Zerodha co-founder and billionaire Nikhil Kamath had in a 2022 interview with the Mint voiced support for inheritance tax as a tool for wealth distribution to the poorer people. Amid the raging debate surrounding inheritance tax -- after Congress leader Sam Pitroda on Wednesday called it "an interesting idea" -- Kamath's video is currently being widely circulated on social media.
"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," he told Mint.
"For a country like India, where three percent of the population pays income tax, the wealth is not necessarily with the three percent alone, it's with a much broader diaspora of the population. Something like an inheritance tax will bring more people under the tax net."
Nikhil Kamath added that when extremely affluent people pay inheritance tax, it would give the government a "certain amount of gunpowder" to carry out necessary reforms.
The 37-year-old, whose net worth estimated by Forbes is about $3.45 billion, is also a member of the 'The Giving Pledge' founded by legendary investors Bill Gates and Warren Buffet. Members of this charitable foundation contribute a majority of their wealth to philanthropic causes.
Kamath plans to contribute to climate change, energy, education, and health. This is in addition to his foundation, Young Indian Philanthropic Pledge (YIPP) which collaborates with leaders from the startup ecosystem to give away at least 25 percent of their net worth to philanthropic causes.
What is the inheritance tax controversy?
The row surrounding inheritance tax was triggered after the Indian Overseas Congress chairman Sam Pitroda on Wednesday called it an "interesting idea".
“If one has $100 million worth of wealth and when he dies he can only transfer probably 45 percent to his children, 55 percent 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 public, not all of it, half of it, which to me sounds fair," Pitroda said.
He added that India does not have such a provision. “If somebody is worth Rs 10 billion and he dies, his children get Rs 10 billion and the public gets nothing ... So these are the kind of issues people will have to debate and discuss. I don't know what the conclusion would be at the end of the day but when we talk about redistributing wealth, we are talking about new policies and new programs that are in the interest of the people and not in the interest of super-rich only."
Pitroda's remarks have added further fuel to the raging wealth distribution debate. Prime Minister Narendra Modi and Union home minister Amit Shah launched an all out attack on Congress over Pitroda's remarks, saying that the party's "dangerous intentions" have come to fore yet again. Using LIC's popular tagline, PM Modi said that Congress's motto is: "Congress ki loot, zindagi ke saath bhi, zindagi ke baad bhi".
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