The government on Monday doubled the threshold for calling a person or entity wealthy, saying the wealth tax would be imposed only on those having a net wealth exceeding Rs 30 lakhs (Rs 3 million).
Under the existing provisions, wealth tax is charged on 'every individual, Hindu undivided family and company at the rate of one per cent' of the amount by which their net wealth exceeds Rs 15 lakhs (Rs 1.5 million).
However, finance minister Pranab Mukherjee on Monday proposed to amend the relevant section of the Wealth Tax Act. Pursuant to this, for every year commencing on and from April 1, 2010, the one per cent wealth tax will be charged on the amount by which the net wealth exceeds Rs 30 lakhs (Rs 3 million).
Besides, the finance minister has also proposed to amend certain provisions related to agreement for avoidance of double taxation with respect to wealth tax.
Currently, the central government has been conferred with powers to enter into an agreement with the government of any reciprocating country outside India for grant of relief in respect of the wealth tax laws in India and the other nation.
As per the proposed amendment, India can also enter into such agreements with governments of any territory outside India, which may be notified by the central government. This particular amendement would take effect from October 1, 2009.