Wealth tax came into existence on 1st April 1957. Wealth tax is derived from the property owned by the proprietor. The proprietor needs to pay tax every year on property owned by them. The residential property that does not yield any income to its owner is also subjected to wealth tax.Wealth tax is termed as most significant direct tax.
As per the wealth tax act, wealth tax is applicable to the following:
- An individual person
- A group of people who own a property
- A company or organization
- A Hindu undivided family (HUF)
- Person belongs to 1-by -6 categories
- A representative or heir of a dead person
- Non corporative tax payer
The chargeability of a wealth tax in India for its residence or foreign citizens are different. Any person who is resident of India has to pay wealth tax under his/her name. If owner of property is deceased, heir of the property is bound to pay the wealth tax of the property.
If a person owns a citizenship of a foreign country and he/she acquires a property in India as well as in foreign country. Under those circumstances the property owned by the owner in India is taxable where as property located outside India is exempted from the list. All assets and debts outside India are out of the scope of Wealth Tax Act.