Wealth tax in case of gift from nri to indian resident?
Querist : Anonymous
Querist : Anonymous
what if net wealth of Indian resident is above Rs. 1 Crore?
Here’s the clarification on wealth tax in case of gift from NRI to Indian resident:
Wealth Tax is levied on the net wealth owned by an individual or entity as on the valuation date (usually 31st March).
The receipt of gift (e.g., Rs. 10 lakhs by cheque from NRI) itself is not a taxable asset under Wealth Tax Act because:
Wealth Tax applies on specified assets (like land, building, jewellery, vehicles, etc.) owned by the resident.
Cash or bank balance (like a cheque amount received) is not chargeable under Wealth Tax as per Section 2(ea) of the Wealth Tax Act.
However, if the Indian resident's total net wealth (including assets other than the gift amount) exceeds the exemption limit (e.g., Rs. 1 crore), then Wealth Tax is applicable on the net wealth — but the gift amount received as cash/cheque itself will not be included as a taxable asset for wealth tax.
Summary:
Scenario Wealth Tax Implication
Gift received from NRI as cheque (cash asset) Not taxable under wealth tax (cash/bank balance exempt)
Net wealth of Indian resident above exemption limit Wealth tax applicable on net wealth excluding cash gift
If the gift is in the form of assets like jewellery, property, shares, then those assets will be included in net wealth and wealth tax may apply if total exceeds limit.
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