When was the Wealth Tax first introduced in India?

Correct option is D

The correct answer is (d) 1957.
Explanation:
· Wealth Tax in India was first introduced in 1957. The Wealth Tax Act of 1957 was enacted to impose a tax on the net wealth of individuals, Hindu Undivided Families (HUFs), and companies.
· Wealth tax was a direct tax levied annually on the net wealth of taxpayers, but it was abolished in the Union Budget of 2015 due to its low contribution to the revenue and the high administrative cost of collection.
Important Key Points:
· The Wealth Tax Act aimed to reduce income inequality by taxing the wealth accumulated by individuals and entities.
· Wealth tax was calculated based on the market value of all assets owned by the taxpayer, minus any debts owed.
· Certain assets were exempt from wealth tax, including one residential house, specified jewelry, and agricultural land.
· The abolition of wealth tax in 2015 was replaced by an additional surcharge on the super-rich, known as the "super-rich surcharge."
· The rationale behind the abolition was that wealth tax had become difficult to administer and was not yielding significant revenue.
· The concept of taxing wealth still exists in different forms globally, with varying structures and thresholds depending on the country.
Knowledge Booster:
· 1991: This year is significant in Indian economic history due to the economic liberalization reforms, but not related to the introduction of wealth tax.
· 1948: The year after India's independence, important for several foundational economic and tax-related policies but not for wealth tax.
· 1976: Marked by the 42nd Amendment during the Emergency period, not related to wealth tax introduction.