Hotmail Co-Founder Sabeer Bhatia Suggests 55% Inheritance Tax For India: What It Means

Hotmail co-founder Sabeer Bhatia has suggested that India should consider a 55% inheritance tax to become a more competitive nation. In a post on X, he said that opportunities should come from what people build themselves rather than simply from what they inherit.

Bhatia wrote, “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.”

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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.

— Sabeer Bhatia (@sabeer) September 26, 2026

So, a 55% inheritance tax would mean that 55% of the inherited property would be paid to the government as tax, while the remaining 45% would stay with the concerned family.

What Is Inheritance Tax?

Inheritance tax is a tax levied when someone's property is transferred to their children. In simple words, it is a tax on the division of a person's property after their death. After the property is divided, some part of it has to be paid to the government by the concerned family as tax.

An inheritance tax law existed in India until former Prime Minister Rajiv Gandhi scrapped it in 1985. Estate Duty was a form of tax calculated at the time of a person's death. It was introduced through the Estate Duty Act, 1953.

The tax was payable only if the total value of the inherited portion of the property exceeded the exclusion limit. In India, the tax rate on properties was set as high as 85%. Properties worth at least Rs 1.5 lakh were taxed at a rate of 7.5%.

The objective of the tax was to narrow income disparity. However, the law was scrapped in 1985.