RE:Inheritance tax
by Vinayak Patil on Mar 05, 2007 04:59 PM Permalink
Inheritance tax is dual tax. First you pay tax on your income when you earn it (which is typically 33%). You invest remaining amount in your assets and then when you die, your children have to pay further tax on it (40%). Never ever bring that monster into our country. I live in London for few years now and see how people curse inheritance tax. Most of house prices here are above inheritance tax limit, so anyone dies here, their children have to sell their house and move into smaller houses and pay inheritance tax.
Inheritance tax was imposed in UK due to wealth people created because of colonization (Indian sub continent & Africa). It was set at high rate to only affect very rich people, but later with rate of inflation it is affecting everyone. Limit is not increased constantly and more people come under its net.
Inheritance tax is like having another income tax slab of 60% above a high limit.
For example you have 60% tax above income of 20 Lakh Rs.
In UK, most of families are split families. Whereas in India, joint families are more. For example my parents are my responsibility irrespective of where they stay in the world. So the house I inherit from my parents, I would have already contributed towards it. Family business which I inherit from them, I already invested into it. Not to count enormous number of hours I invested into it.
Inheritance tax is also known as Death tax. Especially when owner dies much younger.
I am seeing many parties and individuals favouring this tax, but remember one thing; it is easy to fall into tax net but you can never get rid of any tax.
