Hotmail co-founder Sabeer Bhatia has reiterated his demand for a 55% inheritance tax in India, stating that this would be mostly a measure for the wealthier families and not for the common people. His remarks have sparked a social media debate about whether or not all money should be taxed, even that which is inherited.
The discussion started with Bhatia in an X post on 26 September stating that “India needs to adopt a 55% inheritance tax if it is to become a “truly competitive nation ‘.”. He said it is not the only thing they have inherited that they should depend on, but rather what they have created.
Recently, Bhatia also stated that leaving behind properties and assets may do the opposite for children, as it may remove the hunger, resilience and motivation that propels anyone to success.
Bhatia Had Said Tax Would Mainly Affect the Super-Wealthy
Later Bhatia clarified his views on X and continued the debate. A 55% inheritance tax would not impact 97–98% of Indians and would mainly impact the top 2–3% of the population who own a disproportionate share of wealth and resources.
He also said that wealth should be used as a means to open doors to more people than to a few family dynasties. Bhatia added that parents should impart education and values to their kids rather than any substantial amount of wealth. There is no inheritance tax in India at present. There was once Estate Duty which was introduced in 1953, but also got abolished in 1985.
In support of his argument, Bhatia wrote
“Inheritance tax asks an uncomfortable question: Why should being born to rich parents be one of the greatest economic advantages in life?
You don’t fight poverty by handing out fish, and you don’t create meritocracy by handing out fortunes.
Teach people to fish. Build opportunity. Stop pretending inheritance is achievement.” Bhatia wrote on his Twitter
Does India have Inheritance Tax at the moment?
No, India currently does not have a general inheritance tax simply because someone inherited money or property. However, inherited assets can create other tax consequences, particularly when you later sell them.
Social Media Is Split Over the Proposal
After listening to Bhatia’s opinion on Inheritance tax, a curiosity comes to mind: Is Sabeer Bhatia open to the idea that his children will get his inheritance after paying 95% tax!
Bhatia’s remarks have garnered significant attention on X and Reddit. Some praised the notion, saying that huge inheritances can exacerbate wealth gaps.
Others were against it, arguing that a family should be allowed to pass on assets it had accumulated over the years. Some critics also raised the possibility that rich families might use a trust or some other arrangement to sidestep such a tax. Others said that if the government does not establish high thresholds, the impact may affect not only billionaires.
Thus, the debate is not just about Bhatia’s suggested 55%. It poses a bigger question as to whether wealth bequeathed to heirs should be held to different standards than income generated from labor and enterprise and where India should draw that line.