Indian Property Inheritance

Who Can Inherit Indian Property as an NRI?

Any Non-Resident Indian (NRI) or foreign national, including UK, US, and Canadian citizens, can inherit immovable property in India. This includes residential property, commercial property, agricultural land, and farmhouses, regardless of whether the deceased was resident in India or living abroad as an NRI.

This is one of the most important distinctions in Indian property law for NRIs: while you generally cannot purchase agricultural land or farmhouses in India, you can inherit them. An NRI can also inherit property from another NRI, subject to the conditions set out under Indian law.

Which Laws Govern NRI Inheritance?

The governing law for an NRI inheritance claim depends on the religion and domicile of the deceased. The Indian Succession Act consolidates succession law across India and applies whether or not the deceased left a will.

For specific communities, additional personal laws apply:

Hindus, Jains, Sikhs, and Buddhists: The Hindu Succession Act 1956 governs intestate (without a will) succession. Under this Act, property passes to Class 1 heirs, which include sons, daughters, widow, and mother, in equal shares.

Muslims: The Muslim Personal Law (Shariat) Application Act 1937 applies to non-testamentary succession.

Foreign citizens: Where a UK citizen inherits from an Indian national, the personal law applicable to the deceased governs the inheritance.

Example: A UK-based Hindu national whose relative dies intestate in India would find the estate divided equally amongst the Class 1 heirs including the sons, daughters, widow, mother, and specified heirs of any predeceased children.

How Does an NRI Inherit Indian Property? 

An NRI can inherit Indian property in one of three ways: by will, through intestate succession, or by gift. The procedure differs in each case, and the documentation required can be substantial, particularly where there is no will.

By Will

Where the deceased left a valid will, the property passes to named beneficiaries according to its terms.

• A certified copy of a registered will can be obtained from the District Registrar in the relevant state.
• Once legal ownership is confirmed, the beneficiary can apply to transfer the property title into their name.
• Where there are multiple legal heirs, a no-objection certificate (NOC) from all parties is required before a transfer can proceed.

Intestate Succession (Without a Will)

Where the deceased died without a will, the property passes by operation of law under the applicable personal law. This route is more complex and requires comprehensive documentation.

Required documents typically include: the death certificate of the deceased, the claimant’s birth certificate, the property purchase deed and registration documents, and bank records establishing the estate.

• Where all legal heirs agree, each provides an affidavit confirming their status as a legal heir.
• Shares are divided in accordance with the applicable personal law.
• An application is submitted, with the death certificate and legal heir certificate, to the revenue department, or to the relevant bank where financial assets are involved.
• For financial assets held in bank accounts, a succession certificate issued by the civil court is required.

By Gift

A resident Indian can transfer property to an NRI by way of a gift deed. Such transfers are not subject to gift tax. However, agricultural land and farmhouses cannot be gifted to a person residing outside India, only inherited or purchased (where purchase is permitted).

Important Considerations Before Making a Claim

Before initiating an NRI inheritance claim, there are several practical and legal matters to address.

All debts secured against the property must be cleared before ownership can transfer. A will can be challenged where a person with a rightful claim has been excluded, so it is worth taking advice before assuming the will is uncontested.

Where multiple heirs are involved, a partition deed or family settlement is typically required to agree to each person’s share. A separate application for partition may then be made to the revenue department. Where a single property is involved, all legal heirs can agree to sell it jointly and divide the proceeds.

One important distinction to note: a legal heir certificate, issued by the local municipal authority or revenue department, establishes who the legal heirs are. A succession certificate, issued by the civil court, is a separate document required to access financial assets such as bank accounts. The two serve different purposes and are obtained through different processes.

Can I Claim an Indian Inheritance from the UK?

Yes. An NRI living in the UK, US, or anywhere else abroad can claim their Indian inheritance without travelling to India. The established route is to grant a Power of Attorney (POA) to a trusted family member or representative in India, authorising them to act on your behalf throughout the process, including managing documentation, attending the revenue department, and overseeing the title transfer.

Our team can prepare and advise on Powers of Attorney for UK-based NRIs, including the notarisation and attestation requirements that apply before a POA can be used in India.

What Can an NRI Do with Inherited Property in India?

Once you have inherited Indian property, you have three main options: retain it, rent it, or sell it.

Retain the property: You can keep the property in your name. No tax is payable at the point of inheritance itself.

Rent the property: You can rent out your inherited property and receive rental income. Income tax in India will apply to rental income received by an NRI, and your obligations in the UK should also be considered.

Sell the property: You can sell your inherited property, subject to capital gains tax rules. The applicable rules differ depending on whether the buyer is an Indian national or another NRI. One key restriction applies: inherited agricultural land can only be sold to Indian nationals, sales to other NRIs or foreign nationals are not permitted under Indian law.

What Taxes Apply to NRI Inheritance in India?

No tax is payable by an NRI, PIO, or foreign citizen at the point of inheriting property in India. Tax obligations arise only once the inherited property generates income or is sold.

If the inherited property is rented out, Indian income tax applies to the rental income. If it is sold, capital gains tax will apply in India based on the holding period and the type of property.

NRIs may also have tax obligations in their country of residence. Where India has a Double Taxation Avoidance Agreement (DTAA) with that country, the NRI will not be taxed twice on the same income or gain. India currently has DTAA arrangements with 88 countries, including the UK, US, UAE, China, and Singapore.

How Whytecroft Ford Can Help

Our team provides professional legal advice on NRI inheritance claims in India. We advise UK-based NRIs and foreign nationals on which succession law applies to their situation, what documentation is required to establish a valid claim, and how the title transfer process works in practice.

To discuss your inheritance situation, contact our team on 0208 757 5751 or complete our Contact Form and a member of our team will be in touch.

Related Links

• Civil Litigation in India
• Transfer of property in India
• Indian Property disputes
• Sell property in India 
• Indian Power of Attorney Service
• OCI Application 
• PAN Application