NRI Can Now Inherit the Indian Property Swiftly

Sujan Afi S

Introduction

You have worked hard day and night to give a comfortable life to your child. You have given him/her the best possible things. He/she has attended one of the best schools. You have sent your child abroad for higher education. He/she has always performed his/her best. Now, he/she has got a job and has settled down in a foreign land.

You have also bought multiple properties in India thinking about the future of your child. Now, what do you think will happen to these properties in India if your child remains an NRI?

Who is NRI?

An NRI (Non-Resident Indian) is a person who is an Indian living in a foreign land.

Tensed? No! Not at all. Because your child can inherit the property/properties. Let us see how.

A Further Discussion

Your child (an NRI) can inherit your property if you name the same by making a Will. Thus, after your death, your child becomes the legal inheritor. Now, let us understand it in technical terms. Your child, as he/she is getting the property from you, will be called “inheritor” and the property he/she gets will be called “inheritance”.

It is not that an NRI can only inherit property from his/her father/mother. The person can also inherit property from another NRI or anyone who names the property after him/her.

However, if a Will is not made, then the NRI has to submit certain documents (his/her/inheritor’s birth certificate, the death certificate of the deceased person from whom the property is to be inherited, registration documents, etc.) to the concerned Court of law. This will help him/her obtain the Succession Certificate from the Court. Only then can he/she inherit the property.

Difficulties that an NRI might encounter

The process of getting the Succession certificate from the court might be time-consuming. Further, the person might not be well-versed in Indian laws. This might act as a hindrance. The experiences that he/she might have in the courts of India might be quite different from what he/she had experienced abroad. Thus, the person can contact a legal advisor to tackle the problems efficiently.

What type of property can a Non-Resident Indian inherit?

The person can inherit both movable and immovable properties. There are not many restrictions on this. He/she can inherit residential/commercial properties, agricultural land, farmland, etc! However, RBI’s permission is necessary for these cases.

Tax implication on inheritance by NRIs

There is no tax implication on any kind of inheritance of property in India by NRIs. Therefore, neither the inheritor (NRI) nor the representative of the deceased person is required to pay any tax/duty at the time of inheritance. Inheritance of a property is different from gifting a property. Inheritance can only come after the death of the property owner while a gift can be given any time when he/she is alive. Although there is no tax for the inheritance of property in India by NRIs gifts may be taxable. If the recipient of the gift is an NRI then he/she will be taxed in 2 kinds of situations:

  • when the gift value exceeds Rs 50,000 
  • when he/she (recipient) does not fall in the specified list of relatives

Taxation on continued ownership of inherited property 

The NRI can continue the ownership of his/her inherited property. He/she can dispose off it too. If the NRI decides to dispose of the inherited property then he/she is liable to pay the tax for the time till the owner of the property is retained. 

Tax implication at the time of selling or gifting the inherited property 

The NRI can gift or sell the inherited property in India too. The person can only gift the inherited property to the resident Indian or other NRI or PIO. If the recipient is a non-relative, he/she is liable to pay tax over the market value of the gifted property. If the NRI wants to sell the property to another NRI or PIO then he/she must have the necessary permission from RBI. Further, he/she can sell his property to a permanent resident of India.

Conclusion

I hope that I have been able to give you a comprehensive explanation about the inheritance of Indian property by an NRI. Still, if you have any doubt or if you need more information regarding it, you can contact us at info@roodland.com. Our expert team is there to answer all your queries and help you by providing the best possible guidance. So, do not hesitate to drop your mail. Your problem is our concern too! Roodland India values you and understands your problems. The professionals guide you accordingly. Thus, you get genuine help and you don’t regret it!

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