There is proposal at
present to reimpose the Estate Tax again.
The Estate duty was abolished for the following reasons:
(i) The contribution of estate duty to the Government revenues over the
years had been insignificant.
(ii) Percentage of estate duty to gross tax revenue was steadily
falling. It was 0.22 percent in 1972-73, 0.5 percent in 1975-76 and 0.13
percent in 1981-82.
(iii) The proceeds of estate duty were low despite an extremely
progressive rate schedule.
(iv) The cost of administration of the Estate Duty Act, 1953 and the
cost of compliance to the tax payer was high.
(v) Both wealth-tax and estate duty lows were applicable to the property
of a person, the former applying to his property before death and the
latter after his death. The existence of two separate laws with
reference to the same property was considered a burden on the taxpayers
and the heirs of the deceased.
This was stated by the Finance Minister Shri P. Chidambaram in reply to
a question in the Rajya Sabha today.
* * *