NRI - OCI - PIO Guide & Information

146. Wealth Tax in India for NRI Q: Mr. Chand, What an excellent resource you have created! Thank you. I am a US citizen resident in the US holding an OCI card. I had inherited a flat in Pune in 1985 from my father who is an Indian citizen.He had bought it in 1983 for Rs. 15 lakhs. I had also purchased a flat in Goa in 1985 for Rs. 13 lakhs out of funds submitted from US to my NRE a/c in India . I have no other income arising in India and both properties are for personal use when i visit for 2months a year. Q.1 I wonder if the Goa flat would have exceeded the Rs 15 lakh wealth tax threshold by now? Q.2 Since I now own 2 properties am I liable for wealth tax? I understand that one property is wealth tax free and the second is liable to wealth tax if over Rs.15 lakhs. I have no other income arising in India and both properties are for personal use when I visit for 2 months a year. Q.4 My confusion arises from the fact that since balances in NRE a/c are free from wealth tax , won't the Goa property be wealth tax free since it was bought from those funds. Q.5 Also I had heard if 2 owned properties are in different states the second one does not attract wealth tax. Q.6 I understand there are provisions where an Nri who returns to India for permanent residence will not attract wealth tax liability for 7 years on assets brought back from outside and asset purchases from those fund . Seems to me that this provision should be applicable to OCI's also whether they are resident in India or not since property is being purchased from funds remitted from abroad. Again I appreciate the time and effort you take ! K.voh A. I believe as of March 31,2010 the threshold limit for wealth tax was raised from Rs. 15 lakhs to Rs. 30 lakhs. Furthermore The Indian Finance Minister, Mr. Pranab Mukherjee has proposed in the draft direct tax code to increase the threshold limit from the present Rs. 30 lakhs to Rs 50 Crore and reduce the tax rate from 1 percent to .25 percent. This bill is currently open to public debate and is expected to be introduced in parliaments winter session. If passed it will become into force from April, 2011. To the best of my knowledge for resident non- citizens, only assets situated in India will be assessed. You should consult a professional tax consultant in India for advice, a good consultant can guide you properly and help reduce your tax liability. Update: Wealth Tax in India Abolished Indian Finance Minister Mr. Arun Jaitley on February 28, 2015 while announcing Budget 2015 stated that wealth tax has been completely removed from the financial year 2015-2016 onwards.