Cross-border inheritance is regarded as a paperwork issue, yet it is a complex compliance exercise spanning succession laws, foreign exchange rules and multi-jurisdictional taxes. For non-resident Indians (NRIs) with Indian assets, the absence of proper structuring may lead to delays, disputes and blocked funds.
Foreign Will
A Will drafted in the US does not automatically ensure smooth transfer of Indian assets, particularly immovable property.
“A US-drafted Will by an NRI is not automatically valid for Indian immovable property… Probate is mandatory in Mumbai, Chennai and Kolkata courts, and it is often required by banks and authorities elsewhere,” said Alay Razvi, managing partner at law firm Accord Juris. “Dual Wills are advised: One for movable or US assets and another for Indian immovable property. Without validation, heirs face disputes and delays.”
“Indian law recognises testamentary freedom irrespective of where the Will is executed. However, the real issue is not validity, it is enforceability,” said Mehak Joshi, advocate, Delhi High Court.
Can US-based heirs inherit Indian property?
Foreigners can inherit property in India.
“Yes, an NRI can bequeath Indian immovable property to US citizen children. [However] FEMA permits unrestricted transmission by inheritance with no approval needed, from the Reserve Bank of India,” Razvi said, referring to the Foreign Exchange Management Act. After probate or succession certification, heirs can obtain ownership and even sell the property.
Foreign exchange rules come into play after inheritance. “FEMA will not regulate the inheritance of such property; it will regulate what the heir can do with the property thereafter,” Joshi notes.
Moving money abroad
Repatriation of inherited assets is permitted, but it is not automatic.
“The heir pays long-term capital gains tax at 20 per cent, with indexation for property, and then repatriates up to $1 million per financial year,” said Razvi. Repatriation is subject to documentation such as probate, death certificate and certification by a chartered accountant.
Anil Harish, managing partner at D.M. Harish & Co., adds: “They [heirs] can sell those Indian assets, have the appropriate TDS deducted, pay all appropriate taxes and then move up to $1 million per financial year. For remittance, a chartered accountant certificate is required.”
Large estates may need staggered transfers due to the annual cap — a process that can take several months.
OCI status does not change core rights
Holding an Overseas Citizen of India (OCI) card does not alter inheritance rights or tax liability.
“An OCI card confers no change in inheritance rights… both OCI holders and foreign nationals are treated similarly,” Razvi said. However, it may ease operational aspects such as banking and documentation.
Harish agreed, saying: “It does not change the substantive rights of a person in so far as inheritance or payment of tax is concerned.”
Double taxation risks
India does not levy an inheritance tax, but taxation can arise later.
“There is no double taxation on the estate transfer itself. For future rental income or gains, India taxes first, and the US provides a foreign tax credit,” Razvi explained, referring to treaty provisions.
Joshi added nuance: “The overlap arises later, when the inherited asset generates income or is sold… relief is provided through foreign tax credits. The same income is not taxed twice in substance.”
HUF assets add another layer of complexity
If the deceased NRI belonged to a Hindu Undivided Family (HUF), inheritance becomes structurally more complex.
“A US-based heir… retains their birthright share… The heir claims their share via a partition suit or survivorship rules,” Razvi said.
Joshi explained the practical challenge: “What passes on death is not the HUF property as a whole, but only the deceased coparcener’s share… Realising that share requires partition.”
Executors can operate remotely, but with local support
A US-based executor can administer Indian assets without being physically present, but local representation is essential.
“The US-based executor applies for probate remotely… using a Power of Attorney,” Razvi says. Banks typically release funds only after probate.
In practice, experts emphasise reliance on Indian legal counsel. “While physical presence is not mandatory, an executor… may ordinarily have to act through a power of attorney holder or local professionals,” Joshi noted.
Cross-border inheritance involving India is less about legal permission and more about execution discipline. Dual Wills, early probate planning, and clarity on FEMA limits can significantly reduce friction for heirs.