Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Personal-finance/  One-minute guide to understanding
BackBack

One-minute guide to understanding

One-minute guide to understanding

Premium

WEALTH TAX

WHO AM I?

I am a tax levied on the net wealth an individual holds. Wealth usually includes luxury items and assets that cannot give you a stream of income but you may possess them out of passion. Therefore, assets such as shares, debentures, mutual funds are all exempt from me as they are productive and give you income.

WHAT AM I IMPOSED ON?

• Any immovable asset such as land, farmhouse, guesthouse, commercial or residential complex, if it falls within the specified limits. If the house has been leased out for at least 300 days in a year, then it is not taxed.

• Jewellery made of any precious stones and metals.

• Aircraft, yachts and boats not used for commercial purposes.

• Cash in hand that is at least 50,000 as on 31 March.

• Deemed assets, which are those you may have passed on or gifted to your spouse, children or grandchildren.

Residential buildings, palaces and jewellery of former rulers are exempt form wealth tax as these are considered national asset.

WHO PAYS IT?

If you are an Indian resident as well as citizen, you will have to bear the wealth tax on any property you hold in India or abroad.

If you are an Indian citizen but not a resident Indian then any property you own within the country will come under my purview.

If you are a foreign citizen but a resident of India, then any property you own in India will have to pay me.

If the owner of a property dies, then the legal heir bears me.

AM I VALUED?

I am charged at 1% of the amount by which the net wealth exceeds 30 lakh. This means the first 30 lakh is exempt. Since the tax is levied only on unproductive assets, the value of the assets is reduced by the amount of any unpaid debt taken specifically to acquire it. For instance, if you have jewellery worth 70 lakh and if you have an unpaid loan of 20 lakh taken to acquire it, then the jewellery will be valued at 50 lakh. Of the 50 lakh, 30 lakh is not taxable. Therefore, you will pay me on only 20 lakh.

WHEN AND WHERE YOU FILE ME?

If you have any assets that fall in the above mentioned category, then their market value on the validation date, 31 March, is to be estimated and paid up before the due date. The process of filing wealth tax returns is similar to that of filing income-tax returns. Individual and Hindu Undivided Families are required to fill form A and attach with it supporting documents, if necessary. It is advisable to keep valuation documents with you.

—Harshada Karnik

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 19 Dec 2010, 08:36 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App