Inheritance Tax

Inheritance Tax, also known as Death Tax, is under discussion for reintroduction in India due to growing concerns about economic inequality.

What is Inheritance Tax?

• Definition: Inheritance Tax is imposed on individuals who inherit assets from a deceased person.
• Tax rate varies based on the value of the property received and the heir’s relationship to the deceased.
• Also known as a Death Tax, it is distinct from estate tax, which is assessed on the total value of a deceased person’s estate.

History of Inheritance Tax in India:

• Inheritance tax was previously known in India as estate duty.
• Estate duty was introduced in 1953, targeting the market value of both immovable and movable properties inherited.
• The estate duty reached a tax rate of up to 85%, contributing to its unpopularity.
• Due to high administration costs and numerous litigations, it was abolished in 1985 by theRef Rajiv Gandhi government.
• Post-abolition, similar taxes like gift tax and wealth tax were also imposed but were eventually abolished in 1998 and 2015 respectively. However, gift tax was reintroduced in 2004.
• Currently, India does not impose an inheritance tax.

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