Debate Ignites Over Inheritance Tax Policies in India

A recent debate has erupted in India over the issue of inheritance tax, sparked by controversial remarks made by Indian Overseas Congress chairman, Sam Pitroda, advocating for a US-style tax policy on inherited family wealth.

The debate intensified when Prime Minister Narendra Modi accused the Congress party of planning to redistribute wealth among Muslims, following which Sam Pitroda suggested a wealth distribution policy through inheritance tax.

Rahul Gandhi, the General Secretary of Congress, swiftly denied any plans for an inheritance tax by the party, clarifying that Pitroda’s comments were his personal views.

India had an Estate Duty Act that imposed a tax on inherited properties until it was abolished in 1985 under the government of Rajiv Gandhi. Nikhil Kamath, co-founder of Zerodha, recently expressed support for an inheritance tax in India, citing the precedence of such taxes in countries like South Korea, the US, and the UK.

Not everyone agrees with the implementation of an inheritance tax in India; Mumbai-based tax expert, Balwant Jain, argued that it could discourage hard work and hinder economic progress.

Neeraj Agarwala, a partner at Nangia Andersen India, highlighted the current tax regulations around inherited properties in India, pointing out that no tax liability is incurred until the sale of inherited property in the future.

The debate on inheritance tax policy in India continues to stir discussions as proponents and opponents present their arguments on wealth redistribution and economic equality.