Inheritance Tax Sparks Political Storm in India

A political storm erupted in India over inheritance tax, reigniting a long-standing debate. The controversy stems from comments by Indian Overseas Congress president Sam Pitroda, who prompted Prime Minister Narendra Modi to accuse the Congress of planning to seize people’s wealth even after death. The Congress distanced itself from Pitroda’s remarks, while senior leaders alleged that the BJP has advocated for such a tax in the past. The debate centers around the Estate Duty Act, scrapped in 1985, which aimed to reduce economic disparity. Proponents argued for its ability to address wealth disparities, while critics pointed to valuation issues and double taxation. The Rajiv Gandhi government attempted to reintroduce legislation in 1989 but failed due to electoral loss. BJP leaders accused Pitroda of revealing the Congress’s intentions, while Ramesh cited statements by former BJP officials who supported inheritance tax. Amid a larger debate on wealth redistribution, the controversy continues to stir political tensions.

Inheritance Tax in India: A Historical Perspective

India, historically, had an inheritance tax system prevalent before 1985. Enacted under the Estate Duty Act of 1953, it aimed to address economic inequality and was designed progressively, with rates reaching up to 85% for estates valued over Rs 20 lakh. However, facing criticism for complexity, litigation, and concerns about double taxation, the estate duty was abolished in 1985. Currently, India does not have an inheritance tax system, and assets inherited through inheritance or a will are not subject to gift tax.

Scroll to Top