NRI inheritance law: succession, wills and documents

Which law governs the estate

India has no single succession code. The Hindu Succession Act, 1956 applies to Hindus, Sikhs, Jains and Buddhists; Muslim personal law, in its Sunni and Shia forms, to Muslims; and the Indian Succession Act, 1925 to Christians, Parsis and Jews, to anyone who married under the Special Marriage Act, and to the making and proving of wills for most communities. A foreign passport does not change which law applies to immovable property in India: it follows the law of the place where the land is. Movable assets follow the law of the deceased's domicile, which for long-settled emigrants can raise real questions.

The guide Can an NRI inherit property in India? sets out who inherits under each law.

With a will and without

A valid will lets a person leave self-acquired property to anyone, subject to the one-third limit under Muslim law. Without a will, statutory heirs take in fixed shares, which often means several people in different countries becoming co-owners of one house. That is the origin of most partition disputes. A simple Indian will for Indian assets, made alongside any will abroad, avoids it.

After death, a will may need probate, particularly for estates connected with Mumbai, Chennai and Kolkata or where institutions insist. Without a will, the heirs establish their status through a legal heir certificate, a succession certificate or letters of administration, depending on the asset. The three are compared in this guide.

Asset by asset

Land and buildings need mutation in the revenue or municipal record. Bank deposits and lockers are released to the nominee, or to heirs on a succession certificate or indemnity. Shares and mutual funds are transmitted by the company or depository; holdings left unclaimed for seven years will have moved to the investor protection fund and must be reclaimed. Insurance and provident fund follow the nomination, with remedies if a claim is refused. A nominee usually collects on behalf of all heirs and is not, without more, the final owner.

Papers signed abroad

Almost every step involves a document signed by an heir overseas: a power of attorney, a no-objection affidavit, a relinquishment deed. Each must be authenticated by the Indian mission or by apostille, and deeds must be stamped in India within three months of arrival. Getting this wrong is the commonest cause of delay, which is why document attestation sits in this practice area. Foreign death certificates and probate grants need the same treatment before Indian offices will accept them.

Tax and taking the money out

India does not levy estate duty or inheritance tax. Income from inherited assets, and capital gains when they are sold, are taxed, using the previous owner's cost and holding period. Inherited funds are credited to an NRO account and may be repatriated up to one million US dollars per financial year. Some countries tax or require reporting of foreign inheritances received by their residents, so take advice where you live as well.

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