Inheritance tax is a tax which is levied on the total value of money or at the time of transfer of wealth when an individual dies and leaves money or property to others. If someone receives money or property from a deceased family member or friend, then the person who received it might have to pay a certain percentage of it as a tax to the government.
How the Inheritance tax is calculated?
The tax is calculated which is based on the value of the assets minus any exemptions or deductions.
The main objective is generating revenue for the government and facilitating wealth redistribution.
Inheritance Tax Rate Across the World
Individuals in a few countries who received value or property from a deceased family member are required to pay inheritance Tax with rates ranging from 40% to 55%.
| United Kingdom | 40% |
| United States | 40% |
| France | 45% |
| South Korea | 50% |
| Japan | 55% |
What is the Inheritance tax rate for India?
India eliminated the inheritance Tax in 1985.
How come the subject of inheritance tax is gaining traction in India despite its absence in the current tax framework?
Recently, the Indian Overseas Congress Chief Sam Pitroda highlighted the importance of wealth redistribution policies, by using an example of the inheritance tax in the US.
Let's check what he said -
Sam Pitroda recently highlighted the importance of wealth redistribution policies, using the example of the inheritance tax in the US.
He noted that in the US, if someone has $100 million in wealth and passes away, they can only transfer about 45 per cent to their children; the government takes the remaining 55 per cent which means a portion of an individual's wealth (about 55%) is taxed upon their death.
Sam Pitroda also suggested this is an interesting law, you in your generation made wealth, you are leaving now, and you must leave your wealth for the public not all of it but half of it which sounds fair to him.
Whereas in India, there is no such tax. Pitroda emphasized the need for debate on such issues to create policies benefiting everyone.
He also clarified that his comments were personal and factual, not representing any official stance.
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