Original Thread: Wealth Tax for properties in India
From: vs007 (Original Message) --------------------------------------------------------------------------------------------------- Sent: 4/17/2005 1:47 AM
Wealth tax(for property,jewellery,car) is payable to Indian Govt @ 1% of the amount by which the net wealth exceeds 15 Lakhs. One house or a plot less than 500 Sq metres is exempted.
1. I have more than one plot and worth more than 15L. Want to know if any other member is in the same boat and have filed this wealth tax.
2. How is the market value of plot determined as it fluctuates like hell.
MT: Wealth Tax in India
MT: Wealth Tax in India
From: pachchuSent: 4/19/2005 1:13 AM
u might wanna check wtih ur CA but here's what I remember faintly from my discussion with CA several months back and from my readings:
it is not applicable to commercial properties, only if u have multiple residential properties in your own name.
it is not applicable if u have properties in multiple family members name, say one in your name, one in wife's name, one in each of the kids name, one in parents name, etc.
any property purchased within 1 yr of returning to India using foreign-ex has wealth tax exemption for 7 yrs.
hope this helps
u might wanna check wtih ur CA but here's what I remember faintly from my discussion with CA several months back and from my readings:
it is not applicable to commercial properties, only if u have multiple residential properties in your own name.
it is not applicable if u have properties in multiple family members name, say one in your name, one in wife's name, one in each of the kids name, one in parents name, etc.
any property purchased within 1 yr of returning to India using foreign-ex has wealth tax exemption for 7 yrs.
hope this helps
MT: Wealth Tax in India
From: 
sohu9Sent: 4/19/2005 8:14 AM
it is not applicable if u have properties in multiple family members name, say one in your name, one in wife's name, one in each of the kids name, one in parents name, etc.
I thought that in the above case, wealth of the individuals will be clubbed together. I'm not sure but may be someone can give a definitive answer.
sohu9Sent: 4/19/2005 8:14 AM it is not applicable if u have properties in multiple family members name, say one in your name, one in wife's name, one in each of the kids name, one in parents name, etc.
I thought that in the above case, wealth of the individuals will be clubbed together. I'm not sure but may be someone can give a definitive answer.
MT: Wealth Tax in India
From: RAJESHSent: 4/22/2005 1:56 PM
Dear Vs007,
1. The exemption is available for one house and also for an additional plot admeasuring less than 500 sq.mtrs.
2. For determining the market value, the best alternative is to adopt the valuation specified under the Stamp Duty Regulations.
.02 Alternatively, valuation report from certified Engineer can also be adopted.
.03 In any case, if the valuation as per Stamp Duty Regulations is higher, then the same should be adopted.
3. And as Pachchu haas informed in case of NRIs returning for settlement , the value of assets bought from abroad or assets acquired 1 year before or any time thereafter out of NRE/FCNR accounts or out of forex remittance from abroad are exempt for a period of 7 years from the date of return.
Dear Sohu,
1. In India husband and wife are separate and distinct tax entities and as such are sepparately taxed.
2. If the wife has personal property purchased out of her personal income or say acquired by way of inheritance , i.e. if the funds are not transferred by husband to wife , both are eligible for ,basic limit of INR 1.5 mn and exemption of a house property each.
Best wishes.
RAJESH H DHRUVA
Dear Vs007,
1. The exemption is available for one house and also for an additional plot admeasuring less than 500 sq.mtrs.
2. For determining the market value, the best alternative is to adopt the valuation specified under the Stamp Duty Regulations.
.02 Alternatively, valuation report from certified Engineer can also be adopted.
.03 In any case, if the valuation as per Stamp Duty Regulations is higher, then the same should be adopted.
3. And as Pachchu haas informed in case of NRIs returning for settlement , the value of assets bought from abroad or assets acquired 1 year before or any time thereafter out of NRE/FCNR accounts or out of forex remittance from abroad are exempt for a period of 7 years from the date of return.
Dear Sohu,
1. In India husband and wife are separate and distinct tax entities and as such are sepparately taxed.
2. If the wife has personal property purchased out of her personal income or say acquired by way of inheritance , i.e. if the funds are not transferred by husband to wife , both are eligible for ,basic limit of INR 1.5 mn and exemption of a house property each.
Best wishes.
RAJESH H DHRUVA
MT: Wealth Tax in India
From: vs007Sent: 4/22/2005 2:45 PM
Thanks Rajesh for your post.
In BLore, we also have to property tax 1% to the municipality. Can all these exemptions applicable to that or there are two different property taxes in India - one to the city and other to central Govt.
Thanks Rajesh for your post.
In BLore, we also have to property tax 1% to the municipality. Can all these exemptions applicable to that or there are two different property taxes in India - one to the city and other to central Govt.
MT: Wealth Tax in India
From: sohu9Sent: 4/22/2005 4:08 PM
Rajesh,
Thanks again. One more question:
How is commercial property treated when calculating wealth tax. For e.g., if one person has commercial land (just a plot - no construction) and commercial office complex and/or commercial shop.
How are these commercial plot and shop/commercial complex calculated for wealth tax.
sohu
sohu9Sent: 4/22/2005 4:08 PMRajesh,
Thanks again. One more question:
How is commercial property treated when calculating wealth tax. For e.g., if one person has commercial land (just a plot - no construction) and commercial office complex and/or commercial shop.
How are these commercial plot and shop/commercial complex calculated for wealth tax.
sohu
MT: Wealth Tax in India
From: psp7492Sent: 4/25/2005 2:51 AM
How does one decide which is the first house and which is the second? Is it based on the date of aquisition?
PSP
psp7492Sent: 4/25/2005 2:51 AMHow does one decide which is the first house and which is the second? Is it based on the date of aquisition?
PSP
MT: Wealth Tax in India
From: pachchuSent: 4/25/2005 4:21 AM
sohu9
I don't think commercial properties come under the wealth tax net. Rajesh can verify that. You should be paying commercial property tax rates on that already which double the residential property tax rates.
the clubbing rule applies whenever those properties are bought/sold. for eg, if you bought a property from your income, registered it in your wife's name, then sold it, the capital gains on that property will be clubbed with your income on the year of the sale.
IMO, the clubbing doesn't apply for wealth tax, however you may wish to check with Rajesh or your CA.
sohu9
I don't think commercial properties come under the wealth tax net. Rajesh can verify that. You should be paying commercial property tax rates on that already which double the residential property tax rates.
the clubbing rule applies whenever those properties are bought/sold. for eg, if you bought a property from your income, registered it in your wife's name, then sold it, the capital gains on that property will be clubbed with your income on the year of the sale.
IMO, the clubbing doesn't apply for wealth tax, however you may wish to check with Rajesh or your CA.