Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Inheriting is tax-free
India abolished estate duty in 1985 and has no inheritance tax. Receiving property under a will or by succession is not income, so there is nothing to pay and nothing to report simply for inheriting it.
But rent and a future sale are taxed
Once it is yours, rent is taxable as house-property income. And when you sell, capital gains apply — with a helpful twist: your cost of acquisition is the price the previous owner paid, and the holding period includes theirs, so the gain is almost always long-term. Example: your father bought a house in 2001 for ₹10 lakh, you inherit it in 2015 and sell in 2026 for ₹1 crore — the gain is computed from the 2001 cost (or its 2001 fair value), taxed as long-term. The indexation/12.5% options changed in 2024 — confirm which applies.
The TDS and repatriation angle for NRIs
When an NRI sells inherited property, the buyer still deducts Section 195 TDS on the sale value, and you can reduce the gain using Section 54/54EC. To move the money out, use the USD 1 million scheme with 15CA/15CB. Our NRI property service can manage it.