Wealth Tax, also known as the Wealth Tax Act, 1957, is applicable for all citizens of India. This is counted among the most significant direct taxes, generally paid on the property ownership benefits.
The Wealth Tax was incorporated from the 1st April in the year 1957. It should be remembered that the Wealth Tax is to be paid every year till the owner retains the property, depending on the market value of it. There might be such cases when the respective property is no longer yielding any income, but still the Wealth Tax should be paid accordingly.
Payment Procedures of the Wealth Tax in India:
The person paying the Wealth Tax under the clauses of the Wealth - Tax Act, 1957, is known as the Assessee. The Assessee can belong to any of the either category like -
- A company
- A Hindu Undivided Family
- An Association of Persons or a Body of Individuals
- Non-corporative taxpayers
- Persons belonging in the 1-by-6 categories
- The legal representative, the executor or administrator of a dead person
- An agent of a non-resident
Regarding the payment procedure of the Wealth Tax in India, for a Hindu Undivided Family the tax is considered on the income derived from joint family collections. On the other hand, for the Non-corporative taxpayers, whose accounts are to be audited statutorily, are liable to pay the Wealth Tax. At present the rate of the Wealth Tax in India is 1% of the amount by which the net wealth of the assessee exceeds Rs. 15,00,000. While regarding the case of partnership firms and association of persons the wealth of the firm is allocated to individual partners or members in an equitable manner.
Chargeability to Wealth Tax in India:
The residential status of the assessee is one of the main characteristic factors for the person paying the Wealth Tax in India. According to the Act the residential status of the assessee and the residential status of the same required for payment of the Income Tax should remain similar.
Another important factor on which the Chargeability to Wealth Tax in India is dependable is the citizenship status of the assessee. There are different provisions for the citizens and the non-citizens of India. For the citizens of India, the assessee should have legal residence in the Indian territories, either of that person's parents must have be Indian born, the assessee cannot remain an Indian citizen if that person acquires the citizenship of a foreign nation by choice. Under such conditions, the assets and debts of the assessee located in India are chargeable to Wealth Tax. However, for the non-citizens of India, all the assets and debts of the assessee located in India are taxable and the value of all those located outside India are exempt.
Wealth Tax Chargeable Assets:
There are certain specified assets in India, on which the assessee has to pay wealth tax in India. Some of them are movable while others are immovable possessions. The list includes -
- Dwellings like any guesthouse, residential house, urban farmhouse, and commercial property
- Personal automobile
- Valuable items like jewelry, bullion, furniture, utensils or any other item made of gold, silver, platinum or any other precious metal
- Yachts, boats, and aircrafts used for non-business purposes
- Urban land under the jurisdiction of municipality or cantonment board with a population of 10,000 and more
- Cash in hand more than Rs. 50000, for individuals and Hindu Undivided Families and other than these for cash amount that is not recorded in the account books
Nevertheless, there are also non - chargeable Assets Of Wealth Tax In India like personal belongings ranging from apparels, furniture, electronic items, and so forth, residential dwellings used exclusively for residential purposes, allotted by a company to an employee, having a gross annual salary of less than five lakh rupees, and Yachts and aircrafts used by the assessee exclusively for business purposes.
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