How Should NRIs File Wealth Tax Returns?

The set due date for filing returns for wealth tax is July 31. As a stroke of bad luck, NRIs cannot fill out returns for their wealth tax online. The only advantage for NRIs is that a person in India having the power of attorney on behalf of the NRI can sign the tax return. If the return is not filled out on time, NRIs will have to pay a penalty of 1percent for each month from the due date.

The present wealth tax obligations are not very rigid. However, Direct Tax Code is more stringent about the rules. Chaudhary quotes, "The Direct Taxes Code (DTC) Bill, 2010, proposes many changes both favourable as well as adverse for NRIs. DTC proposes to expand the definition of specified assets. While the existing assets have been retained, additional assets covered for individuals are as under” -

- works of art, sculptures, paintings, drawings, archaeological collections and the like.

- watches whose value exceeds 50,000.

- bank deposits which are located outside India.  

- interest garnered from a foreign trust or any related body located outside India (incorporated or otherwise) but not a foreign firm.

- preference or equity stocks held by residents of a Controlled Foreign Company.

- cash in hand exceeding 2 lakh.