Inheritance and Succession Planning in India – Casela Advisors

What is Inheritance?

Inheritance refers to the transfer of a deceased person’s wealth, assets, and property to their legal heirs or beneficiaries. In India, inheritance and succession are governed by three primary legal frameworks based on the religion of the deceased:

Hindu Succession Act (for Hindus, Sikhs, Jains, and Buddhists)
Indian Succession Act (for Christians, Parsis, and Jews)
Muslim Personal Law (for Muslims)

Applicability of Succession Laws

Scenario	Community	Governing Law
Intestate (No WILL)	Hindu, Sikh, Jain, Buddhist	Hindu Succession Act
Intestate (No WILL)	Christian, Parsi, Jew	Indian Succession Act
Intestate (No WILL)	Muslim	Muslim Personal Law
Testate (With WILL)	All (Except Muslims)	Indian Succession Act
Testate (With WILL)	Muslim	Muslim Personal Law

Can an NRI Acquire Property by Inheritance?

Yes. A Non-Resident Indian (NRI) or Person of Indian Origin (PIO) can inherit immovable and movable property in India, subject to FEMA regulations and RBI guidelines.

Taxation on Inherited Property

a) Inheritance of Property:

There is no inheritance or estate tax in India.
However, countries like the US and UK impose estate duties up to approximately 40%. NRIs should consult an international tax expert to understand cross-border implications.

b) Income from Inherited Property:

Till the date of death: Taxable in the hands of the deceased (recoverable from legal representatives, limited to inherited asset value).
After the date of death: Taxable in the hands of beneficiaries/executors as per their individual tax slabs.

WILL and Succession Planning

A WILL is a legal document that expresses how a person wishes to distribute their assets after death.

The person making the WILL is called a Testator.
The legal inheritor is called a Beneficiary.
A WILL can be revised any number of times.
It applies only to assets owned at the time of death.

Administration of WILL

Probate
- A legal process where the court certifies the authenticity of the WILL.
- Mandatory in Mumbai, Chennai, and Kolkata for Hindu Wills involving immovable property.
Letter of Administration
- Issued when a person dies intestate or does not name an executor in the WILL.
- Grants legal right to administer the estate.
Succession Certificate
- Issued for recovery of debts or securities.
- Generally used when Probate or Letter of Administration is not required.

Joint Ownership of Assets

Assets held jointly pass to legal heirs of the deceased.
Survivorship rights do not override succession rights.
It is recommended to:
- Draft a WILL
- Appoint nominees
- Ensure legal clarity in joint accounts or property titles

Nomination vs Legal Heirship

Nominee acts as a trustee, not necessarily the owner.
Nominee is responsible to transfer the asset to legal heirs or WILL beneficiaries.
To avoid disputes, nominate the same person named in the WILL.
In company shares, nominee’s rights may override legal heirship (per judicial interpretation).

Why Choose Casela Advisors?

At Casela Advisors, our expert Chartered Accountants in India assist NRIs and residents with:

Succession Planning and WILL Drafting
Inheritance Tax Advisory (including US/UK estate duty planning)
Probate and Legal Compliance
Asset Repatriation and FEMA compliance
Representation before Indian tax and legal authorities