Nikhil Kamath
Credit: X/@nikhilkamathcio
Amid the Congress-BJP tussle over Indian Overseas Congress chairperson Sam Pitroda's statement on inheritance tax, an old video of Zerodha founder Nikhil Kamath is doing the rounds on social media where the 37-year-old entrpreneur can be heard speaking favourably of inheritance tax.
In the video, which is part of an interview of Kamath by Mint, the Zerodha founder can be heard saying, “When predicated wealth transfers from one generation to another, there has to be a filter so that a part of it can be redistributed. There is plenty of precedence to inheritance tax.”
"For India, where only about 3 per cent of the population pays income tax, implementing an inheritance tax could bring more people under the tax net," Kamath further added.
He goes on to give the example of South Korea as one such country where this tax is levied.
Currently, South Korea's inheritance tax rules are divided into five stages, with tax ranging from 10 per cent to 50 per cent of inheritance in each stage.
As per Tax Foundation, the only country among members of Organization for Economic Cooperation and Development whose inheritance tax rate is higher is Japan—with 55 per cent. Both UK and USA have their inheritance tax rates at 40 per cent. France's inheritance tax rate is currently at 45 per cent.
What is the controversy regarding inheritance tax in India?
In an interview with the news agency ANI, Pitroda said that inheritance tax in America is an "interesting law" that does not exist in India.
"...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% to his children, 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."
Pitroda's comments come at a time when the Congress is already facing a blistering attack from the saffron party with Prime Minister Narendra Modi reiterating in his rallies that the Congress has tried to extend reservation on the basis of religion and give it to Muslims, and accused the party again of hatching a "deep conspiracy" to snatch people's wealth and distribute it among a "select" group.
Today, while addressing a rally in Chhattisgarh, Modi recently said, "Congress says it will impose inheritance tax", urging people to ensure that a lotus blooms at every poll booth.
The Congress has distanced itself from Pitroda's comments with Jairam Ramesh clarifying that while Pitroda expresses his opinions freely on issues he feels strongly about, it does not mean that his views always reflect the position of the Congress.