As a second-generation Non-Resident Indian (NRI), inheriting assets in India brings both opportunity and responsibility. Real estate, financial holdings, or ancestral property may connect you to family roots while introducing complex legal and financial obligations. Managing these assets from abroad needs careful attention to property laws, taxation rules, and repatriation limits.

With proper planning and expert guidance, you can protect both the emotional and economic value of your inheritance. Look at the insights below to understand how to manage your cross-border inheritance with better clarity and more confidence.

Understanding the legal framework

Inheritance in India usually falls under two systems:

• Will: When a valid will exists, property gets transferred through testamentary succession under the Indian Succession Act, 1925.
• Laws of intestate succession: If a person passes away without a will, intestate succession applies. Here, the property is transferred as per the relevant personal law. For example, the Hindu Succession Act, 1956, applies to Hindus, Jains, Sikhs, and Buddhists.

For NRIs, a well-planned will simplifies the process greatly. A will must identify each asset precisely, name beneficiaries, appoint an executor, and be signed before two witnesses (not beneficiaries). It may be registered, although registration is not mandatory.

Second-generation NRIs can inherit commercial, residential,and agricultural properties, as well as farmhouses in India. If the asset passes from another NRI, approval from the Reserve Bank of India (RBI) becomes necessary to validate the inheritance under the Foreign Exchange Management Act (FEMA).

Documenting ownership post inheritance

Here are the documents essential in almost all inheritance cases:

• Will
• Succession certificate
• Probate
• Death certificate
• Proof of identity
• Address of the heirs
• Original purchase deed and registration documents
• Encumbrance Certificate

Many older properties often lack original purchase deeds due to loss or incomplete record-keeping over decades. In such cases, certified copies of the title deeds from the registrar’s office may be acceptable. After that, the mutation of land or municipal records should be updated to reflect new ownership.

Note: More documents may be required depending on specific circumstances.

Managing assets from abroad

Distance can add complexity to effective NRI banking and asset management. A Power of Attorney (PoA) executed in favour of a trusted relative or advisor in India can simplifytransactions such as registration, renting, or sale. It allows critical decisions to move forward even when you are abroad.

For NRIs, the PoA can be executed abroad before the Indian consulate, then stamped in India within 3 months of receipt. The document must define the representative’s powers clearly.

Complying with legal and tax rules

You pay no tax at the time of inheritance in India. However, income from inherited assets in India, such as rent, sale proceeds, dividends, or interest, remains taxable. The threshold for tax-free gifts is ₹50,000, but gifts from close relatives (e.g., parents, spouse, siblings) and inheritance itself are usually exempt from tax in India.

As an NRI, you should also check whether your country of residence taxes global income or recognises foreign capital gains. It is always wise to consult a cross-border tax advisor to remain compliant in both jurisdictions.

Planning for repatriation of proceeds

Liquidating inherited assets, such as selling property in India, enables NRIs to convert Indian wealth into overseas resources. To repatriate sale proceeds abroad, NRIs are permitted to transfer up to USD 1 million per financial year, provided taxes are paid and proper documentation, including Forms 15CA and 15CB certified by a chartered accountant, is filed.

Documentation evidencing inheritance and legal ownership is often essential to complete the transaction through authorised NRI banking channels.

Estate planning for future generations

For second-generation NRIs, inheritance management is not only about receiving assets but also about preparing the next handover. Many heirs inherit real estate, NRI investment (e.g., stocks), or business interests in India, which can serve as useful components of a diversified global portfolio.

A skilled estate planner can structure these assets using trusts, joint ownership, or tax-efficient repatriation strategies. They help align inherited assets with broader NRI investment goals while supporting a smooth transfer of wealth to the next generation.

To sum up

Effective management of inherited assets in India requires awareness, documentation, and trusted professional guidance. Second-generation NRIs must treat inheritance as both a financial responsibility and a legacy of value. Clear estate planning, lawful repatriation, and transparent family communication can preserve wealth while reducing disputes.

Informed decisions and adherence to regulations can transform inherited wealth into a lasting connection between generations and future financial strength.