Exploring the Potential of Inheritance Tax in India: Lessons from Global Practices and Implications for Economic Equality

Abstract

This research paper explores the potential reintroduction of inheritance tax in India, examining its possible impact on economic equality and comparing it with global practices. The study aims to understand how inheritance tax can serve as a tool for wealth redistribution, reduce income inequality, and contribute to government revenue. By analyzing the inheritance tax systems of countries such as the United Kingdom, Japan, and South Korea, the paper identifies key features and outcomes that could inform policy design in India.

The methodology involves a comparative analysis of international inheritance tax regimes, focusing on their rates, structures, and socio-economic effects. Data is gathered from academic literature, government reports, and economic indicators to provide a comprehensive overview of how inheritance tax operates in different contexts. Case studies of selected countries illustrate the tax's role in addressing wealth concentration and funding public services.

Key findings reveal that inheritance tax can effectively contribute to reducing wealth disparity and enhancing social mobility when implemented with clear exemptions and thresholds. However, challenges such as administrative complexity and potential resistance from affluent families must be addressed. The paper concludes with policy recommendations for designing an inheritance tax framework in India that balances economic growth with social equity. Future research should explore the long-term impacts of inheritance tax on entrepreneurship and intergenerational wealth transfer in India.