Letters: Taxing inheritance

Apropos the editorial “Bequest tax worries”(November 15), the abolition of estate duty was necessitated by poor collection of revenues, and relatively high collection expense. But if the basic objective behind such an inheritance tax is reducing wealth inequality, it cannot be faulted. Making the rich pay more is easy, but as we have seen, it results in more tax-evasion. In this context, the suggestion made in the editorial to introduce exempt-exempt-tax scheme may be appropriate. But is the income tax (I-T)administration machinery equipped? A common experience is that the I-T officers are not able to use even the available data. As an alternative to estate duty, it may be possible to charge income tax from inherited property at a rate, say 20 per cent, higher than normal tax. But again, databases of the I-T offices need to be effectively utilised.

Narendra M Apte Pune

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