Who is Liable to File Wealth Tax Return?

As the name implies, wealth tax applies to individuals who earn high-incomes or have a high-net-worth. Introduced in 1957, it helps in the fair distribution of taxes, taking into consideration the financial status of taxpayers.However, it was eradicated in the Union Budget of 2015, as the cost of recovering it was more than the benefits from it. Another reason to eliminate it is to simplify the tax structure. In place of Wealth Tax , the Finance Act of 2015, increased the surcharge to an additional 2% for the super-rich members of the society.

• The increased surcharge applies to individuals, Hindu undivided families , and companies.
• As per the income tax department, individuals with an annual income of Rs. 1 crore and more, and companies with a yearly income of Rs. 50 lakhs and more are required to pay an additional surcharge on top of their regular taxes.
• However, note that this applies only to resident Indians.
• Resident Indians have to pay this surcharge, not only for assets they own in India but also for their global assets.
• Eligible NRIs have to pay a surcharge for the assets they own in the country.

• If a minor holds an asset, the value of the assets is included along with the net worth of his/her parents.
• However, if the minor is differently abled and has a condition mentioned under Section 80U of the ITA, the assets need not be clubbed with the assets of the parent.
• If the assets were created by the child – due to his/her specific talent, skill, or knowledge, then the assets have to be valued separately and not clubbed with the parent.

Here’s is the surcharge rates of Budget 2020 which remains same as the previous year.

• For individuals with annual income between Rs. Fifty lakhs and Rs. 1 crore, the surcharge rate has not been altered. It remains the same as FY 2018-19 at 10%.
• The surcharge rates for individuals with annual income above Rs. 1 remain unchanged at 15%.

It always pays to stay aware of the latest revisions made to income tax rules. Thereby, you can pay your taxes on time and accurately, without facing any legal troubles down the line.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.