The concept of inheritance holds significant cultural and legal importance across the world, especially when it comes to ancestral property. For Non-Resident Indians (NRIs), the question of whether they can inherit ancestral property in India is one that carries both emotional and practical implications.
Although NRIs may not be allowed to purchase agricultural land, they may inherit it from a relative through a will, or through applicable personal law. There is no limit on the number of properties that are inheritable. There is no provision requiring to pay tax at the time of inheritance. Notably, if any income is earned from such property it may be subjected to income tax.
What Is Ancestral Property?
Ancestral property refers to property that has been inherited up to four generations. This property passes down through generations without any division or partition, maintaining its status as communal family property. Ancestral property can include land, houses, and other assets that have been held by the family for generations.
Inheritance Laws for NRIs
In India, the inheritance of ancestral property by NRIs is primarily governed by personal laws based on religion. Different religions have their own succession laws that determine how property is divided among legal heirs. For instance, Hindu, Jain, Sikh, and Buddhist families are governed by the Hindu Succession Act, while Muslims are guided by Sharia law, and Christians follow the Indian Succession Act.
Rights of NRIs as Legal Heirs
As legal heirs, NRIs have the same rights to ancestral property as resident Indians. They are entitled to a share of the property as per the inheritance laws applicable to their religion. These laws ensure that NRIs can claim their rightful share in ancestral property, even if they reside outside of India.
Repatriation of Proceeds
If an NRI inherits ancestral property in India, they have the right to repatriate the proceeds from the sale of the property outside the country, subject to certain conditions and limits imposed by the Reserve Bank of India (RBI). NRIs can repatriate up to USD 1 million per financial year without requiring any special permission.
Legal Documentation
NRIs inheriting ancestral property should ensure proper legal documentation to establish their rightful claim. This might involve obtaining a succession certificate or legal heir certificate from the appropriate authorities.
Seeking Legal Assistance
Given the complexity of inheritance laws and the potential challenges involved, NRIs are advised to seek legal counsel when dealing with ancestral property matters. Legal experts can provide guidance on the relevant laws, documentation, and steps to ensure a smooth and rightful inheritance process.
