Zerodha's Nikhil Kamath's old video on inheritance tax goes viral. WATCH

'There is plenty of precedence to inheritance tax,' says Zerodha co-founder Nikhil Kamath

Zerodha co-founder Nikhil Kamath once said he supports the idea of inheritance tax, highlighting the importance of wealth redistribution when assets are passed from one generation to the next.

In an old video widely shared on social media, he discussed the need for a filter to redistribute a portion of wealth when it is transferred between generations, citing ample precedent for inheritance tax.

“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 and we know how it has done well in many geographies... South Korea has it, America has it, in the UK they call it estate taxes," said Kamath during a discussion with Mint newspaper in 2022.

 

"For a country like India, where three per cent of the population pays income tax, the wealth is not necessarily with the three per cent alone, it's with a much broader diaspora of the population. Something like an inheritance tax will bring more people under the tax net," said Kamath.

He added that when extremely affluent people pay inheritance tax, it would give the government a "certain amount of gunpowder" to carry out necessary reforms.

Why does controversy surround inheritance tax?

The video sparked debate amidst controversy surrounding the notion of wealth distribution, spurred further by comments by Sam Pitroda, Chairman of the Indian Overseas Congress. Pitroda highlighted the absence of an inheritance tax in India and advocated for more policies promoting wealth redistribution, citing the US inheritance tax model whereby a substantial portion of an individual's wealth is taxed upon inheritance.

"In America, there is an inheritance tax...It says you in your generation made wealth and you are leaving now, you must leave your wealth for the public," Sam Pitroda said.

What did PM Modi say on inheritance tax?

Prime Minister Narendra Modi rebuked Sam Pitroda's remarks, accusing the Congress party of harbouring "dangerous intentions" to seize assets and rights from the people.

“The dangerous intentions of Congress are coming to forth one by one and now it says it will impose inheritance tax. The advisor of 'shehzada' of the 'shahi parivar', who was also the advisor to the shehzada's father, said that more tax should be imposed on the middle class and those who earn by toiling hard," said PM Modi.

 

What is inheritance tax?

Inheritance tax is a levy imposed on the transfer of assets from deceased persons to their beneficiaries. The tax has been implemented in various countries with the aim to redistribute wealth and promote economic equality.