With Budget 2026 around the corner, the issue of whether there is a possibility of bringing back wealth tax sparks fresh debate. However, experts argued that even if there is a need for bringing back this tax, it is unlikely to be implemented soon. They cautioned that bringing back wealth tax can even lead to more outflow of wealth and migration of high net individuals. However, there is a possibility that the government will think of bringing alternate taxes such as gift tax or estate tax, suggested experts.
"Wealth tax is unlikely to be introduced at this point. There are easier ways of taxing the super rich. For instance, introducing gift tax. Some learnings from jurisdictions like the US shows that a one-time gift tax combined with estate tax has been working. But, the basic exemption limits are extremely high. So, if such taxes are introduced in India, it is expected that it will be with very high exemption limits,” said Riaz Thingna, tax partner - Grant Thornton Bharat.
India scrapped the wealth tax in Union Budget 2015, ending a 1% levy on net assets such as land, buildings and vehicles held by individuals, Hindu undivided families and companies above specified thresholds. The purpose of this tax was to reduce economic disparities in India and individuals with an income over `1 crore and companies with an income over 10 crore used to fall under this.
However, experts cautioned that introduction of wealth tax can also lead to further outflow of wealth and more individuals giving up the citizenship of India, unless several other factors are addressed. Even in that matter, imposing estate duty like the US won’t be devoid of challenges. “Estate duty is unlikely to happen in the short run. One also realises that every time they have tried to introduce some taxes on wealth, you have seen a lot of outflows happening. And, any attempt to tax more, we only encourage more such people to leave the country and relocate in more friendly regimes," added Thingna.
Henley & Partners reported an estimated net outflow of nearly 4,300 millionaires from India in 2024. A 2025 Kotak Private and EY survey showed 22% of India’s super-rich aim leaving the country for better living, healthcare, education, and business environments abroad.
Arun Kumar, economist and former member of the team to study the black economy for CBDT, argued, “They (HNIs and ultra HNIs) are leaving because of the decline in the investment climate, lack of demand and worsening social conditions. Due to crony capitalism, investment climate is not the same for everybody - some are favoured and some are disfavoured. So, those who are disfavoured are leaving.” According to Kumar, even if wealth tax gets implemented, with better investment climate and profitability of investment, the chances of migration of the rich could be minimised.