Wealth Tax In India For NRI
As an NRI, you should have a clear idea about Wealth Tax Information for NRIs. Wealth tax information for NRI in India is not very complicated. At the same time, you should also ideally find information regarding the wealth tax exemption for NRIs in India to know whether you are eligible any exemptions under the Wealth Tax Act for NRI. We have carefully gathered for you all the relevant and latest information you will need regarding paying your wealth taxes in India and whether you are liable to pay any wealth tax in India for the current financial year. Knowing the exemptions and current limits can go a long way in making sure that you have no outstanding dues, while at the same time claiming any benefits that might accrue to you as a taxpayer in India. You should know that the wealth tax laws in India are constantly changing and the onus is on you, the taxpayer, to stay abreast of all the latest developments in the Wealth Tax Act for NRI in India.
What Is Wealth Tax In India?
Wealth tax is one of the least-known taxes in India. Wealth tax, simply put, is the tax that is levied on your wealth. This is mainly to tax the assets that do not currently generate any income. This is the primary classification. For instance, if you have one property in India that is given out on rent, you do not have to pay a wealth tax on it. If you have a second property that has not been given out on rent, then that property is liable to tax under the Wealth tax. This is why most people prefer to convert such assets into income generating assets to avoid having to pay a wealth tax on it.
Which Assets Are Likely To Be Included Under This Law?
Some of the most common assets that can come under the purview of the Wealth-tax are the jewelry you own, be it gold, diamonds or other precious metals or stones. Real estate is another area where the wealth tax applies. In addition, if you own a boat, a yacht or an aircraft over the value of INR 50,000, this is also liable to be taxed.
How Do You Value Your Wealth For Tax Purposes?
For jewelry, the current bullion rates can be used to determine the value of it. Valuation of property can be done based on the provisions of the Wealth Tax Act. For assets like cars, aircraft, boats, and yachts, the Fair Market Value (FMV) is used. You should get a registered value to prepare the value, as values prepared by you are likely to be rejected.
What Are The Wealth Tax Exemptions In Place For NRIs?
If there are any debts incurred by you for the purchase of the asset, you will be exempted from paying wealth tax for that asset. In addition, cash-in-stock used for trading purposes are also exempt from wealth tax.
How Much Will You Have To Pay?
Wealth Tax has been payable at 1% on the value exceeding INR 30 lakhs. Depending on the valuation of your assets, you will be asked to pay a wealth tax of 1%.
What Happens If You Do Not Pay Wealth Tax?
In case you do not pay wealth tax, you will be charged a penalty at a 1% interest rate per month. Further, an assessing officer from the Income Tax Department could ask you to file a “state of affairs”, which is nothing but a statement of all your assets and liabilities.
Has the Wealth Tax Been Abolished In India?
You should know that the wealth tax has, in fact, been abolished. The then Indian Finance Minister, Arun Jaitley, had announced on February 28, 2015, during the Budget announcement that the wealth tax has been abolished in India. This means that starting from the financial year 2015-16, all Indians, including NRIs, PIOs, and OCI holders have been exempt from wealth tax.
We hope this has given you a comprehensive understanding of the Wealth Tax information for NRIs. Wealth Tax information for NRIs, as we have explained above is very simple and not at all complicated. You now have a clear idea of the Wealth Tax Exemptions for NRIs in India and have an idea about the latest changes to the Wealth Tax Act for NRI in India. You should also remember that Wealth Tax has recently been abolished in India and there is no longer any need for NRIs to pay a wealth tax in India.