Foreign Bank Deposits Likely To Come Under Wealth Tax: Budget 2012

On 21st February, The Finance Ministry, decided to include foreign bank deposits under taxable assets in wealth tax, in the coming budget 2012-13. The proposal is to expand the ambit of wealth tax, and there are some proposals likely to be incorporated in the coming budget, which are awaiting approval from Direct tax Code (DTC).

The Finance Ministry, said that this is one of the new measures as part of the government’s drive to unearth black money. The other assets which are likely to be included in wealth tax are – paintings, sculptures, expensive watches exceeding Rs.50,000, cars, helicopters, aircraft, yacht, jewellery, archaeological collections and cash in excess of Rs. 2 lakh would also attract Wealth Tax. Also, properties including urban land and farm houses located within 25 kilometres of any municipal or Cantonment Board will be included.

Moreover, DTC has made it clear that wealth tax will not be levied on assets like residential houses, commercial premises and such immovable properties as are rented out for a minimum of 300 days in a financial year. The Wealth Tax, will be levied at one per cent on taxable assets (specified under Wealth Tax Act) exceeding Rs.1 crore from the current limit of Rs.30 lakh.