Inheriting Property in India as an NRI: Tax, Paperwork and Repatriation (2026)
What happens when you inherit a home or land in India while living abroad, from probate and mutation to tax on sale and sending the money out.
An NRI can inherit any immovable property in India from a resident, including agricultural land, and India has no inheritance tax. Tax arises only when you sell: the previous owner's cost and purchase date count as yours, and a long-term gain is taxed at 12.5% plus surcharge and cess, deducted by the buyer. Up to USD 1 million a financial year can then be sent abroad.
Key points
- NRIs and OCIs can inherit any property in India from a resident, including farmland, plantations and farmhouses, as the Reserve Bank of India's FAQ confirms.
- Since 20 December 2025, probate of a will is no longer mandatory anywhere in India, including Mumbai, Chennai and Kolkata.
- Receiving an inheritance is not taxed in India. A sale is: 12.5% plus surcharge and cess on a long-term gain.
- From 1 October 2026, a resident individual buying from an NRI can deposit the TDS using their PAN, without a TAN.
- Sale proceeds can be sent abroad up to USD 1 million per financial year, with documents.
Can an NRI inherit property in India?
Yes. Under India's foreign exchange rules, a non-resident Indian or an Overseas Citizen of India can acquire immovable property by inheritance from a person resident in India, or from anyone who acquired it lawfully. This includes agricultural land, plantation property and farmhouses, which an NRI cannot buy. The RBI FAQ on immovable property sets out who can inherit and who can buy.
You can hold the property for as long as you like. If you rent it out, the rent is Indian income: it is usually credited to your NRO account (or to your NRE account once tax on it has been paid) and is taxed in India, with tax deducted by a tenant where the rules require it.
Do you still need probate in Mumbai, Chennai or Kolkata?
No longer as a legal requirement. Section 213 of the Indian Succession Act, 1925 required probate of wills made by Hindus, Buddhists, Sikhs, Jains and Parsis within the old presidency towns of Bombay, Madras and Calcutta, or covering immovable property there. The Repealing and Amending Act, 2025, which received assent on 20 December 2025, omitted that section. A beneficiary can now rely on a valid will without first going to court.
In practice, a housing society, a registrar or a buyer's bank may still ask for probate where a will is contested or unclear, so it remains a useful option. Where there is no will, the property passes under the personal succession law that applies to the deceased, and you will need proof of legal heirship as the state or local authority requires.
What paperwork does an NRI heir need?
The steps are local and vary by state, but the order is usually the same:
- Death certificate of the owner, and the original title deeds.
- The will, or proof of legal heirship where there is none. Other heirs may need to sign a release deed if one heir is to take the whole property.
- Mutation: an application to the revenue office or municipal body to record the property in your name. Mutation does not create ownership, but buyers and banks will expect it.
- A power of attorney if a family member in India will act for you. A power of attorney signed abroad must be attested as Indian law requires and may need to be stamped in India after it arrives.
How is the sale of inherited property taxed for an NRI?
India does not tax the inheritance itself. When you sell, the gain is the sale price minus the previous owner's cost of acquisition and any improvement costs. The previous owner's holding period is added to yours, so a flat a parent bought decades ago is a long-term asset from the day you inherit it.
| Point | Rule for an NRI seller (FY 2026-27) |
|---|---|
| Inheritance received | Not taxed in India |
| Holding period | Previous owner's period counts; long-term after 24 months in total |
| Cost of acquisition | Previous owner's cost |
| Long-term gain | 12.5% plus surcharge and cess, without indexation |
| Short-term gain | Your slab rates plus surcharge and cess |
| TDS by the buyer | 12.5% (long-term) or 30% (short-term), plus surcharge and cess; no minimum threshold for NRI sellers |
| Repatriation | Up to USD 1 million per financial year from NRO balances and inherited assets |
For land and buildings bought before 23 July 2024, resident individuals and HUFs pay the lower of 12.5% without indexation and 20% with indexation. That option is not open to NRIs. Reinvestment reliefs, such as buying another home in India, can reduce the taxable gain within the limits the law sets.
What changed for buyers from 1 October 2026?
A buyer purchasing from an NRI must deduct tax at source under section 393(2) of the Income-tax Act, 2025. Until 30 September 2026, a resident buyer needed a TAN, a separate tax deduction number, to do this. That step often delayed sales. Under the Income-tax (Fifth Amendment) Rules, 2026, notified by the CBDT on 22 September 2026, a resident individual or HUF buyer can now deposit and report the TDS through a PAN-based challan-cum-statement, as for a purchase from a resident, reported by Business Today.
The obligation to deduct has not changed. If the buyer deducts on the full price when your real gain is small, you wait for a refund. A lower or nil deduction certificate under section 395, applied for before the sale, lets the buyer deduct only what is due.
Who can you sell inherited property to?
A home or commercial property can be sold to a person resident in India, an NRI or an OCI. Agricultural land, plantation property and farmhouses can be sold only to a person resident in India. Gifts follow similar lines.
How do you send the sale money abroad?
The proceeds go into your NRO account. Under the RBI's rules for non-resident accounts, you can remit up to USD 1 million per financial year (April to March) from NRO balances and the sale of assets, including inherited ones. Your bank will ask for proof of the inheritance, an undertaking from you and a chartered accountant's certificate that tax has been paid. Larger amounts need RBI approval, or can be spread over more than one financial year.
Will your country of residence tax the sale too?
It may. Many countries tax their residents on worldwide gains, and India's tax treaties decide which country has the first right and how credit for Indian tax is given. Plan the timing and the paperwork on both sides before you agree a price.
This article is general information, not advice for your situation. Team Greenwolf.
Author – Team Greenwolf
23 October, 2026 | 7 min read
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