Indian Property Inheritance
As an NRI you can inherit any number of properties including agricultural land and farm house in India from a resident Indian. Use our online contact form for a free assessment of your case today.
NRI Indian Property Inheritance
A Non-Resident Indian or a Foreign national such as UK, US or Canadian citizens can inherit the property in India from anyone including their relatives. The NRI can inherit property in India even from another NRI, subject to certain conditions. An NRI or OCI can inherit any immovable property (such as land or buildings) in India, whether it is residential or commercial. They can even inherit agricultural land or a farmhouse, which they are otherwise not entitled to acquire by way of purchase.
Governing Law for NRI Inheritance Claims
The Indian Succession Act seeks to consolidate all Indian Laws relating to succession. It applies to the succession of property whether there is a will or not. Further Inheritance laws apply depending on the religion, such as Hindu, Muslims, Jains, Sikhs and Buddhists.
The Hindu Succession Act, 1956 governs non-testamentary or intestate inheritance for Hindus, Jains, Sikhs and Buddhists; For Muslims, for non-testamentary succession The Muslim Personal Law Application Act, 1937 applies.
In the case of a foreign citizen who inherits property from an Indian, the respective law of the latter’s region will apply in that case.
For example – A UK Citizen inheriting property in India being a Sikh male and dying without leaving a will would cause his property to be divided equally amongst his sons, daughters, widow, mother and specified heirs of predeceased sons or daughters (otherwise known as the Class 1 heirs).
How do NRIs inherit Indian property?
Without the proper documentation, an Inheritance matter can become quite complex. The procedure of inheritance will depend on the circumstances and documentation of the NRI(s) inheriting the moveable and/or immovable property. Broadly speaking, NRIs or foreign nationals such as UK, US or Canadian citizens can inherit a property in India in one of the following three ways:
By way of will
- NRIs can transfer the property to other NRIs by making a Will during their lifetime. Upon the demise of the NRI, the relevant shares in the properties are distributed amongst the legal heirs according to the Will.
- A certified copy of the can be obtained from the District Registrar only if the Will was registered.
- Once the legal ownership of an heir for a property is confirmed, you can apply to transfer the title of the property title.
- In a situation where there are multiple legal heirs, a no-objection certificate will be needed from all concerned parties.
- If an NRI dies intestate, i.e. without a Will, then the inheritance process may become more complicated. In this case, the property passes by inheritance as per the personal law of the deceased. This procedure requires several documents including the death certificate of the relative, birth certificate, purchase deed, registration documents, bank documents, etc. in order to prove a rightful claim to the property in question.
- Providing all the legal heirs agree, they will give an affidavit declaring that they are the legal heirs.
- And according to the number of legal heirs shares will be divided accordingly.
- Submit an application with the death certificate and legal heir certificate (issued by the local council) in the revenue department or the relevant bank if there is no dispute.
- For banks, a succession certificate must be applied.
By way of gift
- An Indian resident can transfer their property by way of a gift deed to an NRI residing outside India.
- Transfer of property by way of gift deed is not taxable.
- Agricultural land and farmhouse cannot be gifted to a person residing outside India. Therefore, NRIs cannot receive agricultural land as a gift.
Important points when inheriting property in India
- Before making a claim, all debts relating to the said property must be cleared.
- A will may be challenged on the grounds that a person has been left out of the will.
- Depending on the circumstances, for partition of property, there will be a partition deed or family settlement deciding the shares.
- Another application for partition must be made to the revenue department.
- In the case of one single property, all legal heirs can agree to sell their property jointly.
- A legal heir certificate is different from a succession certificate, a succession certificate is generally issued by the civil court and there are separate procedures to obtain the same.
Can an NRI claim Indian inheritance from the UK, USA, or anywhere else abroad?
In case an NRI is outside of India and unable to travel, they may give a Power of Attorney to their siblings to undertake the procedure as mentioned above on their behalf. In this manner, NRIs can claim their inheritance without visiting India.
What can an NRI do with Inherited property?
NRIs can decide to keep their inherited property and continue ownership under their name. No tax shall be payable at the instance of inheritance, however, if you decide to rent out the property then some taxes may be applicable.
Alternatively, an NRI can decide to sell their inherited property in India. Different rules and taxes shall apply based on who is buying the NRI property (i.e. Indian national or another NRI) and what is the type of property.
An NRI can sell their inherited agricultural land in India only to Indian nationals and not other NRIs or foreign nationals.
What taxes are paid by an NRI at the time of inheritance?
No tax is payable by NRIs, PIOs, or foreign citizens at the time of inheritance. However, if the NRI decides to sell the property or accrues some kind of income from it, Income Tax may apply accordingly. An NRI may also be subject to tax in his home country if the countries have not signed a Double Tax Avoidance Agreement (“DTAA”). Currently, India has DTAA with 88 countries, including the US, UK, China, UAE, Singapore, etc.
NRI Inheritance Claim: How the WF Team can help
Our team offers professional legal advice in relation to NRI inheritance claims. We also offer representation in certain select areas of India. To find out more, contact our team on 02087575751 or use our free assessment form and a member of our team will get in touch with you.
If you have any questions regarding any of our services, feel to reach out to our team.