17/07/2010
Wealth must be taxed more
The Revised Discussion Paper (RDP) on the Direct Taxes Code (DTC) justifies the extension of wealth taxation on the following grounds: “Firstly, the holders of substantial economic resources have the capacity to pay higher taxes than those with similar incomes but with less wealth. Secondly, it adds to the overall progressivity of an income tax without having to increase marginal rates. Thirdly, a wealth tax base separate from an income tax base helps to partially capture the income tax avoided or evaded.
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17/06/2010
New draft of Tax Code seeks to levy wealth tax on firms' ‘unproductive assets'
The Centre is looking to drop a proposal to bring financial assets within the scope of the wealth tax net. The revised discussion paper on the Direct Taxes Code has now mooted a regime change to the one proposed in the earlier discussion paper, subjecting all companies (both listed and unlisted) to wealth tax on their “unproductive assets”. The first discussion paper unveiled in August 2009 had proposed that wealth tax be made payable only by an individual, Hindu Undivided Family, and private discretionary trusts. This meant that companies would not be subjected to wealth tax. It was also suggested that net wealth of an individual or Hindu Undivided Family in excess of Rs 50 crore will be chargeable to wealth tax at the rate of 0.25 per cent. Assets chargeable to wealth tax would include financial assets, the discussion paper had said.
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07/11/2009
Voluntary taxation of wealth
Some rich Germans have petitioned the newly re-elected government of Chancellor Angela Merkel to resume the levy of wealth tax to help Germany bounce back from the economic crisis. The text, posted on www.appell-vermoegensabgabe.de ., has been signed by some 40 wealthy Germans . For retired doctor Dieter Kelmukuhl, 66, it is time the wealthy came to the aid of their country. He reckons that if the 2.2 million Germans, who have personal fortunes of more than $750,000, paid a tax of 5 per cent this year and next
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29/08/2009
Valuing financial assets in wealth tax regime
Since 1993, the wealth tax legislation in the country has been in a dormant state, taxing only non-productive assets and generating meagre tax revenues. The revised estimate for this tax for 2009-10 is a mere Rs 425 crore. It is, therefore, quite refreshing to find that in the Direct Taxes Code it is proposed to re-energise this legislation. The reasons given in the Discussion Paper with the Code (Chapter XVII page A-48) read thus: “The case for levy of wealth tax is based on several arguments. Firstly, the holders of substantial economic resources have the capacity to pay higher taxes than those with similar incomes but with less wealth.“Secondly, it adds to the overall progressivity of an income-tax without having to increase marginal rates.
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10/04/2009
Say goodbye to storage cost, wealth tax on gold
With high volatility in the stock market, investors are looking for other options like debt and gold. However, when it comes to gold, most investors find it a difficult proposition because of the storage cost and wealth tax it entails. While the storage cost could be anywhere between Rs 500 and Rs 20,000 per year, depending on the institution, wealth tax would be 1 per cent of the gold value exceeding Rs 15 lakh. But now you can not only save these costs, but also earn interest on the gold you own. State Bank of India (SBI), the country’s largest bank, has launched a gold deposit scheme to address this issue.
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12/04/2008
Deductibility of debt for wealth tax
The Wealth Tax Act 1957, amended over a period of time, has more or less outlived its utility and purpose. Today, it is applicable in respect of a few specified assets such as guesthouse, motorcars, jewellery and urban land. With a threshold limit of 15 lakh and 1 per cent levy in respect of net wealth over and above that limit, the quantum of wealth tax paid in relation to corporate and personal income taxes is fairly insignificant.
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Wealth Tax Act
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Wealth Tax Rules
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Wealth Tax
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