession is also exempt, as are commercial complexes. If a residential property has been let out for 300 days or more in the previous year, the same is also exempt from wealth-tax.

Therefore, in Sunil’s case, even the residential house is exempt from wealth tax (and only the car and jewellery are finally liable to wealth tax). After all this, Sunil would only be liable to pay wealth tax on the value of Rs 30 lakh, the wealth tax amounting to a mere Rs 15,000. You must also note that dispersing ownership of the asset amongst family members may not exempt you from being taxed. Similar to the income tax provisions, there are provisions for clubbing where assets transferred by an individual to his spouse, son’s wife or to a person for the benefit of spouse or son’s wife without adequate consideration form part of his/her wealth and not the transferee’s. While resident Indians are liable to wealth tax on their global wealth, foreign citizens please note that your assets situated in India are also liable to wealth tax in India

Vitamins vital?

ARE you considering taking vitamin or mineral supplements? Do you think you need them or plan to go for it anyway since they “can't hurt”? Well, think again. Our body needs a small amount of vitamins and minerals every day. A regular Indian diet, which means simple homecooked meals, provides enough of each vitamin and mineral.

“Research indicates that most of the vitamins we get from the food we eat are better than those contained in tablets. However, some people may need supplements to correct deficiencies of particular vitamins or minerals. Low levels of certain vitamins may lead to a deficiency disease. For example, if you don't get enough Vitamin D, you could develop rickets. Similarly, vitamins help prevent medical problems — Vitamin A prevents night blindness,” says Dr Richa Anand, executive dietician, Dr L H Hiranandani Hospital, Mumbai.

“A single daily multivitamin is usually safe, but you can overdo it sometimes. For example, Vitamin D, iron, zinc and selenium are toxic in high doses. Energy comes from the foods you eat. Your body needs calories to give you energy. Vitamins and minerals do not provide calories. They are not substitutes for healthy eating. Under certain situations or special conditions, they may be recommended,” says Namita Jain, lifestyle management expert.

However, talk to your doctor or a dietician about which supplements and what doses might be appropriate for you. Be sure to ask about possible side-effects and combinations with other medications, advise experts.

Taking too many vitamins can also be dangerous. This is especially true of the fatsoluble vitamins A, D, E, and K, because it's harder for the body to get rid of any excess through urine. “If you're generally healthy and eat a wide variety of foods, including fruits, vegetables, whole grains, legumes, lean meats and fish, you don't need dietary supplements,” says Dr Vasant Nagvekar, physician, Lilavati Hospital, Mumbai.

But if you need them, what's better — the tablet or liquid form? “Tablets at times don't get digested, while the liquid is absorbed into the system fully and is thus more effective. The absorption level of tablets from the intestine is only 40 per cent, while it's 80 per cent for soft gels and liquids. And best time to take them is after meals,” adds Dr Nagvekar.

To sum it up, supplements can complement your regular diet if you have trouble getting enough nutrients, but they aren't meant to be food substitutes.

WHAT TO LOOK FOR

Check the label for the ingredients.
Look for expiration dates. Dietary supplements can lose potency over time, especially in hot and humid climates.
Avoid supplements that provide mega doses.
Choose those that provide about 100 per cent of the daily value (DV) of all the vitamins and minerals, rather than one, for example, with 500 per cent of the DV for one vitamin and 20 per cent of another.

WHO NEEDS DIETARY SUPPLEMENTS?

They may be appropriate if you…

Don't eat well or consume less than 1,600 calories a day.
Are allergic to particular foods.
Are a geriatric patient unable to consume balanced diets.
Are a vegetarian and don't substitute or complement your diet appropriately.
Are pregnant or breastfeeding.
Are a woman who experiences heavy bleeding during the menstrual period.
Are a postmenopausal woman.
Are a chain smoker or alcoholic.
Have a medical condition that affects how your body absorbs, uses or excretes nutrients, such as diarrhoea, food allergy, disease of the liver, gallbladder, intestines or pancreas.
Have had surgery on your digestive tract and are not able to digest and absorb nutrients.