What is Inheritence tax : What it means to India

Inheritance tax is slang in taxation terminology. This is in practice in many countries. This tax is applicable on property/deliverable which is transferred from dead/deceased person to its heir/legal-nominee. 

This taxation is not applicable in our country as of now. In 2015 budget it is planned to put on table. Before making any note on that lets get some discussion points.

Points to identify:  

Question: By default everyone wants to pay income tax. Basically paying tax is like an expense for middle class families. So whenever a tax is forced on public. It never reacts positively. We will discuss later on why. here we will talk about this inheritance tax.

Discussion: There is a threshold value of property which is going to applicable for this tax. I have termed it as slang because in developing countries like us where we provide honeymoon tax period for almost 10 years to business-giants like Tata, Maruti, L&T. 

Now we are expecting to pay huge amount of money as tax (it may be 40% above threshold/cap) which is earned by his/her parent. On which he has already paid 30% Income tax.

Question: This is good as it will applicable only who is too wealthy. This is an idea to brought back that money to system again in flow. Is it good for even developing nation.

Discussion: India is country which is known for its culture. Here parents works for his/her family. Here for a person his/her family have always priority. He earns and save for his/her children future. This tax can't be applicable in unified way even for rich peoples. As here rich peoples are businessman. we can't put such taxation on such businessman, otherwise there values will be goes down on each inheritance. So I doubt on whom it will impact is that middle class.

My View: Rather than applying such taxation policy, Govt. should provide a transparent e-commerce system, which will monitor the locality. As if near slum there is a business, it should be taxed on all profit and that should be used directly on that slum transparently. There should be valuation of  area and taxation policy should allow flexibility for same. So based on locality each local can get best of their culture.