(1) 1 [In computing the netwealth-
(a)ofan individual, there shall be included, as belonging to that individual, thevalue of assets which on the valuation date are held -]
2 [(i)by the spouse of such individual to whom such assets have been transferred bythe individual, directly or indirectly, otherwise than for adequateconsideration or in connectionwith an agreement to live apart, or
(ii)by a minor child, not being3 [a minor child suffering from anydisability of the nature specified in section 80U of the Income-tax Act or] a married daughter, of suchindividual, 4 [*****], or]
(iii)by a person or association of persons to whom such assets have been transferredby the individual 5 [directly or indirectly,] otherwise than foradequate consideration for the immediate or deferred benefit of the individual,his or her spouse 6 [*****]or]
(iv)by a person or association of persons to whom such assets have been transferredby the individual otherwise than under an irrevocable transfer, 5 [or]
5 [(v)by the son's wife,7 [*****] of such individual, to whom such assetshave been transferred by the individual, directly or indirectly, on or after the1stday of June, 973,otherwise than for adequate consideration,]8 [or]
8 [(vi)by a person or association of persons to whom such assets have been transferredby the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequateconsideration for the immediate or deferred benefit of the son's wife,7 [*****]of such individual or both,]
whetherthe assets referred to in any of the sub-clauses aforesaid are held in the formin which they were transferred or otherwise:
9 [Providedthat where the transfer of such assets or any part thereof is either chargeableto gift-tax under the Gift-tax Act, 1958 (18 of 1958),or is not chargeable under section 5 of that Act, for any assessment year commencing 10 [afterthe 31stday of March, 1964,but before the 1stday of April, 1972],the value of such assets or part thereof, as the case may be, shall not beincluded in computing the net wealth of the individual:]
11 [Providedfurther that nothing contained in sub-clause (ii) shall apply in respect of suchassets as have been acquired by the minor child out of his income referred to in the proviso tosub-section (1A)of section 64of the Income-tax Act and which are held by him on the valuation date:
Providedalso that where the assets held by a minor child are to be included in computingthe net wealth of an individual, such assets shall be included,-
(a) where the marriage ofhis parents subsists, in the netwealth of that parent whose net wealth excluding the assets of the minor childso includible under this sub-section) is greater; or
(b) where the marriage ofhis parents does not subsist, in thenet wealth of that parent who maintains the minor child in the previous year asdefined in section 3of the Income-tax Act,
andwhere any such assets are once included in the net wealth of either parent, anysuch assets shall not be included in the net wealth of the other parent in anysucceeding year unless the Assessing Officer is satisfied, after giving thatparent an opportunity of being heard, that it is necessary so to do.]
1 [(b)of an assessee who is a partner in a firm or a member of an association of persons (notbeing a co-operative housing society), there shall be included, as belonging tothat assessee, the value of his 12 [interest in the assets of the firm] orassociation determined in the manner laid down in Schedule III:
13 [Providedthat where a minor is admitted to the benefits of partnership in a firm, thevalue of the interest of such minor in the firm, determined in the mannerspecified above, shall be included in the net wealth of the parent of the minor,so far as may be, in accordance with the provisions of the third proviso toclause(a)].
