AUBSP Description

Definition of Assets under Wealth-tax Act, 1957

House [Sec. 2(ea)(i)], Motor Cars[Sec. 2(ea)(ii)], Jewellery etc.[Sec. 2(ea)(iii)], Yachts, boats and aircrafts[Sec. 2(ea)(iv)], Urban Land[Sec. 2(ea)(v)] and Cash in hand[Sec. 2(ea)(vi)]

As per sec. 2(ea), the following shall be treated as an asset and therefore considered for calculation of the Net Wealth of the assessee on the valuation date:
(A) House;
(B) Motor Cars;
(C) Jewellery etc.;
(D) Yachts, boats and aircrafts;
(E) Urban Land; and
(F) Cash in hand.

(A) House [Sec. 2(ea)(i)]:


House means any building or land appurtenant thereto (hereinafter referred to as “house”), whether used for-

-- Residential purpose or commercial purposes or
-- For the purpose of maintaining a guest house or otherwise;
-- And including a farm house if

- It is situated within 25 kilometres
- From local limits of any municipality or a Cantonment Board.

For the above purpose “Municipality” includes Municipal Corporation or a municipality known by any other name.

However, the following shall not be included in the meaning of house and therefore not treated as an “Assets”:

(i) A residential house not treated as an asset if-

-  it is meant exclusively for residential purposes; and
- which is allotted by a company
- to an employee or an officer or a director;
- who is in whole-time employment, having a gross annual salary of less than Rs. 5, 00, 000 (five lakh) rupees.

Note: Gross Annual Salary, as per common parlance mean basic pay, bonus, commission, all allowance (whether taxable or not) but should exclude perquisite and before giving Standard Deduction.

(ii) Any house whether used for residential purpose or commercial purpose, not to be treated as an asset if-
- that house forms part of stock-in-trade of the assessee.

(iii) Any house will not be treated as an asset if-
- it is occupied by the assessee for the purpose of any business or profession carried on by him.

(iv) Any residential property will not be treated as an asset if-
- it is let out for a minimum period of 300 days in the previous years.

(v) Any property will not be treated as an asset if-
- it is in the nature of commercial establishments or complexes.

(B) Motor Cars[Sec. 2(ea)(ii)]:


All types of motor Cars (whether Indian or imported) will be treated as asset.

However, the following Motor Cars shall not be treated as an asset if-
- that motor cars used by the assessee in the business of running them on hire; or
- that motor cars used by the assessee as stock-in-trade.


(C) Jewellery etc.[Sec. 2(ea)(iii)]:


The following shall be treated as an asset:
-   jewellery, bullion, furniture, utensils; or
- any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals.

Jewellery for this purpose includes:

(a) Ornaments:
-  made of gold, silver, platinum or any other precious metal; or
-  any alloy containing one or more of such precious metals.

(b) Precious or semi-precious stones:
-  Whether or not set in any furniture, utensils. Or other article or sewn into any wearing apparel.

However, if any of the above assets used by the assessee as stock-in-trade, it will not be treated as an asset.

(D) Yachts, boats and aircrafts[Sec. 2(ea)(iv)]:


Yachts, boats and aircrafts will be treated as an asset.

However, the following Yachts, boats and aircrafts shall not be treated as an asset if:
-  Those are used by the assessee for commercial purposes.

For the above purpose “Commercial purpose” will be decided by the licence given by the concern ministry/authority e.g. Ministry of Civil Aviation.

“Ship” is neither a boat nor a yacht and is therefore not an asset. But “Helicopter” is an aircraft and therefore will be treated as an asset.

(E) Urban Land[Sec. 2(ea)(v)]:


The Lands situated within the following area are “Urban Land” and therefore should be treated as an Asset.

(i) Lands situated within Municipality:

Land situated in any area which is comprised within the jurisdiction of:
- a municipality or
- a cantonment board;

And which has a population of not less than 10, 000 according to the last preceding census of which the relevant figures have been published before the valuation date.

For the above purpose “Municipality” includes:
- a municipal corporation;
- a notified area committee;
- a town area committee; or
- a municipality known by any other name.

(ii) Lands situated within Notified Area:

Land situated in any area within such distance,
-  not being more than 8 kilometres from the local limits of
- any municipality or cantonment board referred to in (i) above,
- as the Central Government may specify in this behalf in the Official Ga­zette.

(F) Cash in hand[Sec. 2(ea)(vi)]:


Cash in hand will be treated as an asset if:

(a) For individuals and HUF: Cash in hand, whether recorded or not in excess of Rs. 50, 000 will be considered as an asset.

(b) For other person: In the case of other persons any amount not recorded in the books of account shall be treated as an asset.



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