- Sabeer Bhatia proposed a 55% inheritance tax for India to boost competition and opportunity
- He argued wealth should come from talent and effort, not inheritance
- India abolished estate duty in 1985, which once had rates up to 85%
Hotmail co-founder Sabeer Bhatia has suggested that India consider introducing a 55% inheritance tax, arguing that economic opportunities should be determined by what individuals build through their talent and effort rather than by the wealth they inherit.
Bhatia posted on X, saying "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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According to Bhatia's argument, a higher inheritance tax could help create competition and opportunities while encouraging greater emphasis on individual achievement and entrepreneurship. Responding to criticism of his proposal on social media, he said parents should focus on providing children with education, values and the tools needed to succeed rather than leaving them substantial wealth, which he argued could weaken them.
India currently does not have an inheritance tax. However, the country previously imposed an estate duty under the Estate Duty Act, 1953. The tax applied to property transferred following a person's death, with the taxable amount determined after applicable exemptions.
The top rate of estate duty reached 85% before the tax was abolished in 1985 during the tenure of Prime Minister Rajiv Gandhi. The government had cited factors including limited revenue collection and high administrative costs.
Bhatia's proposal has prompted mixed reactions on X, with some users supporting the idea and others opposing it.
Bhatia, an Indian-origin entrepreneur, studied at BITS Pilani, the California Institute of Technology and Stanford University. He co-founded Hotmail with Jack Smith in 1996. Microsoft acquired the email service in 1997 in a deal reportedly valued at $400 million.
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He later founded or was associated with ventures including Arzoo, Sabse Technologies, AMP Technologies and ShowReel.
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