Estate Planning in India for NRIs: Wills, Inheritance, Property, Tax, and Repatriation 2026 Guide

For NRIs, there are additional challenges in figuring out what will happen with their belongings after their death. The main objective is to ensure that everything they have in India reaches the right people, is handled and sold or sent back home without unnecessary fights or long delays, and does not violate any rules. The Indian side needs to align with the rules that apply in the country where the family actually lives now.

Most NRIs have several assets at home, be it a house or a shop, family property from their ancestors, HUF shares, bank funds and demat accounts, mutual funds, life insurance policies, a slice of a private business, gold or jewelry, and sometimes inherited agricultural land. They are subject to Indian rules on succession, tax and exchange control. Meanwhile, the owner must comply with laws in other countries, including the United States, Canada, the United Kingdom, Australia, the Gulf countries, and others. There are two legal worlds that interact with the same pile of assets, and they don’t always get along.

This mix is exactly why estate planning gets tougher for NRIs than for regular families living in India. When done right, a plan that crosses borders reduces family arguments, ensures the assets go to the right people, keeps everyone out of court battles, protects property rights, and helps the Indian side work with the foreign side. This guide walks through the key considerations NRIs need to think about in 2026, including important legal shifts that have occurred over the last year and a half.

Why Estate Planning Matters More for NRIs

NRIs face real-world and legal headaches that families living in India usually avoid. Here are the usual ones:  

• Managing or selling Indian property from far away;  
• Matching Indian succession law with the estate rules in the country where they live;  
• Closing Indian bank accounts, demat accounts, and investments after someone dies;  
• Showing legal heirship from outside India, often with attested or apostilled papers;  
• Sorting out disagreements inside the family about ancestral property;  
• Following FEMA rules on inherited or sold property, and  
• Sending sale money back abroad without hitting exchange-control limits.  

Without a solid plan, the people left behind end up chasing papers everywhere, legal heir certificates, succession certificates, letters of administration, no-objection affidavits, and court orders, just so banks, housing societies, or the sub-registrar will do anything. When heirs live overseas or cannot agree, the whole thing drags on for years.

What an NRI Estate Plan Should Cover 

A strong plan usually takes care of these points:  

• A full list of all Indian assets and what is owed;  
• A will written just for Indian assets;  
• Fresh nominations on bank accounts, insurance, demat accounts, and mutual funds;  
• A power of attorney drawn up carefully for managing property while alive;  
• Arrangements for young kids or other dependents;  
• Planning around tax on rent, capital gains, and reporting to foreign tax offices;  
• Ways to send money back that follow FEMA;  
• Making sure the Indian plan fits with any will, trust, or estate setup abroad;  
• Clear title papers for property that came from family or ancestors; and  
• Steps to stop fights over big or shared family assets.  

Why an India-Specific Will Usually Makes Sense

A will can authorize a person to determine who receives what upon his death. For NRIs, it may be best to prepare a separate will that covers only Indian assets, as banks, sub-registrars, housing societies, revenue departments, and Indian courts process it more quickly when the will targets only Indian assets and complies with Indian will-writing rules.

India-only wills will be valid for real estate in India, rights to ancestral property, bank accounts, fixed deposits, listed shares, mutual funds, shares held in unlisted private companies or partnerships, jewelry and other valuables, as well as money owed and business interests in India.

The big mistake to avoid is letting a newer one inadvertently wipe out an older one. The Indian will need clear language stating that it only covers the person’s Indian assets and does not cancel any foreign estate papers, except where it specifically says so. The same kind of clause should go in the foreign will.

Requirements for a Valid Will in India

Under Section 63 of the Indian Succession Act, 1925, a regular will normally needs these things:  

• The person making it must have a clear mind and sign without pressure or unfair influence;  
• The will must show a clear wish to decide what happens after death;  
• The testator must sign it or put a mark, or ask someone else to sign while they watch and direct it; and  
• At least two witnesses must see the signing and then sign themselves.  

In India, a will is not required to be registered, and a properly signed and witnessed will is fully valid even if not registered. Nonetheless, having it registered provides a sense of security to NRIs as it makes it difficult for anyone to say that it was fake in retrospect and provides Indian offices with something they have faith in. 

