NRI Succession Planning: Will, Probate, and FEMA Rules – A Complete Guide for 2026

For Non‑Resident Indians (NRIs), succession planning is often neglected due to the complexity of cross‑border laws – Indian personal laws, succession statutes, FEMA, tax treaties, and the laws of the country of residence. Without a properly drafted will or succession plan, your assets in India may be tied up in court for years, causing hardship to your heirs.

At Hashmi Law Associates (HLAPL), we advise NRIs on will drafting, probate, succession certificates, and repatriation of inherited assets. This guide covers the essential aspects of NRI succession planning under 2026 rules.

1. Governing Laws for NRI Succession

The succession of an NRI's assets in India is governed by different laws depending on the religion of the deceased and the nature of the asset:

2. Why Every NRI Needs a Will (Even if Young)

Without a will, your Indian assets will be distributed under intestate succession laws, which may not reflect your wishes. A will provides:

• Choice of heirs: You can give assets to persons not covered under intestate succession (e.g., friends, charities, step‑children).
• Disinheritance: In certain circumstances (subject to legal limitations), you can exclude legal heirs (e.g., an estranged child).
• Appointment of executor: You can name a trusted person to manage your estate, avoiding court‑appointed administrators.
• Guardianship for minor children: You can nominate guardians for minor children (for assets held in India).
• Simplified probate: A will speeds up the probate process; without a will, succession certificate proceedings take longer.

3. Essentials of a Valid Will for NRIs (Indian Law)

Under the Indian Succession Act, 1925, a will is valid if:

• In writing: Typed or handwritten (holograph will).
• Signed by the testator (or by another person in their presence and by their direction).
• Attested by two or more witnesses who have seen the testator sign (witnesses need not know the contents).
• Testator is of sound mind at the time of making the will (no need to be of sound mind at other times).

Note for NRIs residing abroad: A will made abroad in accordance with the law of that country is recognised in India if it is valid under that country's law. However, it is advisable to have a separate will for Indian assets, governed by Indian law, to avoid probate complications.

4. Probate – When Is It Required for NRIs?

Probate is a court‑issued certificate that confirms the validity of a will and grants authority to the executor to administer the estate. Probate is mandatory in certain jurisdictions:

5. Succession Certificate vs Probate vs Letter of Administration

6. FEMA Rules for NRIs Inheriting Assets

Under the Foreign Exchange Management Act (FEMA), NRIs can inherit assets in India without any restriction, but there are rules regarding repatriation:

• Inherited immovable property: An NRI inheriting residential or commercial property in India can retain it indefinitely. There is no requirement to repatriate or sell.
• Inherited agricultural land: NRIs cannot inherit agricultural land unless they were residents of India at the time of inheritance and have continued to hold it as residents. Otherwise, they must sell it within 12 months of inheritance (or obtain RBI permission).
• Inherited bank deposits / securities: The NRI can hold them in an NRO account. Repatriation of inherited funds is subject to the USD 1 million per financial year limit (general cap), provided the NRI can prove the source through a succession certificate or probate.
• Inherited property sale proceeds: Repatriation up to USD 1 million per property (lifetime limit of 2 properties) applies, regardless of whether the property was self‑acquired or inherited.

7. Tax Implications for NRIs on Inherited Assets

• No inheritance tax: India does not have an inheritance tax (estate duty was abolished in 1985). The heir does not pay tax on the value of inherited assets.
• Capital gains tax on sale: When the NRI sells inherited property, capital gains tax is calculated as follows:
  – Cost of acquisition = the original cost to the deceased (indexed if the property was held for >2 years by the deceased + heir).
  – Indexation benefit is available for LTCG (20% with indexation or 12.5% without indexation).
• TDS on sale: The buyer must deduct TDS on the sale consideration (12.5% for LTCG property, 30% of capital gains for STCG). The heir must file an income tax return to claim refund if excess TDS is deducted.
• Income from inherited assets: Rent from inherited property, dividends from inherited shares, and interest from inherited deposits are taxable in the hands of the NRI heir at the applicable slab rates (plus surcharge and cess).

8. Step‑by‑Step Process for NRIs to Transfer Inherited Assets

Step 1: Obtain proof of inheritance

• Will + probate (if will exists and is within mandatory probate jurisdiction).
• Succession certificate (if no will).
• Legal heir certificate + indemnity bond (for small claims).

Step 2: Mutate property / transfer securities

• For immovable property: Apply to Sub‑Registrar for mutation in the heir's name (requires probate / succession certificate).
• For shares / mutual funds: Contact the respective Registrar and Transfer Agent (RTA) with probate / succession certificate and death certificate.
• For bank deposits: Submit death certificate, probate / succession certificate, and claim forms to the bank.

Step 3: File income tax return (if required)

If the NRI heir sells inherited assets, they must file an ITR in India, claim the cost of acquisition as the original owner's cost, and claim any TDS refund.

Step 4: Repatriate funds (if desired)

Follow the NRO repatriation process (Form 15CA/15CB, bank application) subject to the USD 1 million per financial year limit (for inherited deposits / securities) or USD 1 million per property (for inherited residential property).

9. How HLAPL Can Help NRIs with Succession Planning

At Hashmi Law Associates (HLAPL), we offer comprehensive succession planning services:

• Will drafting for Indian assets that accounts for cross‑border issues (tax treaties, FEMA).
• Probate / Succession Certificate – filing applications before the High Court or District Court.
• Mutation of inherited property – assisting with mutation in municipal records and revenue records.
• Repatriation of inherited funds – advising on FEMA compliance, Form 15CA/15CB, and tax planning.
• Family settlement – drafting family settlement agreements to avoid litigation among legal heirs.