loader

Disclaimer

The Bar Council of India does not permit advertisement or solicitation by advocates in any form or manner. By accessing this website, www.khaitanco.com, you acknowledge and confirm that you are seeking information relating to Khaitan & Co of your own accord and that there has been no form of solicitation, advertisement or inducement by Khaitan & Co or its members. The content of this website is for informational purposes only and should not be interpreted as soliciting or advertisement. No material/information provided on this website should be construed as legal advice. Khaitan & Co shall not be liable for consequences of any action taken by relying on the material/information provided on this website. The contents of this website are the intellectual property of Khaitan & Co.

Please accept the above
Close

Search

See all results for ""

Much ADO About Nothing? An Update on Estate Duty Being Re-Introduced in India

20-Dec-2018

Presently, India does not have an estate duty. The Estate Duty Act, 1953 which sought to impose an estate duty in India on property passing on demise was repealed in the year 1985. Is the estate duty a relic of the past? Rumours are rife that an estate duty will soon be re-introduced in India. Further, while there is no specific gift tax legislation in India today, gifts among ‘relatives’ as defined in the domestic tax legislation are exempt from taxes. Thus, the transfer of assets through testamentary or intestate succession is not subject to any tax today. That said, albeit there has been no formal statement by the Indian Government, the abolition of the Wealth Tax Act, 1957 and the amendments to tax provisions governing trusts (in 2017) have somewhere left taxpayers and tax professionals second guessing when and how the estate duty shall be reintroduced (if at all!). 

It now appears that the reintroduction of an estate duty vide a separate legislation (akin to the erstwhile 1953 Act) is unlikely in the next fiscal budget since the estate duty legislation has not been included in the list of bills sought to be discussed or introduced in the winter session of the Indian Parliament (11 December 2018 to 8 January 2019). In view of the upcoming general election in 2019, whether the Indian Government shall employ the alternative approach of amending the Income Tax Act, 1961 in next year’s budget, to tax the transfer of assets received by way of inheritance, is unknown. 

What is interesting to note is that despite speculation that the reintroduction of an estate duty (applicable in countries such as the United States, United Kingdom, etc.) in India is on the anvil, Indian HNIs and promoter families are largely focussed on objectives other than planning for an estate duty or inheritance tax. For instance, what has been paramount for them is to have in place a robust succession plan for their assets – both personal and business assets, asset protection – both internal (family discord) as well as external (business claims, liabilities), and mitigating disputes among heirs. This has become a noticeable trend in the realm of private client practice.

  • Bijal Ajinkya (Partner) and Aditi Sharma (Principal Associate)

For any queries please contact: editors@khaitanco.com

Bijal Ajinkya (executive_team,partners)

We have updated our Privacy Policy, which provides details of how we process your personal data and apply security measures. We will continue to communicate with you based on the information available with us. You may choose to unsubscribe from our communications at any time by clicking here.

For private circulation only

The contents of this email are for informational purposes only and for the reader’s personal non-commercial use. The views expressed are not the professional views of Khaitan & Co and do not constitute legal advice. The contents are intended, but not guaranteed, to be correct, complete, or up to date. Khaitan & Co disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident or any other cause.

© 2021 Khaitan & Co. All rights reserved.

Mumbai

One Forbes
3rd & 4th Floors, No. 1
Dr. V. B. Gandhi Marg
Fort, Mumbai 400 001

Chennai

119/65, First Floor
Dr Radhakrishnan Salai
Mylapore
Chennai 600 004,
India

Noida

Max Towers
7th & 8th Floors
Sector 16B, Noida
Gautam Buddh Nagar
201 301 India

Singapore

Ocean Financial Centre
#37-02 10 Collyer
37th Floor Quay
Raffles Place 049315,
Singapore