Amendment status not verified — confirm the current text below against the official source.
Valuation of life interest.—(1) For the purposes of sub-section (1) of section 7, the value of the life interest of an assessee shall be arrived at by multiplying the average annual income that accrued to the assessee from the life interest by the fraction 1 minus 1, where ‘P’ represents the annual premium p + d for a whole life insurance without profits on the life of the life tenant for unit sum assured as specified in the Appendix to these rules, and ‘d’ is equal to i “i” being the rate of interest. 1+i Explanation.—In this rule,— (a) “life tenant” means a person for the duration of whose life the life interest is to subsist; (b) “average annual income” means the average of the gross income derived by the assessee from the life interest during each year of the period ending on the valuation date, reduced by the average of the expenses incurred on the collection of such income in each of those years: Provided that the amount of the reduction for such expenses shall, in no case, exceed five per cent of the average of the annual gross income: Provided further that in case the income so derived is for a period exceeding three years, only that income derived during the three years ending on the valuation date shall be taken into account; (c) the rate of interest shall be 6½ per cent. per annum. (2) Notwithstanding anything contained in sub-rule (1),— (a) the Assessing Officer may, if he is of the opinion that in the case of the life tenant, a life insurance company would not take the risk of insuring his life at the normal premium rates in force but would demand a higher premium, vary the valuation suitably; (b) the value of the life interest so determined shall, in no case, exceed the value as on the valuation date as determined under this Schedule, of the corpus of the trust from which the life interest is derived. PART G JEWELLERY 1[18. Valuation of jewellery.—(1) The value of the jewellery shall be estimated to be the price which it would fetch if sold in the open market on the valuation date (hereafter in this rule referred to as fair market value). (2) The return of net wealth furnished by the assessee shall be supported by,— (i) a statement in the prescribed form, where the value of the jewellery on the valuation date does not exceed rupees five lakhs; (ii) a report of a registered valuer in the prescribed form, where the value of the jewellery on the valuation date exceeds rupees five lakhs. (3) Notwithstanding anything mentioned in sub-rule (2), the Assessing Officer may, if he is of opinion, that the value of the jewellery declared in the return,— (a) is less than its fair market value by such percentage or such amount as is prescribed under sub-clause (i) of clause (b) of sub-section (1) of section 16A;