Inheritance Tax in India

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The general perception is that there are no inheritance taxes or estate duties or death taxes in India.

The Estate Duty Act, 1953 was abolished (technically suspended, not repealed) in 1985 meaning that there is no estate tax at the central government level.

However, the perception that there are no inheritance taxes in India is not absolutely correct. A number of States in India levy court fees on executors / beneficiaries of the deceased’s estate to obtain

(A) a probate of will or

(B) letters of administration with or without will annexed or

(C) a succession certificate under Part X of the Indian Succession Act, 1925 or

(D) heirship certificate under the Regulation of Bombay Code VIII of 1827.

All the above documents are basically instruments to obtain the legal ownership of the estate of the deceased by the executors / beneficiaries.

The court fees are levied in accordance with Acts / Rules framed by every State in India.

In the State of Gujarat at present the court fees are levied under the Gujarat Court Fees Act, 2004. The minimum rate is 2% on estates of value or amount exceeding Rs 1000 and the peak rate is 7.50% on estates of value or amount exceeding Rs 3,00,000/- subject to a maximum levy of Rs. 75,000/-.

Though not exactly comparable with Inheritance taxes in the USA or UK,

Whilst the law distinguishes between an estate tax and an inheritance tax—an estate tax is assessed on the assets of the deceased, while an inheritance tax is assessed on the legacies received by the estate’s beneficiaries. However, this distinction is not always observed and both terms are often used interchangeably.

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