The following assets are exempt from wealth-tax, as per section 5.
Property held under a trust – Any property held by an assessee under a trust or other legal obligation for any public purpose of charitable or religious nature in India is totally exempt from tax. [Section 5(i)].
Business assets held in trust, which are exempt – The following business assets held by as assessee under a trust for any public charitable/religious trust are exempt from tax – (a) where the business is carried on by a trust wholly for public religious purposes and the business consists of printing and publication of books or publication of books or the business is of a kind notified by the Central Government in this behalf in the Official Gazette (b) the business is carried on by an institution wholly for charitable purposes and the work in connection with the business is mainly carried on by the beneficiaries of the institution (c) the business is carried on by an institution, fund or trust specified in sections 10(23B) or 20(23C) of the Income-tax Act.
Any other business assets of a public charitable/religious trust is not exempt.
Coparcenary interest in a Hindu undivided family – If the assessee is a member of a Hindu undivided family, his
interest in the family property is totally exempt from tax [Section 5(ii)].
Residential building of a former ruler – The value of any one building used for the residence by a former ruler of a
princely State is totally exempt from tax [Section 5(iii)]
Former ruler’s jewellery – Jewellery in possession of a former ruler of a princely State, not being his personal
property which has been recognised as a heirloom is totally exempt from tax [Section 5(iv)]
The jewellery shall be permanently kept in India and shall not be removed outside India except for a purpose and
period approved by the Board. Reasonable steps shall be taken for keeping that jewellery substantially in its original shape. Reasonable facilities shall be allowed to any officer of the Government, or authorised by the Board, to examine the jewellery as and when necessary.
Assets belonging to the Indian repatriates – Assets (as given below) belonging to assessee who is a person of Indian origin or a citizen of India, who was ordinarily residing in a foreign country and who has returned to India with intention to permanently reside in India, is exempt. A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.
After his return to India, following shall not be chargeable to tax for seven successive assessment years –
(a) moneys brought by him into India
(b) value of asset brought by him into India
(c) moneys standing to the credit of such person in a Non-resident (External) Account in any bank in India on the date of his return to India and
(d) value of assets acquired by him out of money referred to in (a) and (c) above within one year prior to the date of his return and at any time thereafter [Section 5(v)]
One house or part of a house – In the case of an individual or a Hindu undivided family, a house or a part of house, or a plot of land not exceeding 500 sq. meters in area is exempt. A house is qualified for exemption, regardless of the fact whether the house is self-occupied or let out. In case a house is owned by more than one person, exemption is available to each co-owner of the house [Section 5(vi)]