NRI's CORNER
F.E.M.A.
Taxable Assets in India

NRIs CORNER - Taxable Assets in India

Taxable Assets for residents as also for NRIs are :

1.      Buildings or land appurtenant thereto and includes a farm house if it is situated within 25 kilometers from the local limits of any municipality (whether known as municipality, municipal corporation or by any other name) or a cantonment board,but does not include one house or part of a house or a plot of land having area of 500 square meters or less.
2.      Value of personalvehiclesi.e. motor cars, yachts, boats and air crafts.
3.      Jewellery, bullion, furniture, utensils, etc., made of precious metal i.e. ornaments made of gold, silver, platinum, or any other precious metal and bullion  including utensils and furniture made of gold, silver precious metal or any alloy containing one or more of such precious precious metal.
4.      Cash in hand in excess of Rs.50,000/-.
5.      Urban land.
1)
that is land situated 
 
i)
Within the Jurisdiction of Municipality having population of 10,000 and more or
 
ii)
in any area within 8 kilometers from the local limits of municipality.
However this does not include :
1.      A house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees;
2.      Any house for residential or commercial purposes which forms part of stock-in-trade;  
3.      Any house which the assessee may occupy for the purposes of any business or profession carried on by him;
4.      Any residential property that has been let-out for a minimum period of three hundred days in the previous year;
5.      Any property in the nature of commercial establishments or complexes; 
6.      Motor cars used by the assessee in the business of running them on hire or as stock in trade.  
7.      Jewellery, bullion, furniture, utensils or any other article used by the assessee as stock in trade.
8.      Yachts, boats and aircrafts used by the assessee for commercial purpose.
9.      Urban Land will not be  chargeable to tax. if .....
i)    Construction of building is not permissible
ii)   Construction of building is made with approval of appropriate authority.
iii) Unused land held for industrial purpose for a period of  2 years from the date of acquisition.
iv)   Land is held as stock in trade for a period of 10 years from the date of acquisition.
Non-resident Indian
1.      "Non-resident Indian" as per FEMA is different than "Non-resident Indian" as per the Income Tax Act,1961.
 
DEEMED ASSETS
1.      Assets required to be included, though this may belong to others (Deemed Assets) 
i)
Assets transferred to spouse directly or indirectly otherwise than for adequate consideration or in connection with an agreement to live apart.
ii)
Assets held by a minor child except the following:
 
a.)
Assets held by a minor child suffering from any disability of the nature specified. (i.e. permanent physical disability (including blindness) or mental retardation.) of the Income-Tax Act,
 
b.)
Assets held by a minor married daughter.
 
c.)
Assets acquired by a minor child out of the following income:
 
 
i.)
Income from manual work done by him;
 
 
ii)
Income from activity involving application of his skill, talent or specialised knowledge or experience.
iii)
Assets transferred to a person or Association of Person for the benefit of individual, his/her spouse directly or indirectly otherwise than for adequate consideration for the immediate or deferred benefit of the individual himself, his or her spouse.
iv)
Assets transferred to a person or association of person under revocable transfer.
v)
Assets transferred to son's wife directly or indirectly on or after 1-6-1973 otherwise than for adequate consideration.
vi)
Assets transferred to person or association of person for the benefit of son's wife directly or indirectly on or after 1-6-1973 otherwise than for adequate consideration for the immediate or deferred benefit of the son's wife of such individual or both.
vii)
Converted property by an individual, who is a member of a Hindu Undivided Family, converts his individual property after 31-12-1969 into the property belonging to the family through the act of such impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or makes gift of separate property or transfers property otherwise than for adequate consideration, such property known as converted property shall be included in the net wealth of such individual.
viii)
Holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate.
Deemed assets which are included in computing the net wealth of any of the three categories of assessee viz., individual, HUF, and company:
1.      Interest in a firm or association of persons:
In case of an assessee who is a partner in a firm or a member of an association of persons (not being a co-operative housing society), there shall be included the value of his interest in the assets of the firm or association.
2.      Gift made by means of book-entries where money has not been actually delivered to the other person:
Where a gift of money from one person to another is made by means of entries in the books of accounts maintained by one or more of the following persons:
a.)
the donor; or 
b.)
an individual or a Hindu Undivided Family or firm or an association of persons or body of individuals with which the donor has business or other relationship,
the value of such gift shall be included in the net wealth of the donor.
3.      Membership under a house building scheme:
Where the assessee is a member of a co-operative society, company or other association of person and a building or a part there of is allotted or leased to him under a house building scheme of the society, company or association, the assessee shall be deemed to be the owner of such building or part.
In determining the value of such building or part, the value of any outstanding installment of the amount payable under such scheme by the assessee to the society, company or association towards the cost of such building or part and the land appurtenant thereto shall, be deducted as a debt owed by him in relation to such building or part.
4.      Building/right in building acquired in special cases:
a.)
A person, who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 shall be deemed to be the owner of such asset and the value of such building or part shall be included in computing the net wealth of such person.
b.)
A person, who acquires any right (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof by virtue of any such transaction as is referred to in clause (f) of section 269UA of the Income-tax Act, 1961 (i.e. lease for not less than 12 years) shall be deemed to be owner of such asset and value of such building or part shall be included in computing the net wealth of such person.

IMPORTANT- IMPORT OF GOLD & SILVER :
NRIs being granted concessional import duty and permission to import gold & silver often import large  quantity of gold / silver. If the market value of such gold / silver exceeds Rs.30 lakhs & the same is held in India as at 31st March, the NRI is liable to pay wealth tax @ 1% on such value together with value of other taxable assets & file wealth tax return.
WEALTH TAX RATES
1.      In case of NRIs, Wealth Tax is leviable at par with resident.
2.      The Tax rate are 1% of net wealth subject to basic exemption of Rs.30,00,000/- (Rupees Thirty Lakhs).
 
WEALTH (Rs.)
TAX
0 TO 30,00,000
NIL
30,00,001 AND ABOVE
1%

 

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