1. Non-Productive Wealth - Wealth-tax is levied on the net non-productive wealth of individuals(including NRIs), HUFs and companies only, @ 1% of the amount by which such net wealth exceed Rs.15 lakhs.

2. Exemptions - Section 5 of the Wealth-tax Act contains a list of certain specific exemptions.

i. The non-productive assets are liable to wealth tax, vide the new definition in section2 (ea). The exemption for one house, but only to Individual and Hindu Undivided Family is available. The exemption is also available to one house or plot of land not to exceed 500 sq.meteres.

ii. Bonds

(a) 9% Relief Bonds, 1987.

(b) 10% Relief Bonds,1993.

(c) 10% Relief Bonds,1995.

(d) India Development Bonds,1991.

(e) Gold Bonds, 1993.

(f) Resurgent India Bond, 1998.

iii. Any property held under trust or any other legal obligation for any public purposes of charitable or religious nature.

iv. The interest of an assessee in the co-parcenary (Joint heirship) property of any HUFof which he is a member.

v. Any one building in the occupation of a former Ruler.

vi. Jewellery in the possession of a former Ruler.

vii. One house or part of a house or a plot of land not exceeding 500 sq. meteres in area belonging to the assessee.

viii. NRI Bank Account deposits and FCNR Deposits, shares etc. are not considered as "assets" so they are exempt from Wealth-tax.

ix. In case of an NRI who has returned to India with the intention of permanently residing therein,money or the value of assets brought by him to India and the value of assets acquired by him out of such money within one year immediately preceding the date of his return or at any time thereafter. However, this exemption would apply only for a period of seven successive assessment years commencing on the assessment year following the date on which such a person returns to India.

3. Gift Tax Act, 1958 under which the Gift Tax was payable by the donor upto 30th September 1998. The Gift Tax Act has been repealed with effect from 1st October 1998 and therefore the Gift Tax is not chargeable for the gifts made on or after 1st October 1998.

4. The gift can therefore be freely given by NRIs to residents, but they must be genuine and by an NRI who has capacity to give such gifts.

5. · Estate duty was payable on the estate of a persons who have died on or before 15th March 1985.

The Estate Duty Act has been repealed and therefore there is no estate duty from the said date.