Estate planning: How to navigate tax implications of inherited assets
Inheriting property and assets can be a pivotal moment for an individual in their financial journey. Whether it is a family home, real estate, or any other valuable property, it is a warm reminder that you are a loved and important person for someone to leave behind something. What may sour this feeling is the tax implications that may occur once you have received it.
Therefore, it has become crucial to comprehend the tax liabilities of the inherited assets in a bid to efficiently conduct estate planning. Moreover, several people among us have the misconception that estate planning is something to be thought of after retirement. However, one should know that the right time for estate planning is now.
When family members rely on the income from inherited assets for their survival, development, and prosperity, this becomes much more crucial. Estate planning should be done as early in life as possible to guarantee the financial stability of one's family in the event of one's death or an unanticipated disaster or event. It is never too late or too early to do this, and therefore the right time is now. Moreover, one crucial aspect of estate planning is also planning for tax implications.
Several countries, such as the USA, UK, Germany, and more, have tax codes related to the inheritance of assets. However, regarding India, let us clear up a misconception that many people have. In our country, we do not have to pay any inheritance taxes, and in fact, the law was abolished in 1985. Therefore, you do not have to worry about the inheritance tax while estate planning. However, the absence of this tax does not mean there are no other tax implications.
Whenever there is a situation of the inheritance of an asset, relevant taxes
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