Notarization, Apostille, attestation by the Indian Consulate or Indian stamping may not be required on papers once they arrive in India, depending upon the purpose of the document, when an NRI has signed the same outside India. A will and a power of attorney stay completely separate documents and should never get mixed up.

2026 Update: Mandatory Probate Under Section 213 Has Been Removed

This counts as one of the biggest recent shifts for people using wills in India. The Repealing and Amending Act, 2025, was approved by the President on 20 December 2025 and will completely repeal Section 213 of the Indian Succession Act, 1925, with related changes to sections 3 and 370.  

In the past, Section 213 applied only to wills made within the former civil limits of the High Courts at Bombay, Madras, and Calcutta and to any immovable property therein; but not to any will by a Hindu, Buddhist, Sikh, Jain, or Parsi, nor to any property other than immovable property. People called this unfair because it depended on religion and where the property sat.  

Now that Section 213 is gone, probate is no longer required in those cases, which should save time and money for most straightforward estates. The Act keeps a savings clause for rights, duties, and cases already in progress. So any estates already in court, probates already granted, and ongoing matters need to be checked one by one.  

Even after this change, banks, buyers, and others might still ask for probate, letters of administration, succession certificates, legal heir papers, or guarantees, depending on the asset, the office involved, and the level of risk they see.  

Probate still exists as an option, but it is no longer mandatory in those situations. It makes sense to get it voluntarily when: 

• Someone is likely to challenge the will;  
• Several heirs exist, and family arguments are active;  
• The estate holds expensive city property, and a clear ownership chain is needed for the next buyer
• A bank, housing society, or government office wants stronger papers;  
• The will was signed under odd conditions; or  
• The executor wants court approval for validity and final closure.  

The law, in simple terms, has shifted from a probate requirement to a free-choice option based on the risks: skip it if there are none, and do it if there are fights or a clean title is involved.

What Happens If an NRI Dies Without a Will

The absence of a valid will means that, in India, assets are distributed according to the deceased’s personal law, based on his religion, family structure, and the nature of the assets.

Intestate cases are governed by the Hindu Succession Act, 1956, for people of the four religions (Hindus, Sikhs, Jains, and Buddhists). Since the change in 2005, daughters have coparcenary rights from birth from the Hindu joint family property.

Muslims follow Muslim personal law, where the freedom to make a will is limited. Someone under this law can usually leave only one-third of the estate freely, with the rest going in fixed shares to legal heirs.

Christians and Parsis use the Indian Succession Act, 1925, with special rules for Parsis.

Since India runs several succession systems side by side, no NRI should expect that a spouse or only child will automatically get everything. A will clears up that confusion and puts the person’s real wishes on paper.

Daughters’ Rights in Indian Property

One of the biggest changes in succession lately is the clear confirmation of daughters’ equal coparcenary rights. The Supreme Court in the Vineeta Sharma v. Rakesh Sharma case held that a daughter is a coparcener from the time of birth itself and the right of a daughter to be a coparcener is not dependent on the father’s existence at the time of the enactment of the Hindu Succession Act of 2005.

For NRI families, this is because old informal splits, verbal deals, or thoughts that a married daughter had given up her share are not necessarily equal to the law today. A daughter’s marriage or living abroad does not disqualify her from inheriting.

Before signing a release, partition, relinquishment, or gift deed, these documents should be thoroughly reviewed. These documents can have a lifelong effect, particularly on ancestral property, HUF assets, or a family agreement.

FEMA Rules for NRIs and OCI Cardholders

NRIs and OCI cardholders must remain aware of the Foreign Exchange Management Act and the Reserve Bank of India’s rules.

NRIs and OCI cardholders can usually buy residential and commercial property in India under FEMA, but they cannot buy agricultural land, plantation property, or farmhouses without special permission.

Inheritance works differently. An NRI or OCI can inherit Indian property, including agricultural land, plantation property, or a farmhouse, as long as the previous owner acquired it legally. The limit kicks in on the next step: inherited agricultural land, plantation property, or a farmhouse usually cannot be sold or given to another NRI or OCI. It must go to an Indian citizen who lives in India.

Since breaking FEMA rules can cause real trouble that is hard to fix, an NRI should check the exact type of property before taking, moving, gifting, or selling anything inherited.

