financial services

Tax laws on Inherited Property

Inheritance-Tax-Laws-in-India

Recent news reports suggest that inherited assets, at least for High Net-worth Individuals, may soon be taxed under proposed new laws as the government seeks to shore up the nation’s tax revenue. Bequeathed assets are not liable to tax in India at the moment. Section 56 (2)(v) sub sub clauses c and d maintain that money received “under a will or by way of inheritance or in contemplation of death” of the taxpayer will not be interpreted as income from other sources. That head is otherwise taxed at ordinary income tax rates as specified in the Finance Act, 2017 below:

Rates of income-tax

(1)

where the total income does not exceed Rs. 2,50,000

Nil;

(2)

where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000

10 per cent. of the amount by which the total income exceeds Rs. 2,50,000;

(3)

where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000

Rs. 25,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;

(4)

where the total income exceeds Rs. 10,00,000

Rs. 1,25,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000.

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