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Specific Exemptions for NRI under Section-5 of the Wealth Tax Act.

[ Items completely Exempt from Wealth Tax for an NRI ]

Section 5 of the Wealth Tax Act contains a list of certain specific exemptions. The long list of various exemptions, with effect from the Assessment Year 1993-94, has been curtailed. Thus from a practical point of view certain important general types of complete exemptions from wealth tax under Section 5 of the Wealth Tax Act are the following:

  1. Any property held by the taxpayer under trust or any other legal obligation for any public purposes of charitable or religious nature in India.

  2. The interest of the assessee in the co-parcenary property of any HUF of which he is a member. Co-parcenary means joint heirship.

  3. Any one building in the occupation of a Ruler.

  4. One house or part of a house or a plot of land not exceeding  500 sq. meters in area belonging to the assessee from the A.Y. 1999- 2000.

  5. Jewellery in the possession of a former Ruler.

  6. In the case of an NRI who is ordinarily residing in a foreign country, who, on leaving that country, has returned to India with the intention of permanently residing therein, money or the value of assets brought by him to India and the value of assets acquired by him out of such money within one year immediately preceding the date of his return or at any time thereafter.

However, this exemption would apply only for a period of seven successive assessment years commencing on the Assessment Year next following the date on which such a person returns to India. As regards NRI Account Deposits and FCNR Deposits, as also shares, etc., held by the NRI they are not considered as “Assets” and are thus absolutely exempt from wealth tax. Thus an NRI is not liable to any wealth tax at all on shares, units, bank deposits, government securities, gold bond deposits, loans and advances, etc. held by him.

Items Completely Exempt from Wealth Tax for an NRI
1. Only Non-Productive Wealth Is Liable To Wealth Tax From Assessment Year 1993-94.
2. Specific Exemptions for NRI under Section 5 of the Wealth Tax Act.
3. Clubbing Of The Wealth With The Income Of The Parents
4. Assets And Tax Outside India Are Not To Be Calculated While Computing Taxable Wealth Tax

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Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians !

1. Basic Aspects Of Tax Planning For NRIs
2. How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children
3. The Incomes of an NRI completely Exempt from Income Tax
4. Capital Gain of an NRI could be Completely Exempt from Income Tax
5. Items completely Exempt from Wealth Tax for an NRI
6. Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets
7. Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
8. Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds
9. Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax
10. FEMA and NRIs Preliminary Aspects Analysed
11. Acquisition and Transfer of Immovable Property in India by NRIs and FEMA
12. Permissible and Prohibited Current Account Transactions in Case of NRI
13. Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India
14. Deposits in India by an NRI
15. RFC account of a Returning NRI and Investment Abroad
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