Hotmail’s Sabeer Bhatiya suggests 55% inheritance tax to make India a ‘truly competitive nation’; what the levy means
Hotmail co-founder Sabeer Bhatia has called for India to consider a 55% inheritance tax, arguing that opportunities should be based on what individuals build rather than what they inherit from their family members.
“If India wants to become a truly competitive nation, it should consider a 55% inheritance tax. Opportunity should come from what you build-not simply from what you inherit,” he said in a X (formerly Twitter) post on Saturday.
What is inheritance tax?
An inheritance tax is a charge paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate, including money and property, of a deceased individual.
Inheritance taxes vary widely in different parts of the world (where it is applicable). Depending on how a country structures the tax, it can be charged on the estate before assets are transferred or on what the beneficiaries receive.
Did India ever have an inheritance tax?
India currently has no inheritance tax.
However, the country had an inheritance-related tax regime in place for several decades under the Estate Duty Act, 1953. The tax was levied on property transferred after a person’s death, with the amount determined by the value of the estate above the exemption threshold of ₹1.5 lakh.
Estate duty rates in India were among the highest, with the top rate reaching 85%. The levy was introduced with a broader aim to narrow income disparity among people, but the government eventually abolished it in 1985 during Rajiv Gandhi’s tenure as prime minister.
How did X users react to Bhatia’s post?
Bhatia’s post quickly became viral on the social media platform. While many users did not agree with his suggestion, others supported the idea and shared their own views on why they believe such a tax may be needed in India.
An user wrote: “You mean that parents who have been building for their kids all their lives must give half to the government? The government is not my kid. What problem is this solving?”
Responding to that remark, Bhatia asserted that parents should not make their kids weak by building for them. “You give them the tools to succeed, like education and good values. You don’t give them wealth. You weaken them when you give them wealth,” he added.
Another person supported his suggestion, stating that: “In an ideal world there shouldn’t be any inheritance of any material kind except knowledge and values. Everyone should start from the same ground zero. But even if it is allowed for motivation then also it should be limited to type of inheritance or limited like you mentioned. Either only non-liquid assets should be allowed or limited to as you said to some percentage.”
Who is Sabeer Bhatia?
Bhatia is an Indian-origin entrepreneur who attended BITS Pilani before moving to the United States in 1988.
He went on to study at the California Institute of Technology (Caltech) and later completed a master’s degree in electrical engineering at Stanford University.
His most prominent venture came in 1996, when he teamed up with Jack Smith to launch Hotmail. The web-based email service became popular, leading Microsoft to acquire it in 1997 in a deal reportedly valued at $400 million.
Bhatia subsequently moved into other areas of technology and entrepreneurship. He founded Arzoo, an online travel platform, and Sabse Technologies, which focused on communications. He also started AMP Technologies, a cloud enterprise software company.
In 2021, Bhatia launched ShowReel, a video-based platform aimed at connecting people who are seeking employment and employers.
