An NRI, an OCI cardholder or a foreign citizen of Indian origin can inherit any immovable property in India, including agricultural land and farmhouses, from a person who was resident in India. Inheritance may be under a will or, without one, under the succession law of the deceased's religion. No inheritance tax is charged. The heir should then have the property mutated in their name; they may sell it, with agricultural land saleable only to a resident Indian citizen.
The right to inherit
Section 6(5) of the Foreign Exchange Management Act, 1999 allows a person resident outside India to hold immovable property in India that was inherited from a person resident in India. The Non-debt Instruments Rules repeat this for NRIs and OCI cardholders and add no restriction on the type of property. The contrast with purchase is the point: you cannot buy agricultural land, but you can inherit it.
A foreign national who is not of Indian origin can also inherit from a resident, but needs Reserve Bank permission to sell or transfer, and citizens of certain neighbouring countries need prior approval even to hold. For everyone, the manner of inheritance must be consistent with the exchange control law as it stood when the deceased acquired the property.
Who inherits when there is no will
Hindus, Sikhs, Jains, Buddhists. Under the Hindu Succession Act, 1956 a man's property goes equally to his Class I heirs: widow, sons, daughters, mother, and the branch of any predeceased child. Failing them, to Class II heirs in order, then agnates and cognates. A woman's property goes first to her children and husband, then to her husband's heirs, with a special rule sending property she inherited from her parents back to her father's heirs if she leaves no children. In ancestral property, sons and daughters are coparceners by birth with equal shares since 2005.
Muslims. Shares are fixed by personal law: for example a widow takes one-eighth if there are children and one-quarter if not; a son takes twice a daughter's share. Only one-third of the estate can be willed away without the heirs' consent.
Christians and Parsis. Under the Indian Succession Act, 1925, a Christian widow takes one-third and lineal descendants two-thirds; Parsi rules give the widow and each child equal shares, with a share for parents.
Marriage under the Special Marriage Act generally takes succession into the Indian Succession Act, with an exception where both spouses are Hindu, Sikh, Jain or Buddhist.
Inheriting under a will
A will leaving property to an heir abroad is fully effective. It should be proved if questioned, and in estates connected with Mumbai, Chennai and Kolkata probate has traditionally been required. Elsewhere, an uncontested registered will is commonly accepted for mutation without probate. A will made abroad can cover Indian property but is harder to use. See wills and probate.
What the heir abroad should do
- Obtain several certified copies of the death certificate; if the death occurred abroad, have it apostilled or attested.
- Collect title deeds, the latest revenue or tax record and any will.
- Identify all heirs and their shares, and whether the family will hold jointly, divide, or have some heirs release their shares.
- Give a power of attorney to a person in India.
- Apply for mutation with the heirship proof the state requires: a legal heir certificate, registered will or affidavits and no-objections.
- For deposits and shares, obtain a succession certificate where there is no nomination.
- Update the PAN, bank and society records.
The difference between these documents is explained in this comparison.
Keeping, sharing or selling
You may keep inherited property indefinitely and let it out; rent goes to your NRO account and is taxable in India. To exit in favour of a sibling, a registered relinquishment deed is used. To separate your portion, see partition. On sale, capital gains tax is computed with the previous owner's cost and holding period, the buyer deducts tax at non-resident rates, and proceeds are repatriable up to one million US dollars a year. Inherited agricultural land, plantation property or a farmhouse can be sold or gifted only to a resident Indian citizen. The sale process is set out in our selling guide.
Risks for absent heirs
The danger is not the law but the gap between death and paperwork. In that gap a relative obtains mutation in their sole name, produces a doubtful will, or simply stays in possession until they can plead adverse possession. Apply for mutation promptly, object in writing to any entry made without notice to you, and do not sign blank papers or broad powers of attorney "to help with formalities".
- NRIs, OCIs and foreign citizens of Indian origin can inherit any property, including agricultural land.
- Shares depend on the deceased's religion unless a valid will says otherwise.
- There is no inheritance tax in India; gains on later sale are taxed.
- Mutation in your name soon after the death prevents most disputes.
Frequently asked questions
Can an OCI cardholder inherit agricultural land in India?
Yes. The bar is on purchase, not inheritance. The land can later be transferred only to a person resident in India who is an Indian citizen.
Does a daughter living abroad have equal rights in her father's property?
Yes. Under the Hindu Succession Act she inherits self-acquired property equally with sons as a Class I heir, and has been an equal coparcener in ancestral property since 2005. Residence abroad makes no difference.
Do I need to be in India to inherit?
No. Title passes on death by operation of law. The formalities of mutation and transfer can be completed by an attorney holder.
Can I inherit from a relative who was also an NRI?
Yes, provided the relative had acquired the property in accordance with the foreign exchange law in force at the time, or had inherited it from a resident.
Is inherited property taxable in my country of residence?
Possibly. Some countries tax or require reporting of foreign inheritances or of later income and gains. India does not tax the inheritance. Check locally.
