If you recently lost a family member in India and inherited property or money, the first question you are probably asking is: can I actually bring this back home? I hear it every week. The answer is yes — NRI repatriation of inherited assets is entirely legal. But there are steps to follow, and skipping any one of them can cost you time, money, or both.
What Are Inherited Assets for an NRI?
Inherited assets are anything you receive as a legal heir after someone passes — a flat, agricultural land, bank accounts, shares, fixed deposits, gold, or business interests. You did not earn these in India. You received them through a will or succession law. That distinction matters because FEMA, the Foreign Exchange Management Act, 1999, treats inherited assets differently from assets you personally acquired in India, and gives you a clearer path to repatriation.
Who Does This Apply To?
These rules apply if you are an Indian citizen living abroad, or an OCI or PIO cardholder, and you have inherited assets from a relative in India. Your residential status under FEMA is what matters here, not your income tax residency. If you live outside India for work or settlement — whether in the US, UK, UAE, Canada, or Australia — this applies to you.
What Are the FEMA Rules for NRI Inheritance?
The repatriation of inherited property by NRIs is governed by the Foreign Exchange Management (Remittance of Assets) Regulations, 2016. Here is what you need to know.
The annual cap is USD 1 million per financial year (April to March). This covers all sources combined — property sale proceeds, bank balances, investments — so track everything you repatriate in a given year.
All inherited funds must first land in your NRO (Non-Resident Ordinary) account in India. Repatriation happens from there, after a Chartered Accountant certifies that your taxes are paid.
One important restriction: agricultural land, plantation property, and farmhouses cannot be repatriated even if inherited. You can sell them, but the proceeds stay in India unless you get RBI approval — which is rarely granted. Residential and commercial property has no such restriction.
If your inherited assets exceed USD 1 million, you need to apply to the RBI for approval. We handle these applications at the firm regularly, and the process is manageable with the right documentation.
Tax Implications You Need to Know
Good news first: inheriting assets is not taxed in India. There is no inheritance tax or estate duty. You do not owe anything simply for receiving the asset.
However, if you sell an inherited property, capital gains tax applies. For long-term gains (property held over two years), the rate is 20% with indexation. The cost basis is what the original owner paid, indexed from their purchase date — which often reduces the taxable gain significantly.
Any rental income or interest earned from inherited assets while held in India is also taxable and must be declared before repatriation.
Check whether your country of residence has a Double Tax Avoidance Agreement (DTAA) with India. If it does, you may be able to claim credit for taxes paid in India and avoid being taxed twice. Many NRIs miss this and overpay.
What We Recommend: The Step-by-Step Process
Step 1: Get your legal heir status established. Obtain a succession certificate, probate of will, or legal heir certificate. Without this, no bank or registrar will act on your instructions.
Step 2: Activate your NRO account. All inherited funds flow through here. Make sure your KYC is current.
Step 3: Move funds into the NRO account. Property sale proceeds, bank transfers, investment redemptions — all go here first, with documentation matching your legal heir certificate.
Step 4: Pay your taxes. Work with a CA to calculate and file. Keep proof of payment.
Step 5: Get Form 15CA and 15CB. Your CA issues 15CB. You file 15CA online. Both go to your bank before any remittance is processed. Banks will not move without these.
Step 6: Initiate the remittance. Submit all documents to your bank. They are required to process once FEMA compliance is confirmed.
Step 7: Apply to RBI if needed. If your total exceeds USD 1 million for the year, file the application. This is a standard process — not something to be afraid of.
Mistakes That Can Hurt You
Receiving funds in your NRE account directly is a FEMA violation. Inherited Indian assets go into NRO only. The penalty can be up to three times the amount involved.
Relying on an affidavit instead of a proper succession certificate will get you rejected by banks. Courts take two to six months for this, so start early.
Crossing the USD 1 million cap without realising it is more common than you think. If you repatriated other funds earlier in the same financial year, count them.
Ignoring DTAA benefits means you likely overpay tax. This is recoverable money — do not leave it behind.
Frequently Asked Questions
Can I repatriate if I inherited jointly with siblings in India?
Yes. Your share, once documented, can be repatriated by you. Your resident siblings follow different rules and cannot use your FEMA entitlement.
Is there a deadline to repatriate?
No hard FEMA deadline exists, but we recommend acting within one to two financial years. Tax laws change, and delays complicate things.
What documents will my bank ask for?
Typically: death certificate, will or succession certificate, NRI status proof, Form 15CA and 15CB, tax payment proof, NRO account statement, and a self-declaration on the USD 1 million cap.
What if there was no will?
You still inherit under applicable succession law. You will need a succession certificate from a civil court. Our firm handles these applications and the repatriation process that follows.
Conclusion
NRI repatriation of inherited assets follows a clear legal path. Establish your heir status, route funds through NRO, pay your taxes, get your forms in order, and initiate the transfer. What makes it hard is doing it from abroad without someone who knows the process.
At our firm, we have helped NRIs through every type of inherited asset situation — straightforward bank transfers, property sales, and RBI approval cases. If you are not sure where to begin, call us. The first consultation is free, and we will give you a straight answer about where you stand.