Row over Sam Pitroda’s ‘inheritance tax’ remarks

Senior Congress leader and the grand old party's chairperson of overseas operations Sam Pitroda has ignited controversy with his recent remarks on "inheritance tax", saying the idea could be explored in the context of its successful implementation in the US.

Pitroda, in an interview in Chicago, said the US has an "interesting law", also known as "inheritance tax", which mandates the transfer of 55% of the wealth of an individual to the government, and that India does not have any such law.

"In America, there is an inheritance tax. If one has $100 million worth of wealth and when he dies he can only transfer probably 45% to his children, 55% 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 the public, not all of it, half of it, which to me sounds fair," says Pitroda during an interview.

He adds: "In India, you don't have that. If somebody is worth 10 billion and he dies, his children get 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."

The remarks from the senior Congress leader were not taken in good stead as the election fever in India reached a new high and as the country gears up for phase 2 of LS polls on April 26. The ruling BJP was quick enough to bash Pitroda's remarks, with the PM slamming the party during a political rally in Chhattisgarh. "Now these people (Congress) have a gone a step further. The Congress party says it'll implement an inheritance tax. They will implement a tax on your hard-earned property of yours and your children won't get it. In fact, the Congress party intends to take it away from you. Congress has a mantra: Congress Ki Loot, Zindagi Ke Saath Bhi, Zindagi Ke Baad Bhi."

Amid the political firestorm, other BJP leaders also jumped to cash in on the controversy. Delhi BJP chief Virendra Sachdeva said: "Sam Pitroda's statement and Congress party's manifesto are a conspiracy to divide India. This reflects Congress' mindset. Whom do they want to please?"

Sharing the interview video, BJP spokesperson Shehzad Jai Hind says Congress, through Sam Pitroda the closest aide of the Gandhi Vadra family, was essentially saying that 55% of what people earn will be taken away on your death. "If you are a farmer- 55% of your land will be taken...If you are a businessman - 55% of your business will be taken..55% of your savings you kept for your children..Ironically Gandhis built a huge treasury for their own children & son in law but they want to grab your hard earned tax payed (paid) resources."

Reacting to the controversy being created, Pitroda took to X to say that the PM's comments (on) mangal sutra and gold snatching are "unreal". "It is unfortunate that what I said as an individual on inheritance tax in the US is twisted by Godi media to divert attention from what lies PM is spreading about Congress manifesto. PM’s comments Mangal Sutra & gold snatching is simply unreal," says Pitroda.

He clarified that he mentioned US inheritance tax in the US only as an example in his normal conversation on TV. "Can I not mention facts? I said these are the kind of issues people will have to discuss and debate. This has nothing to do with the policy of any party including Congress."

Reacting to the allegations of a 55% inheritance tax being proposed by the government, he said: "Who said 55% will be taken away? Who said something like this should be done in India? Why is the BJP and media in panic?"

Coming to his defence, senior Congress leader Jairam Ramesh said the Congress party had no plans whatsoever to introduce an inheritance tax. "In fact, Prime Minister Rajiv Gandhi abolished Estate Duty in 1985. But it is the Modi Sarkar that has wanted to do so!...," he said on X.

Inheritance tax in the US

Inheritance tax is a state levy in the US, which is imposed on an individual receiving assets as part of inheritance, with the tax rate depending on the relation of the deceased with the beneficiary. Only six states -- Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania -- impose inheritance tax in the US, while the federal government has no such provision. The federal government's estate tax, however, touch upon the similar territory, though it's levied on the estate of the deceased.