Other Personal Taxes in India
Details of the other taxes that apply to personal wealth and property in India…
Individuals who have a net wealth of more than Rs3m (30 lakhs) are liable to pay a wealth tax of 1 percent. This excludes assets such as jewellery, or any property held by the individual under a trust or other legal obligation for charitable purposes.
- To download a copy of the wealth tax return form: Click here
- For more information, refer to the Wealth Tax Act on the Income Tax India website: Click here
Any income accrued through interest made on bank deposits, loans and so on is liable to income tax. The bank usually deducts the tax automatically. The rate will vary between 10 percent and 30 percent, depending on a person’s total income. At the end of the fiscal year, the bank will issue form 16, which lists the total deductions made. This should be submitted with a tax return. For more information: Click here
Under the Gift Tax Act, all gifts in excess of Rs25,000 are taxable. There are certain exceptions. For example, if the gift is from a blood relative or if it is immovable property located outside the country, tax is not payable.
There is no inheritance tax in India. The Income Tax Act refers to “gifts received through a will or by inheritance or in contemplation of death of the payer” and states that they are not subject to taxation.
Capital Gains Tax
Individuals who are non-residents are liable to pay tax on all income received or accrued in India.
If assets are held for more than three years prior to transfer, they are considered long-term assets. If their transfer results in long-term capital gain, the tax rate is 20 percent.
The only exception to this rule is with regard to securities, for which the period of holding prior to transfer is 12 months. In this case, it is considered a long-term capital asset and no tax is payable, provided that the securities transaction tax has been paid.
Any transfer of assets held for less than this period would be considered to be a short-term capital gain. This would be taxed at normal rates with regard to all assets, except securities, for which the tax rate is 10 percent. A securities transaction tax is also payable.
- The Income Tax India website provides more information: Click here
Any statements concerning taxation are based upon our understanding of current taxation laws and practices in India which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.