Hotmail co-founder Sabeer Bhatia got the Internet talking with his recent controversial suggestion for a 55% inheritance tax, arguing that opportunities should be based on what individuals build.
“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 on Saturday.
The post sparked intense social media chatter, with critics debating the proposal’s viability and warning it would squeeze middle-class pockets. Reacting to the comments, Bhatia has reiterated his proposal to clarify his stance, saying the massive tax would impact only the super-wealthy.
Also Read | Hotmail’s Sabeer Bhatiya suggests 55% inheritance tax for IndiaWhat were concerns of social media users?
“I simply don’t agree. Now, what was built by your father or grandfather should be distributed. Why, it is not the person who has worked hard. The whole family worked hard to earn that status. Wealth distribution is a bizarre suggestion. You may come forward and distribute yours,” a user said.
Another added, “It won’t affect the wealthy. They operate the money through trusts, which are protected from any kind of taxation worldwide or debt. So it will, in the end, affect those small farmers who own agricultural land and have it further divided amongst their sons. Govt helps rich.”
“You trust politicians with your 55% wealth locked in companies, which instantly becomes state-controlled once a major shareholder dies? Scheme to make India communist in one fell swoop,” another user commented.
“Imagine imposing inheritance tax on the people who invested earlier for their next generations while sacrificing their own Lifestyles..just because some people burnt all the money they made in their rich lifestyle and built no assets,” a user noted.
Also Read | Family funded your home purchase? Why the bank trail matters for taxWhat did Sabeer Bhatia say in support of inheritance tax?
Late on Tuesday, Bhatia backed his proposal of inheritance tax, saying it would only hit the top 2-3% of the super-wealthy who control disproportionate assets, leaving 97-98% unaffected.
He argued that India’s wealth must generate opportunities for all citizens rather than remain locked in family dynasties, addressing high wealth inequality in which a small elite holds outsized resources.
“A 55% inheritance tax won’t affect 97–98% of Indians. It will primarily affect the super-wealthy top 2–3% who control a disproportionate share of the country’s wealth and resources,” he wrote.
“India’s wealth should create opportunity for all its citizens-not become permanently concentrated in a handful of family dynasties,” he added.
In the comments section, 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 said.
Also Read | South Korea proposes inheritance tax overhaul to reduce burdenWhat is difference between inheritance tax and estate tax?
An inheritance tax is a charge paid by a person who inherits money or property from a deceased person, whereas an estate tax is a levy on the estate, including money and property, of a deceased individual.
Inheritance taxes vary widely across the world, where they are 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.
India currently has no inheritance tax.