Congress leader Sam Pitroda’s remarks regarding inheritance tax in the United States have sparked a political controversy amidst the ongoing national polls in India. Prime Minister Narendra Modi seized on Pitroda’s comments, alleging that the Congress intends to redistribute wealth through inheritance taxation. However, the Congress party has distanced itself from Pitroda’s remarks, claiming that they do not represent the party’s position.
The concept of inheritance tax has been a topic of debate in India for decades. In 1985, the estate duty, a form of inheritance tax, was scrapped due to its low yield and high administrative costs. However, the idea of reintroducing inheritance tax has resurfaced, with proponents arguing that it can help address wealth inequality caused by inherited assets.
Historically, India levied a tax on inherited property and assets, with a maximum marginal rate of 40% for property exceeding the value of ₹ 50 lakh. The Wealth (Inheritance) Duty Bill, 1989, was proposed to revive inheritance taxation, but it did not come to fruition due to the dissolution of Parliament.
Globally, countries such as France, Germany, the United States, Greece, and Japan impose inheritance tax to mitigate wealth concentration and inequality. The reintroduction of inheritance tax in India remains a topic of debate, with proponents emphasizing its potential to reduce wealth disparities and opponents citing concerns about its impact on inheritance and economic growth.
