for failure to pay wealth tax and/or furnishing the return on or before the due date.
There are penalty provisions in case of non-payment of taxes, concealment of wealth and failure to produce evidence in support of return, when required by the wealth tax authorities.
Practically, while the provisions under I-T laws are strictly enforced by the revenue authorities and penal proceedings are initiated for non-compliance, the same is not true of wealth tax enforcement. Wealth tax enforcement has not gained much importance by the revenue authorities. Consequently, its compliance has not got the desired attention of taxpayers.
Considering rising inflation, the Direct Taxes Code (DTC) proposes to increase the threshold limit for levy of wealth tax from R30 lakh to R50 crore. Further, wealth tax rate is proposed to be slashed from 1% to 0.25%.
Though the DTC proposes to increase the ceiling limit for wealth tax, it also proposes to expand the ambit of wealth tax. The assets proposed to be covered would include both physical and financial assets and not limited to the current category of assets. While we all remain vigilant about our income tax liability, it is imperative that the same diligence is adopted for wealth tax compliance.
The writer is senior director, Deloitte in India. With inputs from Shailly Jain, manager, and Ajay Arora, assistant manager, Deloitte Haskins & Sells