Inheriting Property in India as an NRI: From Death Certificate to Money in Your Account

India has no inheritance tax. The property itself passes to you tax-free. What it costs is time and paperwork: government records that still name the deceased, courts that move at their own pace, and a repatriation process with its own forms. This guide covers the full sequence: establishing your right, mutating the records, selling if you choose to, and moving the proceeds abroad.

What an NRI can inherit

An NRI or OCI can inherit any immovable property in India: residential, commercial, even agricultural land, plantation property and farmhouses. This is the one route by which an NRI can hold farmland, since FEMA bars buying it. You can inherit from a resident, and from another NRI or OCI if that person acquired the property in line with the foreign exchange rules in force at the time. No RBI permission is needed for inheritance from a resident.

Step one: establish your right with the correct document

Three documents get confused. They do different jobs.

Legal heir certificate. Issued by the local revenue office or municipal authority. It lists the heirs of the deceased. It is the workhorse document for mutation of immovable property, transfer of utilities and routine claims. Cheap, faster than court, and enough for most property record work where there is no dispute and no will.

Succession certificate. Issued by a civil court under the Indian Succession Act, 1925. It covers debts and securities: bank balances, shares, deposits. It does not cover immovable property. People apply for it believing it transfers a flat. It does not. You need it for the deceased's financial assets, not for the house.

Probate. A court order validating a will. Under the Indian Succession Act, probate is mandatory for wills covering immovable property in the old presidency towns: Mumbai, Chennai and Kolkata. In most other states, including Karnataka, Telangana and Delhi, probate is not compulsory, though banks and buyers often ask for it when stakes are high. If there is a will and the property sits in Mumbai, budget for probate from day one. Court fees scale with estate value and timelines run months to years.

No will at all? Intestate succession law applies: the Hindu Succession Act for Hindus, the Indian Succession Act for Christians and Parsis, and personal law for Muslims. The heirs take defined shares. Where heirs agree, a registered family settlement or release deed can consolidate the property in one name and prevent disputes a decade later.

Step two: mutation, the step everyone delays

Your ownership arises on death. The government's records do not know that. Mutation updates the municipal and revenue records: the khata in Bangalore, the property card in Mumbai, the 7/12 extract for land in Maharashtra.

File with the local authority: death certificate, proof of heirship or the probated will, your ID and the property tax receipts. Until mutation completes, property tax bills go to a dead person, utility transfers stall, and no serious buyer will close. Unmutated property is also the soft target for fraud: fake heirs, forged GPAs and encroachment thrive where records are stale. Do mutation in the first year. The queue does not shorten.

Step three: selling inherited property

Two tax facts decide your bill:

  1. Your cost is the previous owner's cost. The cost of acquisition carries over from the person you inherited from, with the relevant indexation or rate rules applied.
  2. The holding period carries over too. The period the deceased held the property counts toward your holding period. A flat your father bought in 1998 is a long-term asset in your hands the day you inherit it, even if you sell within a month.

Long-term gains on property are taxed at 12.5% without indexation for transfers after 23 July 2024, plus surcharge and cess. Your buyer must deduct TDS under Section 195 on the gross sale price because you are an NRI seller: apply for a lower deduction certificate under Section 197 before signing, or watch a large slice of your money sit with the tax department until refund. Full mechanics in our NRI buying and selling guide.

If you inherited agricultural land, note that you cannot sell it to another NRI. The buyer must be a resident Indian.

Step four: repatriating the proceeds

Sale money lands in your NRO account. Inherited property proceeds move abroad under the USD 1 million scheme: up to USD 1 million per financial year, April to March, across all your NRO remittances combined.

The process: pay or provision for Indian tax, get Form 15CB certified by a CA, file Form 15CA, and submit both to your bank with the sale deed, the inheritance documents and the death certificate. Amounts above USD 1 million in one year need RBI approval, so large estates plan sales across financial years. The two-property repatriation cap that applies to foreign-funded purchases does not apply here: inherited property runs through the USD 1 million route regardless of count.

Check your resident country's side too. The US taxes your worldwide gain with foreign tax credit relief, and inheritances above USD 100,000 from a foreign person trigger Form 3520 reporting.

Or keep it: the rented-flat option

Selling inherited property in a hurry is how families lock in bad prices. The alternative is to hold it, rent it and decide with time. That requires someone in India who is accountable to you: not a cousin doing favors that expire. 66 MG Road takes inherited flats through cleanup, repair and tenancy with one vetted manager per property, every rupee itemized, vendor work billed at actuals with receipts, and dated photo and video proof. Read why NRIs stopped trusting property managers before you hand keys to anyone, including us.

FAQ

Does India tax inherited property? No. India abolished estate duty in 1985. Tax arises later: on rent if you let it, and on capital gains if you sell.

Can an NRI inherit agricultural land? Yes. Inheritance is the exception to the farmland bar. You can hold it and sell it to a resident Indian, but not to another NRI.

Do I need a succession certificate to claim an inherited flat? No. A succession certificate covers debts and securities, not immovable property. For a flat you need the heirship established by legal heir certificate, probated will or court decree, then mutation.

Is probate of a will mandatory in India? It is mandatory for wills relating to immovable property in Mumbai, Chennai and Kolkata. Elsewhere it is not compulsory in most states, though institutions may still demand it.

How is capital gains tax calculated on inherited property? The previous owner's cost and holding period carry over to you. Property held long-term, counting the deceased's period, is taxed at 12.5% plus surcharge and cess on the gain for sales after 23 July 2024.

How much money can I repatriate after selling inherited property? Up to USD 1 million per financial year from your NRO account, with Form 15CA and a CA-certified Form 15CB. Beyond that, RBI approval or sales staged across years.

Can I manage all of this without travelling to India? Most of it. A specific Power of Attorney executed at your consulate lets a representative handle mutation, sale and registration. Some sub-registrar offices require the seller in person, so verify state practice first.

Inherited a flat and not ready to sell? 66 MG Road restores it, rents it and reports every rupee with dated proof. Mumbai, Pune, Bangalore, Hyderabad, Chennai, Gurgaon. See pricing.

Saurabh Garg, founder, 66 MG Road

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