14 [(IA)Where, in the case of an individual being a member of a Hindu undivided family, anyproperty having been the separate property of the individual has, at any timeafter the, 31stday of December, 1969,been converted by the individual into property belonging to the family throughthe act of impressing such separate property with the character of properlybelonging to the family or throwing it 15 [into the common sk of thefamily or been transferred by the individual, directly or indirectly, to thefamily otherwise than for adequate consideration (the property so converted ortransferred being hereinafter referred to as the converted property)], then,notwithstanding anything contained in any other provision of this Act or in anyother law for the time being in force, for the purpose of computing the netwealth of the individual under this Act for any assessment year commencing on orafter the 1stday of April, 1972,-
(a)the individual shall be deemed to have transferred the converted property,through the family,
tothe members of the family for being heldby them jointly;
(b)the converted property or any part thereof 16 [*****] shall be deemedto be assets belonging to the individual and not to the family;
17 [(c)where the converted property has been the subject-matter of a partition (whetherpartial or total) amongst the members of the family, the converted propertyor any part thereof which is received by the spouse 18 [*****] of theindividual on such partition shall be deemed to be assets transferred indirectlyby the individual to the spouse 19 [*****] and the provisions ofsub-section (1) shall, so far as may be, apply accordingly:]
Providedthat the property referred to in clause (b) or clause (c) shall, on beingincluded in the net wealth of the individual be excluded from the net wealth ofthe family or, as the case may be, the spouse 20 [*****] of theindividual.
21 [*****]
22 [*****]
(4) Nothing contained in clause (a) ofsub-section (1)shall apply to any such transfer as is referred to therein made by an individualbefore the 1stday of April, 1956,and the value of any assets so transferred shall not be included in thecomputation of his net wealth.
5 [(4A) Notwithstanding anything insub-section (4),nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to thereinmade before the 1stday of April, 1963,by an individual who but for the extension of this Act to theUnion territories of Dadra and Nagar Haveli, Goa, Daman and Diu, andPondicherry, would not have been an assessee, and the value of any assets sotransferred shall not be included in the computation of his net wealth.]
(5)The value of any assets transferred under an irrevocable transfer shall beliable to be included in computing the net wealth of the transferor as and whenthe power to revoke arises to him.
23 [(5A) Where a gift of money from oneperson to another is made by means of entries in the books of account maintained by theperson making the gift or by an individual or a Hindu undivided family or a firmor an association of persons or body of individuals with whom or which he hasbusiness or other relationship, the value of such gift shall be liable to beincluded in computing the net wealth of the person making the gift unless heproves to the satisfaction of the 23 [Assessing Officer] that themoney has actually been delivered to the other person at the time the entrieswere made.]
24 [(6) For the purposes of this Act, theholder of an impartible estate shall be deemed to be the individual owner of allthe properties comprised in the estate.]
25 [(7) Where the assessee is amember of a co-operative society,company or other association of persons and a building or part thereof isallotted or leased tohim under a house building scheme of the society, company or association,as the case may be, the assessee shall, notwithstanding anything contained inthis Act or any other law for the time being in force, be deemed to be the ownerof such building or part and the value of such building or part shall beincluded in computing the net wealth of the assessee; and, in determining thevalue of such building or part, the value of any outstanding instalments of theamount payable under such scheme by the assessee to the society, company orassociation towards the cost of such building or part and the land appurtenantthereto shall, whether the amount so payable is described as such or in anyother manner is such scheme, be deducted as a debt owed byhim in relation to such building orpart.
(8)A person-
(a)who is allowed to take or retain possession of any building or part thereof inpart performance of a contract of the nature referred to in section 53A of theTransfer of Property Act, 1882;
(b)who acquires any rights (excluding any rights by way of a lease from month tomonth or for a period not exceeding one year) in or with respect to any buildingor part thereof by virtue of any such transaction as is referred to in clause(f) of section 269UAof the Income-tax Act,
shallbe deemed to be the owner of that building or part thereof and the value of suchbuilding or part shall be included in computing the net wealth of such person]
Explanation.-For the purposes of this section, -
(a)the expression "transfer" includes any disposition settlement, trust,covenant, agreement or arrangement; 5 [*****]
26 [(aa)the expression "child" includes a step-child and an adopted child;]
(b)the expression "irrevocable transfer" includes a transfer of assetswhich, by the terms of the instrument effecting it, is not revocable for aperiod exceeding six years or during the lifetime of the transferee, and underwhich the transferor derives no direct or indirect benefit, but does not includea transfer of assets if such instrument--
(i)contains any provision for the re-transfer, directly or indirectly, of the.whole or any part of the assets or income therefrom to the transferor, or
(ii)in any way gives the transferor a right to re-assume power, directly orindirectly, over the whole or any part of the assets or income therefrom; and
27 [(c)the expression "property" includes any interest in any property,movable or immovable, the proceeds of sale thereof and any money or investmentfor the time being representing the proceeds of sale thereof and where theproperty is converted into any other property by any method, such other property28 [*****]
28 [*****]
________________________
1.Substituted by Act 3 of 1989, Section 59(a)(i) w.e.f. 1-4-1989.
