Inheriting Property in India as an NRI? TaxVic Explains What to Do Next

Is Inheritance Taxable for NRIs in India?

No, there is no inheritance tax in India, even for NRIs. You are not liable to pay tax when you inherit a property from a deceased parent.

However, taxation kicks in when you:

• Earn income from the inherited property (e.g., rent), or

• Sell the inherited property and realize capital gains

This is where TaxVic’s expert NRI desk can help.

Step 1: Legal Heir Certificate or Probate of Will

To take control of the inherited property, you must:

• Apply for a Legal Heir Certificate (if there’s no Will)

• Obtain Probate of Will (if a Will exists)

TaxVic offers local support to NRIs, helping them navigate legal heir documentation, liaise with authorities, and initiate property mutation—even if they’re not in India.

Step 2: Property Mutation & Ownership Update

Once legal documents are secured, apply for:

• Mutation of property with the municipal authority

• Update of records in the property tax, water, and electricity departments

Mutation helps with ownership records but does not transfer legal title by itself—this is done via succession.

Step 3: Taxation if You Keep or Sell the Inherited Property

If You Rent It Out:

• Rent is taxed under Income from House Property.

• NRIs must file ITR and can claim:

  • 30% deduction for repairs

  • Dedication to municipal taxes

  • Home loan interest, if applicable

Pro tip: Use ITR-2 and report income under PAN—TaxVic can handle this.

If You Sell the Property:

This is the most common NRI query: Can an NRI sell inherited property in India?

Yes, and here’s what you should know:

• You’ll pay capital gains tax in India.

• If the property was held for 2+ years, gains are considered long-term.

• You get an indexation benefit on the cost of acquisition.

• TDS @ 20% + surcharge is deducted under Section 195 for NRIs.

Lower/Nil TDS Certificate for NRI Sale
TaxVic specializes in securing Lower Deduction Certificates under Section 197 so that TDS is deducted only on actual taxable gains, not the full sale value.