As an NRI, you have every legal right to inherit shares and securities from a deceased relative in India — the process is called “transmission of shares,” and it is entirely separate from buying or selling stocks. With the right documents and a proper legal approach, most transmissions can be completed in 60 to 90 days — and we are here to walk you through every step.
You’ve Just Lost Someone — And Now There Are Shares To Deal With
If you are an NRI who has recently lost a parent, spouse, or close relative in India, you are likely dealing with grief and, on top of that, a pile of practical questions. One of the most common ones we hear in our NRI legal services practice is: “My relative had shares and stocks in their name — how do I get them transferred to me from abroad?”
This guide is written specifically for you. The process of transferring inherited shares from a deceased person’s demat account to yours is called the transmission of shares, and it is governed by well-established law in India. You do not need to panic. You do need to act — and act correctly.
I’ve helped dozens of NRI families navigate this process from the UK, the US, Canada, the Gulf, and Australia. The good news is that Indian law recognises your inheritance rights fully. The less good news is that the paperwork can be genuinely confusing if you do not know exactly what is required. That is what we will clear up today.
What Exactly Is “Transmission Of Shares” — And How Is It Different From A Transfer?
People often confuse two words: transfer and transmission. In Indian company law, they mean very different things.
A transfer of shares happens when a living person voluntarily sells or gifts their shares to another person. It requires a share transfer deed, stamp duty, and both parties’ consent.
A transmission of shares, on the other hand, happens by operation of law — meaning it happens automatically as a legal consequence of death, insolvency, or lunacy. No stamp duty is payable. No sale is involved. The shares simply pass on to the legal heir or nominee, as a matter of right.
So when your father passes away and you are his legal heir, you are not buying his shares from his estate — you are receiving them because the law says they belong to you. That distinction matters a great deal, especially for NRIs, because it affects the FEMA (Foreign Exchange Management Act) rules that apply and whether you need RBI approval (in most inheritance cases, you do not).
Who Does This Apply To — Is This Your Situation?
This guide applies to you if you are a Non-Resident Indian (NRI) — meaning an Indian citizen or Person of Indian Origin (PIO) living outside India — and one of the following is true:
- A close relative in India has passed away and held shares, demat holdings, mutual funds, or bonds in their name.
- You are named as a nominee on the demat account of the deceased.
- There is no nominee, and you are a legal heir under a Will or under the Hindu Succession Act / Indian Succession Act.
- You are a joint holder on the account and the primary holder has passed away.
Even if you have an Overseas Citizen of India (OCI) card rather than an Indian passport, you are still entitled to inherit and receive transmitted shares under Indian law. The rules apply to you equally.
What Are Your Legal Rights As An NRI Inheriting Shares In India?
Let me be direct: Indian law fully protects your right to inherit. The Foreign Exchange Management Act (FEMA) makes a clear and important provision — an NRI or PIO can freely inherit any asset located in India from a person resident in India. This includes shares listed on Indian stock exchanges, holdings in dematerialised (demat) accounts, mutual funds, and bonds.
You do not need prior permission from the Reserve Bank of India to inherit shares from a resident Indian. The inheritance is your right — not a privilege that requires government approval.
Once the shares are transmitted to your name, you can either hold them in your NRO (Non-Resident Ordinary) demat account or, after paying applicable taxes, repatriate the proceeds if you choose to sell — subject to FEMA repatriation rules. You can repatriate up to USD 1 million per financial year from an NRO account after taxes, which covers the vast majority of inheritance situations.
The Companies Act, 2013, and SEBI (Securities and Exchange Board of India) regulations govern how the actual transmission is processed through the depository participant (your bank or broker). The law is on your side — the process just needs to be followed carefully.
What Steps Do We Recommend? A Practical, Step-By-Step Guide
Based on our experience providing NRI legal services across hundreds of succession matters, here is the process we recommend following:
Step 1 — Obtain the Death Certificate
Get multiple certified copies of the death certificate from the municipal authority in India. You will need at least four to six copies — different institutions will ask for originals or certified copies separately.
Step 2 — Identify All Holdings and Demat Accounts
Contact the deceased’s depository participant (DP) — usually their bank or broker — to get a full statement of holdings. Also check for physical share certificates, which require a slightly different process through the Registrar and Transfer Agent (RTA).
Step 3 — Check for a Nominee on the Demat Account
If a nominee was registered on the account, the transmission process is relatively straightforward — the nominee can claim the shares by submitting the death certificate and their own KYC documents to the DP. If there is no nominee, you will need a legal succession certificate or probate of Will.
Step 4 — Open an NRO Demat Account (If You Don’t Have One)
As an NRI, inherited shares must come into an NRO demat account — not an NRE account. If you do not already have one, open it with an Indian bank before initiating the transmission.
