The basic exemption is now Rs. 15 lakh. Extra house or site, vehicle and jewellery above the limit become taxable. This limit was fixed quite some time back. But since the prices of both real estate and gold and silver had gone up considerably, is it not time to reconsider the basic exemption? Also, these days, a vehicle for transport has become a necessity even for lower middle-class people. Exemption may be given at least to one four-wheeler and one two-wheeler (say up to Rs. 5 lakh) from the purview of wealth tax, when a residential house and all financial assets are exempt. Wealth tax is now limited to a list of assets, which are considered to be non-productive. Neither the list of assets nor the assets excluded from the list as non-taxable carry conviction as regards the test of non-productivity. The exemption limit has also shrunk in value in view of inflation over the years. The suggestion made by S. Sathyanarayan of Shimoga as above would require attention.But then, wealth tax is no longer a tax on wealth as initially contemplated, when it was introduced in 1957 on the recommendation of the Economist, Nicholas Kaldor, to be a part of self-checking system to ensure verification of reported income by having the particulars of all the financial receipts and payments by levy of tax on gifts, expenditure and wealth, besides income-tax. Wealth tax is now a poor shadow of its original form. Gift tax has been given up. Expenditure tax again is no longer a tax on personal expenditure but is collected on hotel receipts by the Central Government with the State also collecting the same tax calling it luxury tax or such other name.There is a prime need for tax reform. Wealth tax on such a narrow list of assets fetching a meagre revenue and not serving the original purpose may well be given up with the statement of wealth being made mandatory as part of the requirements of income-tax return for all assessees so as to enable check on tax evasion as well as corruption, which can be located with reference to any abnormal and unaccounted increase in wealth
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