What is Wealth Tax? What is the rate of wealth tax in India?
A wealth tax is a direct tax aimed at reducing wealth inequality. Unlike Income Tax which is levied on the income of taxpayer, wealth tax is levied on the wealth of the taxpayer. Wealth Tax is governed by Wealth Tax Act, 1957.
Wealth tax was primarily intended to tax the ultra-wealthy people who had accumulated wealth through inheritance or their own efforts and thus had to contribute more to the public coffers. On earnings of exceeding Rs.30 lakh per annum, an individual, a Hindu Undivided Family, or a company had to pay a wealth tax of 1%.