A finance ministry official said a stable government that does not shy away from making bold decisions, especially for the public good, is well placed to experiment with an inheritance tax. While officials find a compelling case for an inheritance tax after facing a shortfall in tax collections in FY19, there are equally compelling reasons against it. It is easier to say, ‘tax the rich’ but difficult to implement," a second official said on condition of anonymity. The other challenge is that people will tend to hold their assets under trusts, which are perpetual in nature, to avoid paying an estate tax. Discussions on an inheritance tax had taken place in the government earlier too, but it was not implemented.

Source: Mint July 02, 2019 18:00 UTC