Step 5 — Gather and Notarise the Required Documents
You will typically need: the death certificate, your PAN card, your passport, proof of NRI status, the Transmission Request Form (TRF), an indemnity bond (for holdings above ₹5 lakh), and — if there is no nominee — a succession certificate or Will with probate. All foreign-executed documents must be notarised and apostilled.
Step 6 — Submit the Transmission Request to the Depository Participant
Submit the complete document package to the DP. SEBI mandates that DPs process transmission requests within 30 days of receiving complete documents. Follow up in writing — keep a paper trail.
Step 7 — Handle Physical Share Certificates Separately
If the deceased held old physical certificates, submit them to the company’s Registrar and Transfer Agent along with a Transmission cum Demat Request Form and the same documentation set. The RTA will dematerialise and credit them to your NRO demat account.
Step 8 — File the Appropriate Tax Returns
Inherited shares themselves are not taxed at the time of transmission. However, when you sell them, capital gains tax applies — calculated from the original purchase date and price of the deceased. Consult a CA alongside your legal counsel before selling.
Mistakes That Can Seriously Delay — Or Derail — Your Transmission
Common Mistakes to Avoid:
- Submitting incomplete documents: This is the single biggest cause of delay. Every DP and RTA has specific requirements. Missing one form or one notarisation can mean weeks of back-and-forth.
- Using an NRE demat account instead of NRO: Inherited shares must go into an NRO account first. Attempting to credit them to an NRE account will result in rejection.
- Not getting documents apostilled: Any document signed abroad — an affidavit, indemnity bond, or NOC from co-heirs — must be notarised and then apostilled as per the Hague Convention. Many NRIs skip this step and face rejection.
- Ignoring co-heirs: If other legal heirs exist, they may need to provide a No Objection Certificate (NOC). Overlooking this causes disputes and legal complications.
- Letting physical certificates expire into the IEPF: Unclaimed dividends and shares are transferred to the Investor Education and Protection Fund (IEPF) after seven years. If the deceased’s shares are already there, the recovery process is far more involved. Act promptly.
- Assuming you don’t need a lawyer: Each situation is different. Without a Will, the intestate succession rules vary by religion — Hindu Succession Act, Indian Succession Act, Muslim Personal Law. Getting the succession certificate right the first time saves months of grief.
FAQs On NRI Inheritance In India
Q: Can an NRI inherit shares in India without coming back to India?
A: Yes, in most cases you can complete the entire transmission process without visiting India, provided you have an authorised representative or a lawyer acting on a notarised Power of Attorney. The documents you sign abroad will need to be notarised and apostilled, but your physical presence is generally not required unless there is a court matter for a succession certificate.
Q: What if there is no nomination and no Will — how do I prove I am the legal heir?
A: You will need to obtain a Legal Heirship Certificate from a revenue authority, or a Succession Certificate from a civil court — which is a more formal legal document issued after a court process. For holdings above a certain threshold, most DPs will insist on a Succession Certificate. This is where legal assistance becomes particularly important, as the process involves filing a petition in the appropriate district court.
Q: Do I have to pay any tax when the shares are transmitted to my name?
A: No tax is levied at the time of transmission itself — inheritance is not a taxable event in India. Tax becomes relevant when you sell the inherited shares. The cost of acquisition for capital gains purposes is the original price paid by the deceased, and the holding period includes the period of ownership by the deceased. Consult a tax advisor before selling.
Q: Can I repatriate the money to my home country after selling the inherited shares?
A: Yes, after paying the applicable taxes and obtaining a CA certificate (Form 15CB) and filing Form 15CA with the Income Tax Department, you can repatriate up to USD 1 million per financial year from an NRO account. This limit covers virtually all individual inheritance situations. Your bank’s NRI desk will guide you through the remittance process.
Q: What happens if shares are held jointly and one holder passes away?
A: If shares are held jointly, the surviving holder automatically gets full rights over the joint holding on the death of the other holder. The process is simpler — the surviving holder submits a Deletion of Name Request along with the death certificate to the DP, and the account is updated to their sole name without any need for a succession certificate.
A Final Word On NRI Inheritance In India
If you have read this far, you already understand more about the transmission of shares than most people who come to us for the first time. The process is not impossible — but it does require precision, the right documents, and a clear understanding of which rules apply to your specific situation.
Indian law has your back. Your inheritance rights as an NRI are protected under FEMA, the Companies Act, and SEBI regulations. The system is designed to allow you to receive what your loved one left for you — it just asks you to follow the right steps in the right order.
At Aagarwalla & Co., we provide dedicated NRI legal services from Delhi, with experience in handling share transmissions, succession certificates, probate matters, and FEMA compliance for clients across the globe. Whether you are in London, Toronto, Dubai, or Sydney, we are one call or email away.
If you are dealing with a transmission matter right now — or even if you are unsure where to begin — please reach out to us at Aagarwalla & Co. The first conversation is always about understanding your situation. We are here to help you get through this with clarity and confidence.