Buying or selling property could become less taxing if the Centre accepts the recommendations of a parliamentary panel examining the Direct Taxes Code Bill, 2010, that is expected to become a law next year.
The parliamentary standing committee on finance has decided to propose that the exemption limit for wealth tax be increased to Rs 5 crore from the current Rs 30 lakh. In addition, it wants the tax rate to be calibrated for asset sizes.
For property or assets worth Rs 5-20 crore, it will propose taxation at 0.5%, 0.75% for Rs 20-50 crore and 1% tax on properties worth more than Rs 50 crore.
The panel is expected to finalise its report on the proposed Direct Tax Code on March 2.As reported recently by Hindustan Times, the Centre is planning to exempt assets worth R1 crore from wealth tax and slap 1% tax on assets (specified under Wealth Tax Act, 1957) exceeding this amount in the upcoming budget.
Besides property, jewellery, aircraft, yachts, boats or cars for personal use will come under the wealth tax net. Archaeological collections, paintings and sculptures will also be taxable.
Under pressure from various quarters for unearthing black money, the finance ministry also plans to expand the ambit of the wealth tax in the DTC Bill.
"Taxable assets have been defined to include deposits in banks located outside India in case of individual, unreported bank deposits in case of others," a finance ministry note said, pointing out that this would be part of the "new measures for unearthing black money".