Wealth tax in India — abolished, and what replaced it

India does not levy a wealth tax on either residents or NRIs.

The Wealth Tax Act, 1957 was repealed by the Finance Act 2015 with effect from assessment year 2016-17. Since then, there has been no tax on the mere ownership of wealth in India. The Income-tax Act, 2025, which came into force on 1 April 2026 and replaced the Income-tax Act, 1961, also does not reintroduce a wealth tax. Periodic political proposals to bring it back — often under labels like "super-rich tax" or "inheritance tax" — surface around every budget cycle and have so far not been enacted.

For an NRI landing on this page, the short answer is: there is no wealth tax to plan around. The older material on this page, describing a ₹30 lakh threshold, a 1% rate, and exemptions for productive assets and one house, is no longer operative law — it described the position before 2015.

What does remain, and what an NRI should understand instead, is described below.

Why wealth tax was abolished

The old Wealth Tax Act was a low-yield, high-administration tax. Collections peaked at around ₹1,000 crore a year across the whole country — trivial against direct-tax collections of several lakh crore — while the assessment and litigation burden was disproportionate. Multiple reforms had tried to improve the mechanics (excluding productive assets, exempting one house, raising the threshold) without meaningfully improving collections.

Budget 2015 scrapped the Act outright and replaced it with:

A 2% additional surcharge on income-tax for individuals with taxable income above ₹1 crore.

That surcharge has since grown into a full progressive structure, described below. The political framing at the time was that "the super-rich pay more; everyone else is freed from compliance" — and the underlying idea (tax the income from wealth, not the wealth itself) has stuck across subsequent governments.

What actually taxes the rich now — the surcharge

The current surcharge on individual income-tax under the Income-tax Act, 2025 (retained from the later amendments to the old Act) is:

Taxable income	Surcharge rate
Up to ₹50 lakh	Nil
₹50 lakh – ₹1 crore	10%
₹1 crore – ₹2 crore	15%
₹2 crore – ₹5 crore	25%
Above ₹5 crore	37% (old regime) / 25% cap (new regime, including under the Income-tax Act 2025)

Further specifics that matter:

Capital gains on listed securities and on dividend income carry a surcharge cap of 15% regardless of total income.
Long-term capital gains on immovable property — the post-Budget-2024 12.5% regime — carry a surcharge cap of 15% as well.
The surcharge is applied to the tax, not the income, then cess of 4% runs on the sum of tax and surcharge.
Marginal-relief rules prevent the marginal-rate cliff at each surcharge threshold.

For an NRI earning large Indian-source income — rental on multiple Indian properties, substantial capital gains, large dividend flows from Indian companies — this surcharge is the practical analogue of a wealth tax. It targets people with significant Indian-asset portfolios without asking them to list the assets and value them every year.

Disclosure obligations — Schedule AL

The replacement for wealth-tax filing is Schedule AL (Assets and Liabilities) in the income-tax return. It requires reporting of assets and liabilities on 31 March — not because they are taxed, but for transparency.

Applies to individual and HUF taxpayers with total income above ₹50 lakh in the relevant year.
Captures: immovable property, jewellery, archaeological collections, vehicles, yachts, aircraft, financial assets (deposits, shares, mutual funds, insurance policies), cash in hand, and liabilities attributable to each asset.
Does not itself create a tax — it is a disclosure and a data-match against tax returns (e.g., rental income declared against the number of properties reported).

NRIs filing an Indian tax return above the ₹50 lakh threshold also fill Schedule AL, but only for Indian assets. Foreign assets do not go into Schedule AL — there is a separate Schedule for those (below), and it applies only to residents.

What about foreign assets? Schedule FA

Schedule FA (Foreign Assets) is relevant to resident and ordinarily resident (ROR) taxpayers — not NRIs. It requires disclosure of:

Foreign bank accounts (with peak balances).
Foreign financial interests (shares, mutual funds held abroad).
Foreign immovable property.
Foreign trusts and custodial accounts.
Any other capital asset held outside India.

The filing obligation sits alongside the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 which levies 30% tax + 90% penalty + potential prosecution on undisclosed foreign assets of residents.