Repatriating the Proceeds of Inherited Property

People often ask if an NRI can sell inherited property in India and send the cash overseas. In most situations, the answer is yes, using the NRO account route, as long as they follow RBI limits, pay taxes, and give the bank everything it needs.

The normal limit is up to USD 1 million per financial year from NRO balances and allowed sale proceeds, including assets gained by inheritance or settlement, subject to certain conditions. Banks generally want to see the following:  

• Proof of inheritance and the death certificate;  
• The will, probate, legal heir certificate, succession certificate, or other ownership paper;  
• The sale deed;  
• Proof that taxes were paid;  
• Form 15CA and a chartered accountant’s Form 15CB if needed;  
• PAN details; and  
• Confirmation that the transfer follows FEMA and the Income Tax Act.

When the amount goes over the automatic limit, or the situation is unusual, RBI approval beforehand may be necessary.  

Indian Tax Issues in NRI Estate Planning

India does not charge a separate inheritance or estate tax just because someone receives property through a will or by normal succession. Assets passed that way usually do not count as income when received. Taxes are due later, when the asset starts earning income or is sold.  

• Rental income from inherited property is taxable in India.  
• Capital gains show up on a later sale. For inherited property, the holding period adds the time the earlier owner held it, and the cost basis usually takes the previous owner’s cost (or fair market value as on 1 April 2001 if that applies). 

The 2024 change is a key point for NRIs. Under the Finance (No. 2) Act, 2024, the long-term capital gains tax on land and buildings has been changed. The rate was changed from 20% with indexation to a flat rate of 12.5% (no indexation) for transfers made after 23 July 2024. A grandfathering choice to pay the lower of the two was added, but it only applies to resident individuals and HUFs. NRIs and OCIs do not get that option: they pay 12.5% without indexation, regardless of when they acquired the property, which can raise the tax bill on property held for many years, even though indexation used to reduce the burden.

When an NRI sells, the buyer must deduct tax at source under Section 195 of the Income-tax Act. In real life, unless the NRI seller obtains a lower- or zero-deduction certificate before the deal closes, buyers often withhold tax on the full sale amount at the full rate, even if the actual gain is much smaller. This creates a cash flow problem for the seller. Planning fixes it.

The solution is to apply early for a lower- or nil-deduction certificate under Section 197 (Form 13), so the buyer withholds only on the real gain. Reinvestment relief in sections 54, 54EC, and 54F continues to be available in its limited form.

Note: For assessment years beginning on or after 1st April, 2026, refer to the Income Tax Act, 2025. There are so many familiar sections of the Income Tax Act, 1961, such as Section 54, Section 54EC, Section 54F, Section 195, and Section 197, which are still discussed by many people and professionals, but read them now with the matching sections in the 2025 Act and any transition provisions. Because the amounts matter, an NRI should get proper tax advice before signing any sale deed.

U.S. Estate-Tax Considerations for NRIs in the United States

NRIs living in the United States have to line up their Indian plan with U.S. estate tax and probate rules, which work on totally different principles. Whereas the U.S. estate tax test of domicile is a test of facts and intent and is not presumed by visa type, green card, or income tax residency.  

An Indian citizen who has U.S. citizenship, or is a citizen of India who is a citizen of the United States, shall be subject to federal estate tax on all assets of his estate, wherever located, including assets in India. The basic exclusion amount for 2026 will increase to USD 15 million per person (or USD 30 million for married couples filing jointly and taking the portability exclusion). The highest rate is 40%. This amount was made permanent and continued to be adjusted for inflation in the One Big Beautiful Bill Act of 2025.  

But the rules for a non-citizen and non-resident are more stringent: They are subject to U.S. estate tax only on U.S. assets, with a modest exemption of USD 60,000, and may have to file a U.S. estate tax return if U.S. assets exceed that amount.  

This part is frequently misunderstood: There is an income tax treaty (DTAA) between the United States and India, but there is no estate tax treaty. So an NRI in the U.S. cannot use a treaty to reduce the U.S. estate tax on American assets, such as U.S. real estate or shares in U.S. companies. That is why the Indian estate plan must never be built alone; Indian succession, Indian tax, FEMA, and U.S. estate tax all need to be considered together. 

