Wealth tax was introduced in 1957 through the Wealth Tax Act. It is a direct tax that applies to the assets owned by a person. It was in effect until FY 2014-15. Until then, apart from individuals, Hindu Undivided Families (HUFs), as well as companies, were required to pay wealth tax. Indians residing within the country were taxed for their holdings abroad while non- resident Indians paid wealth tax for properties held within the country. 

Rate of wealth tax
The calculation of wealth tax was done based on the net worth of the total assets owned by a taxpayer or those passed in inheritance such as property, jewellery, shares, cash etc. Wealth tax at the rate of 1% applied to those with a net worth above the threshold limit of ₹ 30 lakhs. Calculation of wealth tax was done on the amount above ₹30 lakhs on the date of valuation of the assets. The last date for filing wealth tax returns as well as income tax used to be the same. However, high net worth individuals(HNIs) were required to file both.

Why was it abolished?
Levying wealth tax on the richer strata of the society was aimed at bridging the economic gap between the rich and the poor. However, it backfired. The government had to sustain a high cost of collecting the tax over the years. Compliance was low, as was the tax inflow for the government. The whole process also posed a substantial administrative burden with valuers issuing a report detailing the valuation of assets. All of these reasons forced the discontinuation of wealth tax in the Budget of 2015.

The present scenario
Today, those falling in the high-income bracket need to pay a surcharge as per the current direct tax structure. For FY 2018-19, an individual with yearly income above ₹1 crore and companies with more than ₹10 crores profit had to pay a surcharge of 15%. On the other hand, the applicable surcharge for a corporate entity with yearly net income between ₹1 crore to ₹10 crores is 7% and 12% above ₹10 crores. No calculation of wealth tax is required.

Budget 2019
Finance Minister refrained from reintroducing wealth tax in 2019.