INCOME TAX

Requirement of obtaining report of a registered valuer for value of jewellery exceeding Rs. 5 lakhs--Rule 18 of Schedule III to the Wealth-tax Act.

Circular No. 646

Dated 15/3/1993

Under the Wealth-tax Act, 1957, value of any asset on the valuation date has to be determined in the manner laid down in Schedule III. Valuation of jewellery is to be made as per rules 18 and 19 contained in Part G of this Schedule. For values of jewellery exceeding Rs.5 lakhs, the assessee are required to obtain a report of a registered valuer in the prescribed form and furnish the same along with his return of net wealth.

2. It has been represented that the requirement of obtaining a report of a registered valuer, every year, in cases where the value of jewellery exceeds Rs.5 lakhs is causing uncalled for hardship to the assessees.

3. The matter has been considered by the Board. It has been decided that the report of the registered valuer obtained for one assessment year can also be used in subsequent four assessment years subject to the following adjustments, namely:--

  (a) where the jewellery includes gold or silver or any alloy containing gold or silver, the value of such gold or silver or such alloy as on the valuation date relevant to the concerned subsequent assessment year shall be substituted for the value of such gold or silver or alloy on the valuation date relevant to the first assessment year.

  (b) where any jewellery or part of jewellery is sold or otherwise disposed of by the assessee, or any jewellery or part of the jewellery is acquired by him, on or before the valuation date relevant to the concerned subsequent year, the value of the jewellery determined for the first assessment year shall be reduced or increased, as the case may be, and the value as so reduced or increased shall be the value of the jewellery for such subsequent assessment years.

4. In such subsequent four assessment years, the requirement of rule 18(2)(ii) can be taken to have been complied with if the report of the registered valuer for the initial assessment year along with a chart showing adjustments made as above are enclosed along with the return of the net wealth furnished by the assessee.

(Sd.) M.N. Dikshit,

Director (OT),

Central Board of Direct Taxes.