What did Sam Pitroda say about inheritance tax? All you need to know

Sam Pitroda kicked off a row by calling inheritance tax as imposed in the US an interesting idea, while pointing out that such a law did not exist in India

Amid a political controversy surrounding Congress's "wealth redistribution" poll promise, Sam Pitroda, the chairperson of the Indian Overseas Congress, said inheritance tax, as it existed in the United States (US), is an "interesting idea". However, Pitroda faced criticism from the Bharatiya Janata Party (BJP), and the Congress distanced itself from his statements.

Explaining the concept of inheritance tax in certain American states, Pitroda said, "If one has $100 million worth of wealth and when he dies he can only transfer probably 45 per cent 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, we do not have such provisions. If an individual is worth 10 billion and passes away, their children inherit the entire sum, leaving nothing for the public... These are the discussions and debates that people will need to engage in," he added.

In the US, only six states impose an inheritance tax. Additionally, there is a tax known as the estate tax, or "death tax," which is imposed on the transfer of property after death.

Responding to Prime Minister Narendra Modi's criticism of Congress's promise as "politics of appeasement," Pitroda said, "It's naive to think like that... I have some concerns about his brain."

Pitroda further emphasised that wealth distribution was a matter of policy and underscored the necessity of implementing a "minimum wage" in India.

"The Congress party would frame a policy through which the wealth distribution would be better. We don't have a minimum wage [in India]. If we come up with a minimum wage in the country saying you must pay so much money to the poor, that's the distribution of wealth," he said.

"Today, rich people don't pay their peons, servants, and home help enough, but they spend that money on vacation in Dubai and London... When you talk about the distribution of wealth, it is not that you sit on a chair and say I have this much money, and I'll be distributing it to everybody," Pitroda added.

BJP slams Congress over Pitroda's remark

Sam Pitroda's remark triggered a political firestorm, with the BJP warning people of "property snatchers". 

"Voting for Congress = Losing your Money + Property + Belongings! Voters be aware, property snatchers are here!" BJP spokesperson Jaiveer Shergill wrote on X (formerly Twitter).

Union Home Minister Amit Shah also raked up Pitroda's remarks,asking the Congress to retract its promise of a financial survey from the election manifesto.

"The entire Congress has been exposed due to Sam Pitoda's statement. When PM Modi raised the issue, Rahul Gandhi and Priyanka Gandhi went on the backfoot. I hope Congress will withdraw this thing from its manifesto," Shah said.

BJP's Shehzad Poonawalla slammed the Congress and said they wanted to "grab your hard-earned tax-paid resources".

"Ironically, the Gandhis built a huge treasury for their own children and son-in-law, but they want to grab your hard-earned tax-paid resources," he wrote on X.

Sam Pitroda issues clarification

Amid the controversy, Pitroda clarified that the US inheritance tax had nothing to do with the Congress manifesto.

Reacting to BJP's criticism, Pitroda said, "Who said 55 per cent will be taken away? Who said something like this should be done in India ? Why is the BJP and media in panic?"

"I mentioned US inheritance tax in the US only as an example in my normal conversation on TV. Can I not mention facts ? I said these are the kind of issues people will have to discuss and debate. This has nothing to do with the policy of any party including Congress," Pitroda said.

"It is unfortunate that what I said as an individual on inheritance tax in the US is twisted by Godi media to divert attention from what lies the PM is spreading about the Congress manifesto. PM's comments on Mangal Sutra & gold snatching is simply unreal," he added.

Congress distances itself from Pitroda's remark

The Congress, on the back foot, said Pitroda's views do not always reflect the position of the party.

"Sam Pitroda expresses his opinions freely on issues he feels strongly about. Surely, in a democracy, an individual is at liberty to discuss, express, and debate his personal views," Congress communications in-charge Jairam Ramesh said.

"This does not mean that Pitroda's views always reflect the position of the Congress. Sensationalising his comments now and tearing them out of context are deliberate and desperate attempts at diverting attention away from Narenda Modi's malicious and mischievous election campaign; that is anchored only in lies and more lies," Ramesh further said.

Congress president Mallikarjun Kharge further accused the BJP of "playing games" just for "votes". 

"There is a Constitution, we don't have any intention. Why are you putting his ideas in our mouths? Just for votes, he is playing all these games," Kharge said.

Rebuking BJP over the charges, senior Congress leader Pawan Khera asked, "Has he [Pitroda] said that the Congress will bring this policy? Has the Congress said it in its manifesto? Is discussing and debating different ideas not allowed in this ancient land of Shastrarth?

What exactly is inheritance tax in the US?

The United States levies two types of taxes: estate tax and inheritance tax. Around 12 states impose estate taxes, while six states enforce inheritance taxes.

The estate tax, commonly referred to as the "death" tax, is a federal tax applied to property transfers following the owner's death. This tax is owed by the estate, not by the beneficiaries, and ranges from 18 per cent to 40 per cent.

In contrast, inheritance tax is imposed on individuals who inherit money, property, or other assets. It applies solely upon the individual's death and transfer of assets in states with an inheritance tax, irrespective of the beneficiary's residency.

Other controversy surrounding Sam Pitroda

In December last year, Pitroda stirred controversy with his remarks expressing concern over the attention that the Narendra Modi-led BJP government at the Centre is placing on the Ram Temple inauguration.

In an interview with ANI, Pitroda said, "I am bothered by the fact that the entire country is fixated on the Ram Temple and that everything good in the country happens because of the Prime Minister.

"There are signals I am getting that we are heading in the wrong direction. And when the entire nation is fixated on the Ram Temple and Ram Janmabhoomi, lighting lamps, it bothers me…To me, religion is something very personal, and national issues are education, employment, growth, economy, inflation, health, environment, pollution. But no one speaks about it," he said.

On May 9, 2019, Sam Pitroda was questioned about allegations by the BJP that the "instructions for riots" during the anti-Sikh riots in 1984 came from Prime Minister Rajiv Gandhi's office.

Calling the allegation a lie, Pitroda said, "What about '84 riots now? Talk about what you did in the last five years. What happened in 1984 has happened. So what? You were voted to create jobs. You were voted to create 200 smart cities. You did not even do that. You did nothing, so you keep talking about here and there."

In April 2019, Pitroda left the Congress scrambling for cover when he said in a TV interview that the middle class should not be "selfish" and be prepared to pay more taxes to fund the party's proposed NYAY, a scheme that would guarantee a minimum income for every poor household. 

Pitroda said that while the middle class will have more opportunities and jobs, their taxes may rise marginally if the NYAY scheme becomes a reality. "The middle class should not be selfish and have a big heart," he said.

In February 2019, Pitroda questioned the death toll in the Balakot airstrike conducted by the Indian Air Force (IAF) in Pakistan in retaliation to the Pulwama terror attack.

"I don't know much about attacks. It happens all the time. Attacks happened in Mumbai also. We could have then reacted and just sent our planes, but that is not the right approach. According to me, that's not how you deal with the world," Pitroda said, demanding proof of the IAF's operation. 

"Eight people [26/11 terrorists] come and do something; you don't jump on the entire nation [Pakistan]. It's naive to assume that just because some people came here and attacked, every citizen of that nation is to be blamed. I don't believe in that way," he added.