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The IUP Journal of Accounting Research and Audit Practices:

Research Note
Taxing Wealth - The Indian Dilemma

Article Details

Pub. Date	: July, 2023
Product Name	: The IUP Journal of Accounting Research and Audit Practices
Product Type	: Article
Product Code	: IJARAP070723
Author Name	: Rupak Das and Ebad Ur Rahman
Availability	: YES
Subject/Domain	: Finance
Download Format	: PDF Format
No. of Pages	: 08

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Abstract

The Indian National Congress, which governed the country postindependence, had a greater leaning towards socialism. This resulted in a progressive taxation regime that led to more number of taxes being levied on the richer section of the population. As the complex direct tax system of the time resulted in huge tax evasion, the Government of India set up the Kaldor Committee in 1955. It aimed to reform and harmonize the existing system of taxation. An integrated system of taxation was designed in order to prevent tax evasion/ avoidance by the wealthy, in consonance with the suggestions of the Committee. As a result, the Wealth Tax Act, 1957, was born.

In this world, nothing can be said to be certain, except death and taxes

- Benjamin Franklin

Description

This tax on wealth, also known as Wealth Tax, was levied by the Central Government on an entity's net holding or assets. It included financial assets such as cash, bank deposits and shares, and physical assets such as real estate, jewelry, and vehicles. Net wealth, in this regard, was calculated by ascertaining the aggregate value of assets and subtracting the aggregate value of debts or liabilities from it, as on the date of valuation. Assets that were exempt included agricultural land, personal effects, and certain types of insurance policies, among other things.