Inheritance tax in the eye of political storm amid Lok Sabha elections
Congress said it had no intention of bringing an inheritance tax if voted to power, and claimed several BJP leaders in the past have advocated for such a law
The growing political storm on inheritance tax, sparked by comments by Indian Overseas Congress president Sam Pitroda that prompted Prime Minister Narendra Modi to accuse the Congress of intending to take away people’s wealth even after death, has reignited a long-standing debate 39 years after the Estate Duty tax was scrapped in 1985.

To be sure, the Congress distanced itself from Pitroda’s comments, and senior leaders of the party alleged in turn that the BJP has in the past advocated for such a tax. Meanwhile, from the other side, leader after leader in the BJP raised Pitroda’s comments as evidence of a deeper Congress plan.
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The story of an inheritance tax in India goes back seven decades. In 1953, Parliament, then led by prime minister Jawaharlal Nehru, passed a legislation, bringing into force the Estate Duty Act, which was conceived with the aim of reducing glaring economic disparity in a nascent country just six years into Independence. Estate duty was imposed on the total value of property held by an individual at the time of their demise, with 40% the maximum marginal rate levied on property exceeding the value of ₹50 lakh. Under the act, the tax had to be paid by heirs when they inherited property or assets — both movable and immovable — that were passed on to them.

The tax was at the centre of debate for years. Its proponents argued that it helped address disparities caused by inherited wealth, but came under sharp criticism for a host of issues, including the different methods adopted for the valuation of properties and double taxation — estate levy was charged on top of an income tax.
In March 1985, 32 years after it was enacted, the Congress government under then prime minister Rajiv Gandhi scrapped the law. Explaining the rationale behind the move, then finance minister Vishwanath Pratap Singh in his Budget speech told Parliament that the duty had not achieved the twin objectives of reducing unequal distribution of wealth and assisting the states in financing development schemes. Singh said that the yield from the duty was only about ₹200 million but the cost of administration was relatively high, with the a massive spike in litigation being filed before courts. Four years later, the Rajiv Gandhi government made an attempt to bring back a revised legislation, called the The Wealth (Inheritance) Duty Bill, 1989, which sought to simplify estate duty mechanisms. By November 1989, though, the Congress government had lost the general elections, and no further movement on the bill took place.
On Wednesday, the Congress distanced itself from Pitroda’s remarks, attempting to clarify that it had no intention of bringing an inheritance tax if voted to power, and pointed out that several BJP leaders over the past decade have advocated for such a law.
Also Read: PM Modi corners Congress after Sam Pitroda fuels wealth row
Congress general secretary in charge of communications, Jairam Ramesh, said on X: “Congress has no plan whatsoever to introduce an inheritance tax. In fact, prime minister Rajiv Gandhi abolished Estate Duty in 1985. But it is the Modi Sarkar that has wanted to do so!”
He said that in 2014, Jayant Sinha, the then minister of state for finance, publicly asked for such a tax, adding that in 2018, then finance minister Arun Jaitley had praised inheritance tax for “spurring large endowments to hospitals, universities in the West”.
Ramesh also shared an old video of Sinha where the former BJP minister can be heard saying, “We need estate taxes so that we take away at least 50 or 55% of the advantage that dynastic business people already have right now. So, it’s about levelling the playing field and creating opportunity…” To be sure, Sinha made these comments in 2013 when he was managing director of Omidyar India at the Forbes India philanthropy awards. He joined the BJP later that year and was elected as an MP in 2014.
While BJP leaders did not respond to Ramesh’s comments, they said that Pitroda had done an “x-ray of the Congress manifesto” and revealed the party’s intentions.
“We are a savings-based economy. Who motivates the savings? The big think-tanks of the world have said that family and generational wealth motivates savings. That means, what assets you will leave for your children and grandchildren. One generation works hard to make money, then second generations make something out of it and then the third generation receives the benefits. But the Congress wants to snatch their happiness,” said BJP’s national spokesperson Sudhanshu Trivedi.
The controversy comes amid another raging debate on redistribution of wealth – one that has seen the Congress talk about a survey to determine which group or community had control over what proportion of resources, and the BJP alleging that it indicated a plan to redistribute these resources to Muslims.
