Being an NRI, a question that might revolve in your mind is, “Will I be able to inherit a property in India?” or “What can I do with the inherited property in India?”
The good news is that yes, you can inherit a property in India even if you are an NRI. There is no restriction on how many properties an NRI can inherit in India, and this includes farmhouses and farmlands as well. Also, you can inherit property from any Indian resident, be it a relative or not. For a smooth process, you can get in touch with NRI lawyers or NRI property lawyers in India. In order to be able to inherit a property in India, you have to get the property renamed by local authorities such as municipal corporations or gram panchayats. This can be done by submitting documents that mention that you have inherited the property and application of mutation.
Documents required to legally inherit a property
The person who inherits the property has to submit the following documents. The death certificate is needed of the person whose property is being inherited to know the exact time and place of demise for legal purposes. Further, a document mentioning the residential address of the deceased person is also required. It is also important to submit a document containing all the relevant details of the property that is being inherited. The person who is about to heir the property must submit his/her birth certificate, ration cards, and bank statement. After all these documents are submitted, the procedure of inheriting the property fastens.
|Sr. No.||Name of document|
|The death certificate of the deceased person (for the exact time of demise)|
|2.||Residential address of the deceased person|
|3.||Details of the property|
|4.||Birth certificate of the heirs|
|5.||Ration card of the heir|
|6.||Bank statement of the heir|
Is there taxation on inheriting a property?
No taxes will be charged to the person inheriting the property at the time of inheritance. However, if the property is a gift and is of Rs. 50,000 worth or more, then tax will be charged.
What can be done after inheriting a property?
Now that the property is under your name, it is up to you regarding what you wish to do with the property legally.
Selling of the inherited property
If you wish to sell the inherited property, including the farmhouse and farmland, then you can do that, but only to Indian residents. Whatever profit you gain by selling the inherited property, the tax levied will be the same for everyone, be it an Indian resident or NRI. Also, it is important to remember, that tax will be calculated on the basis of how long the property was inherited by an NRI and by its previous owner. It is pertinent that in all cases, the buyer is required to deduct tax at the best price available from the purchase price.
Gifting the property
The NRI has an option to gift his inherited property. However, there are a few restrictions. The inherited property can only be sold to an Indian resident or an NRI. Furthermore, if the person who is being gifted is not a relative of the NRI, then, in that case, the person receiving the property will have to pay the tax depending on the present market value of the property.
Selling inherited property to another NRI
The NRI who has inherited a property in India can sell it to another NRI. But, in order to do this, permission should be acquired from the Reserve Bank of India. A similar procedure must be followed when gifting farmland or a farmhouse to another NRI.
Repatriation of the inherited property
If the taxes for the sale of the property have been paid in India, an NRI may repatriate up to $1 million in sale proceeds annually without seeking prior RBI approval. However, if the amount to be recovered exceeds one million, special RBI permission will be required.
Repatriation of the property is based on a few conditions. Firstly, it is important that the property which is being sold was obtained in compliance with appropriate foreign exchange law at the time the property was inherited. Secondly, the total amount which is repatriated should not cost more than the transaction’s sale profits. Further, an NRI can repatriate the profits of two residential properties. Lastly, funds can only be repatriated when all taxes and additional charges have been paid.
NRIs can inherit a property in India and can further sell it, put on rent, gift, or repatriate the property, including the farmhouses and farmlands. With the laws being easy and in the favour of the NRIs, all the legal procedures are not nerve-racking anymore. However, it is advised that one must contact a lawyer and take assistance from them for a painless procedure. The expert lawyers at Lex Solutions are determined to help their clients with all things surrounding real estate and its inheritance. You may consult with the lawyers of this law firm in Chandigarh who will guide you by explaining the laws and helping you in every step.