Understanding Inheritance Laws in India
Inheritance refers to assets and wealth that pass on to beneficiaries after the death of an individual.
In India, succession is governed by three major laws based on the religion of the deceased:
• Hindu Succession Act
• Indian Succession Act
• Muslim Law
1. Applicability of Succession Laws
Succession depends on whether the person died with or without a Will.
| Scenario |
Applicable Law |
| Intestate (No Will) – Hindus, Jains, Sikhs, Buddhists |
Hindu Succession Act |
| Intestate – Christians, Parsis, Jews |
Indian Succession Act |
| Intestate – Muslims |
Muslim Personal Law |
| Testate (With Will) – All except Muslims |
Indian Succession Act |
| Testate – Muslims |
Muslim Personal Law |
NRIs & Inheritance
NRIs can inherit any property in India. Holding or transferring inherited assets must comply with FEMA rules.
No Inheritance Tax in India
India does not levy inheritance or estate tax. However, countries like the US & UK impose approx. 40% estate tax.
Tax on Income from Inherited Assets
Income until date of death is taxed in hands of deceased; thereafter in hands of legal heirs.
2. Understanding a Will
A Will expresses how a person wishes to distribute assets after death.
The maker is the Testator, recipients are Beneficiaries, and the property is called the Estate.
A Will can be changed anytime during the Testator’s lifetime. It applies only to assets owned at the time of death.
3. Administration of a Will
Probate
- Probate legally certifies the Executor’s right to execute the Will.
- Mandatory for Wills of Hindus executed in Mumbai, Chennai, Kolkata jurisdiction.
Letter of Administration
- Required when no Executor is named in the Will.
- Gives authority to administer the Estate.
Succession Certificate
- Used for collecting debts and securities when Probate is not mandatory.
- Holder must distribute assets to rightful heirs.
4. Joint Ownership
When assets are jointly held, the deceased’s share devolves to legal heirs.
Survivorship does not override succession rights.
Creating nominations or a Will reduces legal complications.
5. Nomination
- A nominee is merely a Trustee, not the owner.
- Nominee must hand over property to legal heirs or Will beneficiaries.
- Nomination + Will in favour of nominee avoids disputes.
- For company shares, nominee rights may override heir rights due to Companies Act interpretation.