The blissful period of the highnetworth individuals might soon come to the end with the latest amendment to be introduced by the finance ministry. HNI's who have been avoiding excess tax by shadowing a few assets of theirs and only showing a few of them. However, this is not to be so soon in the future as the proposed amendment requires all individuals to put forward all their assets, domestic and foreign in their income-tax return forms. This is applicable to Hindu Undivided Families (HUFs) too.

This notification will soon become public. All individuals with foreign assets had to report assets and liabilities until last year and now to add to it would be Indian assets. This was a move to confirm whether the HNIs were paying the taxes rightfully on their said wealth or not. This year there have been over Rs 866 crores collected in wealth tax but the budget estimate has purported a figure that climbed beyond Rs 1,244 Cr. For the following year 2013- 14, the set target for the taxes was around Rs 950 cr.

Assets will be valued on the basis of the cost of acquisition. A car bought in 1998 would be valued at the price of the car at the time of purchase and not the depreciated or appreciated price. Last year tax payers had to disclose any foreign assets outside India or signing authority in any account located outside India.

The goodwill move will generate more taxes and check tax evasion effectively. Currently the Union Government has a 10% surcharge on anyone who earns more than Rs 1 cr per annum and tax would be deducted at source on transfer of immovable property costing more than Rs 50 lakh. Wealth tax however would be only 1% of any asset value that is over Rs 30 Lakh but it doesn't include one residential property and financial assets.

(AW- Anil)