State Estate Tax: Don’t Overlook Your State of Domicile

The federal exemption only tells part of the story. About a dozen U.S. states plus the District of Columbia have their own estate taxes, and several set the starting point much lower than the federal $15 million, some without portability for couples and rates that climb into the high teens. The state where you live and any state where you own real estate can tax the estate even if no federal tax applies.

Illinois gives a clear example. Its estate tax exemption is only $4 million, with no inflation adjustment or portability between spouses, and rates that go up to 16%, with a return (Form 700) due to the Illinois Attorney General within 9 months after death. For an NRI living in Illinois, the state estate tax looks at the whole worldwide estate, so Indian property counts toward that $4 million line even though India charges no estate tax, and the federal $15 million would otherwise cover it. An NRI who does not live in Illinois but owns property there can still be required to file once the estate exceeds the threshold. Since Illinois offers no portability, married couples often set up bypass or QTIP trusts to use both exemptions.

Exemptions, rates, and rules vary widely from state to state, so the numbers must be checked for the actual state of domicile and for every state with owned property. The main point stays the same: passing the federal limit says nothing about what the state will do.

A Nomination Is Not a Substitute for a Will

NRIs think naming someone on a bank account, demat account, mutual fund, or insurance policy solves everything. It usually does not.

A nomination simply tells the company who can collect or handle the asset after death; it does not decide final ownership. Normally, the nominee holds everything in trust for the real heirs or beneficiaries named in the will or decided by succession law. Indian courts have said this many times.

Recent changes in banking helped the process. Under the Banking Laws (Amendment) Act, 2025, with nomination rules that took effect on 1 November 2025, a person can now name up to four nominees for deposits, lockers, and safe-custody items. Deposits let you set fixed percentage shares that add to 100%, while lockers and safe custody use priority order. Helpful as that is, it still cannot take the place of a will.

The smart approach is keeping nominations and the will in line. If the will gives an asset to one person but the nomination lists someone else, the family heads straight into conflict.

Power of Attorney for NRIs

A power of attorney helps NRIs a lot while they are alive. It lets a trusted person in India handle property, visit registration offices, sign documents, collect rent, work with banks, and speak on behalf of the owner with government offices.

However, it is not a tool for estate planning. Once the power of attorney is revoked, that is because the person who gave it is dead; otherwise, only the executor, administrator, legal heirs, or beneficiaries can take his place, under the will or succession laws.

NRIs should avoid very wide, unclear, or open-ended powers of attorney. The document needs to be specific, properly notarized or consularized, correctly stamped, and registered where required, especially for immovable property transactions.

Family Settlements, Gift Deeds, and Trusts

Sometimes a will alone does not cover everything, and other options fit better. A family settlement can resolve or prevent disputes among heirs, especially over ancestral or shared property. A gift deed transfers property while the donor is alive, but it may entail stamp duty, registration fees, a tax audit, and FEMA restrictions. A private family trust is useful if you have a high-dollar asset, young or disabled beneficiaries, a mixed family, want to pass on a business, or want to maintain control over management.

For immovable property, trusts require careful drafting and often registration, and they should be checked against Indian income tax, stamp duty, FEMA, and any foreign tax rules before use.

Common Mistakes NRIs Should Avoid  

• Using one all-purpose will for everything worldwide without matching Indian and foreign rules;  
• Thinking a nomination gives full ownership;  
• Forgetting to update nominations after marriage, divorce, birth, or death;  
• Missing daughters’ inheritance rights;  
• Not keeping records of how ancestral property came about;  
• Signing relinquishment or settlement papers without getting advice;  
• Giving an overly wide power of attorney;  
• Ignoring FEMA limits on agricultural land;  
• Selling inherited property without a tax or repatriation plan; and  
• Keeping the original will somewhere the family cannot find it.  

A Practical Estate-Planning Checklist for NRIs  

1. Make a complete list of all Indian assets and liabilities.  
2. Find and check the title papers for every property.  
3. Figure out if each property is self-acquired, ancestral, HUF, jointly owned, or has disputes.  
4. Prepare a will just for Indian assets.  
5. Make sure the will is properly signed and witnessed.  
6. Consider registering it for added safety.  
7. Name an executor in India who can actually get things done.  
8. Update all nominations to match the will.  
9. Review the Indian bank and demat accounts.  
10. Set up a clear power of attorney to manage affairs while alive.  
11. Handle tax and FEMA issues before any sale or sending money back.  
12. Match the Indian plan with U.S. or other foreign papers.  
13. Keep originals in a safe place and let trusted family know where.  
14. Check and update the plan every few years and after big life changes.  

