Wealth Tax

Wealth tax is a tax imposed on the net wealth of an individual, Hindu Undivided Family (HUF), or company. It is calculated based on the value of certain assets owned on the valuation date, after deducting debts related to those assets. In India, wealth tax was previously governed by the Wealth Tax Act, 1957, but it was abolished in 2015–16. Before its abolition, wealth tax applied to assets such as:

• Residential houses (beyond specified limits)
• Cars
• Jewelry
• Yachts
• aircraft and
• luxury items
• Urban land Cash exceeding prescribed limits.

The purpose of wealth tax was to ensure the equitable distribution of wealth and discourage the concentration of high-value assets.

Key Points: Wealth tax was paid annually on net wealth above the prescribed threshold. The tax was generally levied at 1% of the amount exceeding the limit. It has been replaced by higher surcharge on high-income individuals after 2015.