1434. Requirement of obtaining report of registered valuer for value of jewellery exceeding Rs. 5 lakhs
Circular No. 646 was issued by the Central Board of Direct Taxes on 15 March 1993. Its subject is 1434. Requirement of obtaining report of registered valuer for value of jewellery exceeding Rs. 5 lakhs.
Lets one registered valuer's report on jewellery serve for five years. Under the Wealth-tax Act, value is determined under Schedule III, jewellery under rules 18 and 19 of Part G, and where the value of jewellery exceeds Rs. 5 lakhs the assessee must obtain a registered valuer's report in the prescribed form and file it with the return of net wealth. The Board decides that a report obtained for one assessment year may be used for the next four, subject to two adjustments: the value of any gold, silver or alloy containing them is to be substituted by its value on the valuation date of the later year, and the value is to be reduced or increased for jewellery sold or otherwise disposed of, or acquired, on or before that valuation date. In those four later years rule 18(2)(ii) is taken to be complied with if the original report and a chart showing the adjustments are enclosed with the return.
It was represented that obtaining a registered valuer's report every year where jewellery exceeds Rs. 5 lakhs caused uncalled for hardship.
1434. Requirement of obtaining report of registered valuer for value of jewellery exceeding Rs. 5 lakhs
1. Under the Wealth-tax Act, 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 assessees 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 rupees five 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.
Circular : No. 646, dated 15-3-1993.
In a wealth-tax return enclosing an earlier year's valuation report, and in an assessment questioning the jewellery value returned.
An assessee obtains a valuer's report showing jewellery worth Rs. 8 lakhs for assessment year 1993-94, of which Rs. 3 lakhs is gold content. For assessment year 1994-95 he may use the same report, substituting the gold value as on the later valuation date, and if he sold a piece valued at Rs. 1 lakh in the report he reduces the figure by that amount, enclosing the report and a chart of the adjustments with his return.
Rules it names. Rule 18 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
Source: the Income Tax Department’s own published text — its page for this instrument.