How Kenjay Law Can Help

NRI estate planning brings together Indian law, the laws of the country where they live, tax matters, property documents, and family relationships. Kenjay Law works with NRIs and their families on India-focused estate planning, addressing Indian property and succession questions, drafting wills, preparing power of attorney documents, developing inheritance strategies, and connecting with the right tax and local experts when needed.  

Each family presents their own set of circumstances. Each of these factors, along with the types of assets, family composition, family personal law, citizenship and residence status, location of property, tax considerations, and the likelihood of a dispute, will affect the best plan.

Frequently Asked Questions

1. Do NRIs need a separate will for Indian assets?  

Often, yes. A dedicated Indian will make administration easier and reduce confusion, as long as it aligns with any foreign will, so neither one cancels the other by mistake.  

2. Is registration of a will mandatory in India?  

No. Registration is optional, and a properly signed and witnessed unregistered will works fine. Registration can still help an NRI by creating an official record and stopping later challenges.  

3. Is probate still mandatory in India after the 2025 change?  

No. Section 213 of the Indian Succession Act (assented to on 20 December 2025) was repealed and amended to abolish the previous forced-probate rule. Even for an estate that has been content to probate, it may be advisable for super-high-dollar estates or those with controversy.  

4. Can an NRI inherit agricultural land in India?  

Generally yes. An NRI or OCI can inherit agricultural land, plantation property, or a farmhouse, following FEMA rules, as long as the original owner got it legally. The issue arises when selling it later: such property usually cannot be transferred to another NRI or OCI and must be transferred to a resident Indian citizen.  

5. Can an NRI buy agricultural land in India?  

Typically, NRIs and OCIs are not allowed to purchase agricultural land, plantation property or farmhouses without special permission; however, they are generally allowed to purchase residential/commercial property under FEMA.  

6. Is inheritance taxable in India?  

There is no separate inheritance or estate tax just for receiving property by will or succession. But income from those assets, and capital gains when they are sold later, can be taxable.  

7. Can the proceeds of inherited property be sent abroad?  

In most cases, yes, usually through the NRO route, up to USD 1 million per financial year, as long as taxes are paid, documents are ready, and banks or the RBI are satisfied.  

8. Does a nominee become the legal owner?  

Not necessarily. A nominee usually collects or holds the asset after death, but final ownership follows the terms of the will or succession law. Nominations should match the will.  

9. Does a power of attorney work after death?  

No. A power of attorney does not take effect after the person who gave it has passed away. The estate passes through the will, executor, legal heirs, administration, or court after death.  

10. Should NRIs in the United States worry about the U.S. estate tax?  

Yes. U.S. citizens and U.S.-domiciled individuals are subject to estate tax on all of their assets in the world, and non-resident non-citizens are subject to estate tax on U.S. assets in excess of USD 60,000. With no estate tax treaty between the U.S. and India, cross-border planning is very important.  

11. Will my U.S. state tax my Indian assets?  

It can, depending on where you live. A few states have their own estate taxes with lower exemptions than the federal tax ($15 million) and don’t allow portability. For example, Illinois taxes the entire global estate of a citizen who dies there over $4 million, including Indian property, to which the federal estate exemption would apply. You can also get a separate State filing if you have real estate interests in it. There are many variations in the rules, so make sure to check with your state of domicile.  

Conclusion

For NRIs, estate planning in India has become essential. It is the way families protect property back home, stop arguments, make asset transfers easier, stay on the right side of FEMA and tax rules, and keep the Indian and foreign parts of the estate working together.  

As in any other country, a well-worded will, an accompanying nomination, and comprehensive documentation and guidance covering both countries can prevent years of stress and uncertainty for heirs, more than any single tax advantage; that is the benefit of planning.  

Disclaimer: The information in this article is general in nature and should not be relied upon as legal, tax, or financial advice. Indian rules vary by religion, place of residence, citizenship, property location, property type, and individual circumstances, and the law is constantly changing. It is advisable for NRIs to seek advice from qualified Indian and foreign legal and tax professionals before taking any decision regarding the transfer of property, estate planning, or even repatriation.