Can an NRI inherit property in India? Rules explained here (2024)

I am an NRI. Is there any restriction on me as an NRI inheriting immovable property situated in India from my relative? How many properties can I inherit? IfI inherit a property in India, how I should go about getting it transferred in my name? I understand that if I sell any of the inherited property to an Indian resident, I have to pay capital gains tax @ 20% on profit after indexation. What if I sell it to an NRI? As an NRI I can remit outside only upto 10 lakh USD every year and if the sale amount is more than 10 lakhs? Can the balance money be kept inNRO Account and for how long?

As an NRI you can inherit any number of properties including agricultural land and farm house in India from a resident Indian whether relative or no. In order to get the property transferred in your name, you have to get the mutation of the property done in your name in the records of the local authorities like municipality or the gram panchayat where the property is situated by submitting the copy of application for mutation with appropriate proof of you having inherited the property.

An NRI can sell any property (Including an agricultural land or farm house) to a person resident in India. However, in case the NRI wishes to sell the inherited agricultural land or farm house the same can only be sold to an Indian resident.

The capital gains on sale of inherited assets will be taxed at the same rate whether you sell it to an Indian resident or to an NRI. The tax treatment will depend on the holding period for which the property was held by the NRI along with the period it was held by the previous owner who had acquired it for a consideration. The buyer in both the situations is required to deduct tax at the applicable rate from the sale consideration. Additionally, the you may also have tax liability in the country of your residence on such profits.

In case the sale consideration exceeds 10 lakh USD the balance can be deposited in your NRO account as long as you wish.

Balwant Jain is a tax and investment expert and can be reached onjainbalwant@gmail.com and @jainbalwant on Twitter.

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