Anil Anand

What is inheritance tax? Why has it suddenly become a debating issue in the ongoing Lok Sabha elections? Is it so draconian that Prime Minister Narendra Modi had to take the centre-stage with a jibe on arch rival Congress: “Congress ki loot zindagi ke saath bhi, zindagi ke baad bhi…..?

One is sure an overwhelming majority of country’s 140 crore population or the 97 crore voters ready to cast their vote are unaware about the inheritance tax. Since the 1950s India had what was known as estates tax which was abolished by the then Prime Minister Rajiv Gandhi’s government in 1985.

Technocrat turned politician and president of Indian Overseas Congress- foreign wing of the Congress- Sam Pitroda perhaps was unaware that his observation at this juncture, on need to discuss the inheritance tax as means of mopping up resources as prevalent in the USA, will court a controversy of unimaginable dimension. How could Mr Modi miss the opportunity to hit back given the fact that Mr Pitroda is a close family friend of Gandhi family? And Congress and Gandhi-family remain to be his favourite whipping boy.

Mr Pitroda is not new to courting seemingly avoidable controversies. Perhaps Pitroda the technocrat runs roughshod on Pitroda the politician. His sense of timing and political judgement betrays him every time he has spoken on controversial issue.

His comments on Ram Mandir made in December 2023- it seems the country is on the wrong path as it is just talking about Ram Mandir and lighting Diyas- at a time when Mr Modi was gearing up to preside over the consecration ceremony of the Ayodhya temple and make the poll-plank, landed the Congress in trouble. So did his casual remarks in the context of anti-Sikh riots of 1984.

Let us get back to the current controversy. The BJP lost no opportunity to create hullaballoo and corner the Congress. At a time when the Congress manifesto was making a head-way and generating positive discourse with first phase of polling giving some encouraging indications for the opposition I.N.D.I.A bloc, Mr Modi tried to use the inheritance tax observation of Mr Pitroda as a handy tool to square up with the Congress. May be to further divert attention from burning issues of bread and butter.

Did it have the desired effect? The answer is no. Has the BJP been opposed to the concept of inheritance tax? The answer again is no. Whether it is suitable to Indian conditions or not is a separate debate.

What is an inheritance tax?

For the beginners it is a tax levied on the total value of money and property of a deceased person before it is distributed to his/her legal heirs. The purpose of the inheritance tax is to generate revenue for the government and to redistribute wealth.

The manner in which Prime Minister Modi gave a political colouring to this taxation issue by targeting the Congress and its first family, left no one in doubt that he was guided by the exigencies of the electoral need. Was he aware of the fact that his government, since 2014, has from time to time been toying with the idea of levying inheritance tax? Only a naïve would feel that he is oblivious of this fact. How could such a proposal be even discussed without his consent in a centralised system of governance?

Ostensibly, disturbed by comparatively low polling in the first phase and claims of reports unfavourable to the BJP, he singularly targeted the Congress as a strategy to prepare solid ground for the subsequent phases of election. “”Congress loots people even after death. The advisor (Pitroda) to the prince (read Rahul Gandhi) of the Congress royal family has said that the middle class should be taxed more. Now they have gone further ahead. Now the Congress is saying that it will impose an inheritance tax, and tax the share received by people from their parents,” he said at an election rally.

Little did he realise that his government and party’s stand stood at variance to what he articulated in his election speeches on the issue. Perhaps, either he forgot or was unaware that the inheritance tax issue had been repeatedly discussed by the finance ministry since 2014 when Mr Modi came to power at the Centre.

The then Minister of State for finance Jayant Sinha was a strong supporter of the idea and had even argued for imposing 55 per cent inheritance tax as a measure to mop of economic resources. Was he talking on his own without the permission of either Prime Minister or an equally strong Finance Minister and his immediate boss late Arun Jaitley? There are claims to the effect that the Modi government had planned to re-introduce inheritance tax in 2017 but could not do so in view of stiff resistance from ruling quarters as well as the opposition.

Mr Sinha’s idea of taxing inheritance wealth had in fact received immediate backing from Amit Malviya, the national convenor of the IT cell of the BJP. In a tweet on November 10, 2014, Mr Malviya, who heads a well-oiled army of trolls- had said, “I am all for Jayant Sinha’s idea of levying inheritance tax.” He deleted his old post supporting inheritance tax after coming under attack and being termed as hypocritical on the issue particularly by the Congress leaders as the Pitroda controversy broke out.

This was preceded by Mr Malviya strongly criticising Mr Pitroda’s remarks on inheritance tax. “Congress has decided to destroy India. Now, Sam Pitroda advocated 50 percent of whatever we build, with all out hard work and enterprise, will be taken away……..” Little did he realise that Mr Sinha had proposed 55 per cent threshold for inheritance tax which he (Mr Malviya) himself had lauded.

In an interesting turn of events Prime Minister Modi launched an offensive over this issue, ignoring his own Government’s earlier proposals and BJP IT cell chief’s strong advocacy of inheritance tax. The idea had earlier received support from a leading columnist, R Jagannathan, who is known for positive disposition towards ruling dispensation’s policies and programmes.

“Inheritance Tax Is An Idea Whose Time has Come…….” Screamed the headlines of his article published on July 4, 2019, in Times of India, after Modi-02 took reins of power.

Yes, the BJP seized the opportunity to link Mr Pitroda’s idea to often talked about idea of redistribution of wealth as articulated by the Congress president Mallikarjun Kharge and Rahul Gandhi before and during the elections. That leads to a question: Does the Congress manifesto promise to redistribute wealth?

The party’s manifesto makes several observations regarding income inequality, India’s wealth, people belonging to economically weaker sections, and the allocation of Government land and resources.

It talks about conducting a nationwide Socio-Economic and Caste Census to enumerate the castes and sub-castes and their socio-economic conditions. And also mentions that economic empowerment of minorities is a necessary step to realise the country’s full potential.

Nowhere in the manifesto the Congress has claimed, contrary to what BJP leaders have ascribed to, that it will seize the wealth from the rich and distribute it among poor. This is notwithstanding the fact that the idea of inheritance had also been debated during UPA-rule by the then Finance Minister P Chidambaram.

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