Death Duty

 

When Shri Nathji arrived in Mussoorie after Mateshwariji left her physical frame in London, he had to handle legal issues. Mateshwari’s property, Savitri Nivas, had to be mutated in the name of Pran Nath and Priya Nath and a death duty had to be paid. It was an oppressive taxation coming at a time when a person was already in grief. In later years this oppressive duty was abolished by the government. However Shri Nathji suffered it to be paid like all the rest of the people in the country even though it took many months of bureaucratic delays before the mutation was made.

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In India, the "death duty" was known as Estate Duty, which was a tax levied on the total value of a deceased person's property before it was distributed to the heirs. This tax was in effect from 1953 until it was officially abolished in 1985.

The tax was implemented under the Estate Duty Act, 1953.

It was charged on the principal value of all movable and immovable property (including agricultural land) owned by the deceased, whether situated in India or outside (if the deceased was domiciled in India).

The rates were progressive, starting at 7.5% for properties valued at around Rs. 1 lakh and reaching as high as 85% for estates valued over Rs. 20 lakh..

 The duty was paid by the estate of the deceased before the assets were distributed to the beneficiaries. The Estate Duty was abolished in 1985 by the then Finance Minister V.P. Singh due to several reasons like High Administrative Costs:of assessment and collection was disproportionately high compared to the actual revenue generated. The tax collection was minimal (only about Rs. 20 crore in 1984-85), representing a negligible fraction of the total direct tax revenue. Also the complex valuation rules and administrative procedures led to extensive litigation and harassment of taxpayers. It was often viewed as a form of double taxation, as the assets had already been subject to wealth tax and income tax during the owner's lifetime.