For an NRI, Schedule FA is not applicable during NRI years. It becomes relevant the year the NRI returns and becomes an ROR. Our returning-NRI tax planning article covers this transition.

Estate tax and inheritance tax — also not applicable

India does not levy estate duty or inheritance tax either.

The Estate Duty Act, 1953 was abolished in 1985.
No successor legislation has been enacted.
Proposals to reintroduce an inheritance tax have surfaced in political commentary (2019, 2024) but none have been legislated.

When a resident or NRI passes away holding Indian assets:

There is no tax on the estate itself at the time of inheritance.
The heir inherits the cost basis and holding period of the deceased (critical for later capital gains on a sale).
No income tax on the inheritance event; income tax applies only on income generated by the inherited asset after it passes to the heir.

Gift tax — abolished, but gifts are income

The Gift Tax Act, 1958 was repealed in 1998. But to prevent circumvention of income tax by re-labelling income as "gift", gifts are now taxed as income from other sources under Section 56(2)(x) of the Income-tax Act:

Gifts (cash or property) received by an individual or HUF from non-relatives, aggregating more than ₹50,000 in a year, are fully taxable as income in the recipient's hands.
Gifts from specified relatives (parents, siblings, spouse, children, lineal ascendants/descendants of self or spouse) are fully exempt, with no cap.
Gifts at marriage, under a will or inheritance, or received in contemplation of death are exempt.

An NRI receiving gifts of Indian assets from specified resident relatives pays no tax on receipt. A gift from a non-relative resident to an NRI, above ₹50,000, is taxable in the NRI's Indian income. See the gift tax article for the details.

NRIs with Indian property — what taxes you actually pay

Put together, the tax reality for an NRI holding significant Indian assets in 2026:

No tax on ownership itself.
Income tax on rental income (after 30% standard deduction), with TDS by tenants.
Capital gains tax on sale — 12.5% LTCG without indexation (post-Budget 2024), slab-rate STCG.
Surcharge on large income or gains at the tiered rates above.
TDS at Section 195 rates on sale consideration until a Lower-TDS certificate is obtained.
Schedule AL disclosure of Indian assets if Indian taxable income exceeds ₹50 lakh.
No Schedule FA (that is for residents only).
No wealth tax, no estate tax, no gift tax as separate taxes — those are all either abolished or folded into income tax.

An NRI owning three ₹5-crore flats in Mumbai earns rent and would eventually pay capital gains on sale; they pay nothing for the holding of those flats beyond municipal property tax to the civic body. That is a materially different outcome from many NRI source countries (the US, UK, France, some EU states, Singapore's ABSD, the UAE's corporate-tax perimeter) where some form of wealth or net-worth levy applies.

Will wealth tax come back?

Probably not, but periodic political interest merits a brief note:

Congress party manifestos in 2024 mentioned wealth-tax / inheritance-tax ideas at various points, though none were adopted as government policy.
Think-tank and academic proposals (Piketty-and-Chancel-style arguments) have argued for a super-wealth tax at 2% on net worth above ₹10 crore as a revenue measure. These remain proposals.
The Income-tax Act, 2025 — the successor to the 1961 Act — does not reintroduce wealth tax, and its drafting does not leave an obvious architectural hook to add one easily.

An NRI holding legitimate, tax-paid Indian assets in 2026 should plan on current rules (income tax, capital gains, surcharge, TDS, Schedule AL) and not around a speculative future wealth tax. If the law changes, it will come with lead time and exemptions, and the tax community will rewrite this page.

Bottom line

The old headline — "wealth tax on net assets above ₹30 lakh at 1%" — has not been law for over a decade. There is no wealth tax, no estate duty, and no separate gift tax in India today. The super-rich surcharge on income tax does some of the redistributive work the old tax was meant to do, in a lower-administration form. For NRIs, the real compliance load is income tax on Indian-source income, capital gains tax on Indian-asset sales, and TDS plus Form 15CA/15CB mechanics on repatriation — which are covered in the linked taxation and banking articles. Wealth tax itself is history.