28 January 2015
levied on the specified unproductive assets in your assets/investment portfolio. Unproductive assets mean those assets which don’t generate any income (taxable or non-taxable). Like Jewellery, Land, Second house property which is not let out etc. If you are Indian national and resident as per tax laws, you will have to pay tax on your global assets too.
Every individual and HUF has to pay wealth tax @1% if the wealth exceeds Rs 30 lakh and file wealth tax return by 31st July immediately following the end of financial year. However date of filing return may vary in cases where the accounts are required to be audited. Also keep in mind that this tax is on per year basis.
Basically wealth has been divided in 6 types – House, Motor cars, Jewelry, Air/Water vehicles and Land and even cash in excess of Rs 50,000/- . As I mentioned above that this tax is on unproductive assets. So if you have cash of Rs 2 lakh in hand and is not generating any return (taxable or non taxable) then this will be treated as your wealth and falls in the purview of wealth tax. All mutual funds, Fixed deposits, Exchange traded funds, Insurance policies etc. does not fall under wealth tax act. But,
if you have second house which is not let out for 300 or more days then the value of that house becomes a part of your wealth, If you have farm house situated within 25 km of municipality limits then also it becomes your wealth, Motor cars if not being used for business purpose is a part of your wealth Jewelry includes jewelry, bullion, furniture, utensils, or any other article made up of gold, silver, platinum or any other precious metal, unless it is being used for business purpose and is a part of stock in trade. It does not include gold deposit bonds issued under gold deposit scheme. Yachts, Boats, Aircrafts if not being used for business purpose Urban land unless construction on that land is not permissible by law, or is held by assesse for industrial purposes for a period of 2 years from the date of acquisition
Valuation of Assets and Computation of wealth tax in India
Valuation date for Assets comes under wealth tax purview is the last day of previous year i.e 31st March. Here’s how you can compute your wealth tax: Details Amount A Value of Assets belonged to Assesse ( including those given to family members without adequate consideration) - B Assets exempted under Wealth tax act - C Gross wealth (A-B) - D Debts/Loans belonged to Assets under Gross Wealth - E Net Wealth (C-D) - F Exemption Limit 30 lakh Wealth Chargeable to Tax @ 1% (E-F)
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