Sam Pitroda’s Endorsement:
During an interview, Sam Pitroda expressed his support for an inheritance tax in India, drawing a parallel with the system in the United States. He argued that such a tax promotes fairness by ensuring that a portion of accumulated wealth is returned to the public. Pitroda’s remarks came amidst Congress leader Rahul Gandhi’s pledge to address wealth redistribution.
“In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies, he can only transfer probably 45 per cent of his income to his children, and 55 per cent is grabbed by the government. That’s an interesting law. It says you, in your generation, made wealth, and you are leaving now; you must leave your wealth for the public, not all of it, half of it, which to me sounds fair. In India, you don’t have that. If somebody is worth 10 billion and he dies, his children get 10 billion, and the public gets nothing… So these are the issues people will have to debate and discuss,” Pitroda stated.
PM Modi’s Critique:
Prime Minister Narendra Modi swiftly criticized Pitroda’s proposal, labelling it as a means for the Congress to seize wealth from hardworking citizens. He warned against the Congress’ agenda of wealth redistribution, accusing them of prioritizing “infiltrators” and families with more children.
“The advisor (Sam Pitroda) of the ‘prince’ and the ‘royal family’ had said some time ago that more taxes should be imposed on the middle class. Congress says that it will impose an inheritance tax, and it will also impose a tax on the inheritance received from parents. Your children will not get the wealth you accumulate through your hard work. Rather, the claws of the Congress government will snatch it away from you,” PM Modi stated.
Current Inheritance Tax Scenario in India:
India does not currently have an inheritance tax, as it was abolished by the Rajiv Gandhi government in 1985. Previously, under the Estate Duty Act of 1953, inheritors had to pay up to 85 per cent of the value of inherited assets. However, under the current Income Tax Act of 1961, movable and immovable assets received through inheritance or wills are exempt from taxation. Taxes are only applicable when inherited property or assets are sold, with rates determined by the duration of asset ownership.
Global Comparison:
Here’s a comparison of inheritance tax rates in various countries:
Country | Inheritance Tax Rate Range |
---|---|
United States | Varies by state, up to 20% |
United Kingdom | 40% |
Japan | 10% – 55% |
South Korea | Up to 60% |
France | Up to 45% |
Spain | 7.65% – 34% |
Ireland | 33% |
Belgium | 3% – 30% |
Germany | 30% |
Chile | 25% |
Greece | 20% |
Netherlands | 20% |
Finland | 19% |
Denmark | 15% |
Iceland | 10% |
Turkey | 10% |
Poland | 7% |
Switzerland | 7% |
Italy | 4% |
The debate surrounding inheritance tax continues to polarize opinions in India and worldwide. While proponents argue for its role in promoting fairness and curbing wealth inequality, critics caution against its potential negative impacts on economic growth and family businesses. Political parties’ stance on this issue will likely influence public opinion in the upcoming elections.