One of the most common issues that arise in the sphere of property disputes is the ambiguity regarding the Will document and the various conflicts therein. This makes it necessary for any individual to understand how the inheritance laws work in India – so that all can understand what their eligibility for inheritance is. The Indian judicial system has separate laws for Hindus, Muslims, Christians and Parsis. A general guideline also exists. These guidelines further also pertain to whether the property is inherited or self-acquired.  Since September 2005, now women have been given an enhanced status regarding inheritance in the property. Historically, men had always been given preference over women for property inheritance and women were not given their share. Post-2005, every daughter (whether married or unmarried) was then given an acknowledged share. She now has equal rights, duties, liabilities, and disabilities that were limited to men earlier.

Legal heirs can inherit any property whether it is self-acquired or ancestral. However illegitimate children or those with a record of crime committed would not stand eligible. Further, legal heirs are classified into Class I and Class II heirs. Any individual can inherit property in India, irrespective of his residency or his citizenship. However, all the transfers taking place must be in conformity with the FEMA (Foreign Exchange Management Act).

An NRI who is a citizen of India can transfer properties to the following:

  • any resident of India
  • a person who is a citizen but not necessarily a resident
  • Any non-resident of Indian origin.

If an NRI is not a citizen, he can transfer his assets only to residents. Similarly, people who are non-Indians can receive properties in India only if they are residents of India. It should be remembered that no inheritance or gift tax is levied in India. However, the person who receives the assets would have to pay Wealth Tax.

Inheritance matters are covered under the personal law that has been followed by the person who has passed away. This could be either the law of the religion or the law of the land. If a foreign citizen stands to inherit property from a deceased Indian, then the law that applies to the appropriate religion of the deceased shall apply.

If, however, the deceased was a foreign citizen then the personal law of his religion or nationality will apply. Inheritance issues are always handled by the main civil court of the original jurisdiction (district judge’s court) where the property is or where the deceased person used to live before his death-or in some cases, where he used to live before he left the country.