2.Sub-clauses (i), (ii) and (iii) Substituted by Act 46 of 1964, Section4(a)(ii)(A) w.e.f. 1-4-1965.
3.Inserted by Act 32 of 1994, Section 52 w.e.f. 1-4-1995.
4.Omitted by Act 18 of 1992, Section 91(a)(i) w.e.f. 1-4-1993.
5.Inserted by Act 41 of 1975, Section 82(i)(a) w.e.f. 1-4-1976.
6.Omitted by Act 18 of 1992, Section 91(a)(i)(2) w.e.f. 1-4-1993.
7.The words "or the sons's minor child" omitted by Act 18 of 1992, Section91(A)(i) w.e.f. 1-4-1993.
8.Inserted by Act 67 of 1984, Section 53 w.e.f. 1-4-1985.
9.Inserted by Act 46 of 1964, Section 4(a)(ii)(B) w.e.f. 1-4-1965.
10.Substituted by Act 32 of 1971, Section 31(a)(i), for "after the 31st day ofMarch, 1964" w.e.f. 1-4-1972.
11.Inserted by Act 18 of 1992, Section 91(a)(i)(5) w.e.f. 1-4-1993.
12.Substituted by Act 18 of 1992, Section 91(a)(ii)(1), for "interest in the firm"w.e.f. 1-4-1993.
13.Substituted by Act 18 of 1992, Section 91(A)(ii)(2) w.e.f. 1-4-1993.
14.Inserted by Act 32 of 1971, Section 31(b) w.e.f. 1-4-1972.
15.Substituted by Act 21 of 1979, Section 23(a), for "into the common sk of thefamily (such property being hereinafter referred to as the converted property)"w.e.f. 1-4-1976.
16.Omitted by Act 41 of 2975, Section 82(ii)(a) w.e.f. 1-4-1976.
17.Substituted by Act 41 of 1975, Section 82(ii)(b) w.e.f. 1-4-1976.
18.The words "or minor child" omitted by Act 18 of 1992, Section 91(b) w.e.f.1-4-1993.
19.Sub-section (2) omitted by Act 3 of 1989, Section 59(b) w.e.f. 1-4-1989.
20.Sub-section (3) omitted by Act 18 of 1992, Section 91 w.e.f. 1-4-1993.
21.Inserted by the Taxation Laws (Extension to Union Territories) Regulation, 1963,Section 3 and Schedule w.e.f. 1-4-1963.
22. Substituted by Act 4 of 1988, Section 127 for "Wealth-tax Officer" w.e.f.1-4-1988.
23.Sub-section (6) and Explanationsubs, by Act 46 of 1964, Section 4(b) w.e.f. 1-4-1965.
24.Sub-section (7) Inserted by Act 32 of 1971, Section 31(e) w.e.f. 1-4-1972 andagain Substituted by Act 33 of 1997, Section 57 w.e.f. 1-4-1997.
25. The words "and" omitted by Act 32 of 1971, Section 31(d)(i) w.e.f. 1-4-1972.
26.Clauses (c) and (d) inserted by Act 32 of 1971, sec 31(d)(ii) w.e.f. 1-4-1972.
27. The word "and" omitted by Act 41 of 1975,Section 82(iv)(c) w.e.f. 1-4-1976.
28.Clause (d) omitted by Act 41 of 1975, Section 82(iv)(d) w.e.f. 1-4-1976.