How should NRIs file Wealth Tax Returns?

The due date for filing wealth tax returns is the same as for filing income tax returns, that is, 31st July. But sadly NRIs don’t have the facility it file it online as there is no such facility. However, the return can be signed by the power of attorney holder in India. The penalty for filing wealth tax returns is 1 percent per month from the due date.

Presently the Wealth Tax provisions are fairly loosely administered. However, the upcoming Direct Tax Code (DTC) appears to be far more aggressive on the Wealth Tax front. Chaudhary says, “The Direct Taxes Code ('DTC') Bill, 2010, proposes many changes both favorable 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:

- Archaeological collections, drawings, paintings, sculptures or any other work of art;

- Watches with a value in excess of 50,000;

- Bank deposits outside India;

- Any interest in a foreign trust or any other body located outside India (whether incorporated or not) other than a foreign company;

- Any equity or preference shares held by a resident a Controlled Foreign Company;

- Cash in hand in excess of 2 lakh (as against existing limit of 50,000)

DTC also proposes to retain the existing the rate for charging wealth tax at 1 percent while increasing the non-taxable threshold of net wealth to 1 crore as against the existing limit of 30 lakh”. However, the date for DTC is not yet finalized.