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THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(ii)l

MINISTRY OF FINANCE

(Central Board of Direct Taxes)

NOTIFICATION

New Delhi, the 11th September, 1978

Wealth-Tax

S.O. 554(E).—The following draft of certain rules further

to umend the Wealth-tax Rules, 1957, which the

Centnil

Board of Direct Taxes proposes to make in exercise of the

powers conferred by section 46 of the Wealth-tax Act, 1957

(27 of 1957), is hereby published for the information of all

persons likely to be affected thereby; and notice is hereby

given that the said draft will be taken into consideration on

or after the 1st day of November, 1978.

2. Any objection or suggestion which may

received

from any person with reference to the said draft before the

said date will be considered by the Central Board of Direct

Taxes.

DRAFT RULES

1. (1) These rules may be called the Wealth-tax (Second

Amendment) Rules, 1978.

(2) They shall come into force on the 1st day of April,

1979.

2. In the Weafth-tax Rules, 1957, after rule 1B, the follow-

ing rule shall be inserted, namely ;—

'IBB. Valuation of house.—(1) For the purposes of sub-

section (1) of section 7, the value of a house ex-

clusively uacd for residential

purposes

shall

arrived at by multiplying the amount of the net

maintainable rent of the house by the fraction

—

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Provided that in relation to a house which is situate

on leasehold land, this sub-rule shall have effect

as if for the fraction 100 the fraction 100 had

been substituted.

(2) For the purposes of this sub-rule,—

(a) "net maintainable

rent", in

relation, to a house,

means the amount of the gross maintainable rent

as reduced by—

(i) the amount of tax levied in the previous year by

any local authority in respect of the house;

(ii) a sura equal to one-tenth of the gross maintain

able rent in respect of the repairs of the house;

(iii) any sums spent during the previous year to collect

the rent from the house, not exceeding five per

cent, of the gross maintainable rent of the house;

(iv) the amount of any premium paid during the

previous year to insure the house against risk of

damage or destruction;

(v) the amount of such ground rent payable during

the previous year, where the property is subject

to ground rent;

(vi) any sumg paid in the previous year on

account

of land revenue or any other tax levied in the

previous year by the Government in respect of

the house;

(b) "gross mantainabTe rent", in relation to a house,

means—

(i) the sum for which the house might reasonably be

expected to let from year to year; or

(ii) where the house is let and the annual rent receiv-

er or receivable by the owner in respect thereof

is in excess of the sum referred to in sub-clauae

(i), the amount so received or receivable;

an assessment has to be made under the Act, means

the previous year adopted under the Income-tax Act,

1961 (43 of 1961) for the purposes of computing

the income chargeaMe under the head "Income from

house property" of the assessee for that assessment

year.

(3) Where the unbuilt area of the plot of land appurtenant

to ihe house exceeds the specified area, the value of

the

house arrived at in accordance with the provisions of sub-

rule (1) shall be increased by an amount calculated as herc-

muler, namely :—

(i) where the difference between the un-

built area and the specified area does

not exceed 5 pit cent, of the aggregate

area

by an amount

equal to 10 per

cent, of such

value;

(ii) where the difference between the un- by an amount

built area and the specified area ex- equal to 20 per

cecds 5 per cent, but does not exceed cent, of such

10 per cent, of the aggregate area value ;

(iii) wh:re tn; difference between ihe un- by an amount

built area and th.3 specified area ex- equal to 30 per

ceeds 10 per cent, but does not exceed cent, of such

15 per cent, of the aggregate area

value ;

(iv) where the difference between the un- by an amount

built area and the specified area ex- equal to 40 per

ceeds 15 per cent, but docs not exceed cent, of

such

20 per cent, of the aggregate area

value.

Explanation.—For the purposes of this rule,—

(i) "aggrcgaLe area," in relation to the plot of land on

which the house is built, means the aggregate of

the unbuilt area and the area on which the house

is built;

(ii) "specified area", in relation to the plot of land on

which the house is built, means,—

(a) where the house is situate at Agra, Ahmedabad,

Allahabad, Amritsar, Bangalore, Bhopal, Bombay,

Calcutta, Cochin, Delhi,

Hyderabad,

Tndorc,

Jabalpur,

Jamshedpur,

Kanpur,

Lucknow,

Ludhiana, Madras, Madurai, Nagpur Patna, Pune,

Salem, Sholapur, Srinagar, Surat,

Tirucbirapalli,

Trivandrum, Vadodara

(Baroda) or

Varanasi

(Banaras), sixty per cent of the aggregate area ;

and

(b) where the house is situate at any

other place,

seventy per cent of the aggregate urea ;

Gii) "unbuilt area", in relation to the

aggregate area

of the plot of land on which the house is built,

means that part of such aggregate area on which

no building has been erected,

(4) Where on the transfer of a house situated on lease-

hold land a specified part of the unearned increase {that is

to say, the difference between the fair market value of such

land as on the date of valuation arid the

amount of the

premium paid to the Government or, as the case may be,

to any authority referred to in clause (20A) of section 10

of the Tncome-tax Act, 1961 (43 of 1961) for the lease of

the land] is payable to the Government or to such authority,

the value of such house as determined under sub-rule (1)

shall be reduced by the amount so payable or by an amount

equal to fifty per cent of the value of the house as

determined, whichever is less.

(5) Nothing contained in this rule shall apply,—

(i) where, having regard to the facts and circumstances

of the case, the Wealth-tax Officer is of ihe opinion

that it is not practicable to apply the

provisions

of this rule la such a case ; or

(ii) where the difference between the unbuilt area and

the specified area exceeds twenty per cent of the

aggregate area ; or

(iii) in the case of an assessee, being a lessee of the

land on which the house is

situate, the

lease

expires within a period not exceeding fifteen years

from the relevant valuation date ; or

(iv) where, having regard to the facts and circumstances

of the case, the Wealth-tax Officer isi of the opinion

that the valuation of the house may be referred

to a Valuation Officer:

Provided that the previous approval of the

Inspecting

Assistant Commissioner shall be

obtained before

making a reference to the Valuation Officer.

[No. 2495/F. No. 143(2)/78-TPLl

S. N. SH.FNDE, Secy.

Central Board of Direct Taxfs

PRINTED BY THE MANAOBK, GOVT. OP 1NPU PRMS9, RING ROAD, NEW DELHI-110064

ANB PUBLISHED BY THE CONTKOLLlll OF PUBLICATIONS, DELHI-110054,

1978