6 Replies to “Is fixed deposit in a Bank in India is a wealth tax liability or not?”

  1. Hi,
    The wealth tax liability arises on the value of net wealth.
    For this purpose there are some specified assets which are covered under wealth tax.
    The FDR is in no case an asset for the purpose of wealth tax hence there arises no wealth tax liability.
    Wealth tax is levied if an individual / HUF/ Company have net wealth exceeding Rs. 15 Lacs.

  2. Bank FD, cash in bank (SB or Current A/c), shares, debentures, one house or one plot (less then 600 sq.yds), agriculture land, cash in hand less than Rs.50,000 , plot 8 kms away from notified ares (Municipal, Corporation, Major Panchayat or contonment limits) are tax free and dose not come under wealth tax view. Also the investments which is treated as business assessets are also dose not come under wealth tax. The wealth tax tax free limit is Rs.15 lakhs. Over and above that a flat rate of 1% tax on it.

    I am giving an example below:

    Cash in Bank FD Rs.25 lakhs—————- Nil
    Cash in sb A/c Rs.99 lakhs——————- Nil
    Gold/Silver (personal) as on 31st Mar.3 L- 3 lakhs
    Gold in gold shop business(10 crores Val) NIL
    1 house 1 crore as on 31st march———– Nil
    1 house 10 lakhs as on 31st march——— 10 lakhs
    1 house given on rent val.25 lakhs———– Nil
    1 plot 500 sq.yds 3 lakhs as on 31st mar.- 3 lakhs
    10 Acres of Ag.land 10 crores on 31st M- Nil
    Personal car lak. val. as on 31st march— 3 lakhs
    National savings certificates 3 lakhs——- Nil

    Your net wealth after exempted(NIL)——-Rs.19 lakhs
    Less basic exemption Rs.15 lakhs ——–Rs. 4 lakhs.
    Your wealth tax on 4 lakhs Rs.4,000/-+ 120 Edu.Cess.

    Hope that you under stood it. Regarding filing of returns, truely seaking many people are avoiding it. Most of them do not know about it. If your wealth is more than taxable, better concult a your tax consultant and take his advise.


  3. Mr.Atul, the fixed deposit in a bank in India is not liable for wealth tax as per Wealth Tax Act Section 2(ea). The basic exemption is Rs.15,00,000/-. Over and above wealth of Rs.15,00,000/- one has to file welth tax returns and the rate of wealth tax is 1% of the net wealth exceeding Rs.15 lakhs.

  4. As per the law of the land. NO. Wealth tax is levied on the net worth of the individual.The stock in trade of a business say jewellery showroom even if the stock is 2000 crores, will not per se make you liable for wealth tax.However if your personal assets are over the limit prescribed by the wealth tax act (read withj the latest amendments), currently 15 Lacs, then you need to worry aboubt the tax liability.

Leave a Reply

Your email address will not be published. Required fields are marked *

fifteen + 11 =