A complete summary of Indian real estate inheritance - from foreign and NRI inheritance possibilities to wills and double taxation

Owning and inheriting real estate in IndiaIndividual's Residency Status and Real Estate TypeRegulations vary depending on. It is important to first understand that while acquisition of real estate in India is subject to significant restrictions under the Foreign Exchange Management Act (FEMA), inheritance is allowed with much greater flexibility.

Points that must be pointed out in practice

• Inheritance is more widely accepted than acquisition.Assets whose acquisition is restricted (farmland, etc.) can also be transferred by inheritance, so in most cases, assets in the name of an Indian spouse or parent are inherited without problems.
• Whether or not you are an NRI·OCI is decisive.OCI is not an Indian citizen, but is treated as an NRI in real estate acquisition and inheritance, which is advantageous to Korean-Indian families.
• Since FEMA regulations and RBI circulars are revised from time to time, consult with an Indian lawyer before actually proceeding with the inheritance.The latest version of RBI Master DirectionYou need to check .
• Inherited farmland and farmhouseSeparate approval may be required for sale., there are restrictions on overseas remittance of the sale proceeds, so a disposal plan must be made in advance.

Indian real estate sales and rental practices/blog/real-estate-practicalIt is covered in detail in this section, so we recommend that you read it together from the acquisition stage.

Indian inheritance processThere is a clear difference depending on whether there is a will or not.If you die with a will, you will proceed with 'Testate Succession', and if you do not, you will proceed with 'Intestate Succession'. The latter is much more complicated, from determining the heir to calculating the share, depending on the inheritance laws of each religion and individual. There is an expression commonly used by practitioners. “Six months if there is a will, three years if there is no will.”

Inheritance laws in India vary by religion

Requirements for establishing an Indian will

• testator18 years or olderand must have medical ability
• writing(Oral wills are, in principle, invalid; only special exceptions are recognized, such as for soldiers and sailors.)
• the testator himselfsignature or seal
• 2 or more adult witnessesWitness/signature — However, the witness must not be a beneficiary of the will.
• Registration is not mandatory, but highly recommended.

Four Types of Wills

• Unprivileged Will— Ordinary will. In most cases this form
• Privileged Will— Special will of soldiers and sailors (orally or informally acknowledged during battle or voyage)
• Registered Will— A will registered with the local sub-registrar. Reduced risk of forgery and loss, easy court recognition
• Notarized Will— Notarized will. Less legal than registration

For Koreans, an Indian-style will is required for Indian assets, and a Korean-style will (handwritten or notarized will) is required for Korean assets.written separatelyThis is a way to fundamentally separate jurisdiction and translation issues. If you put both countries' assets in one document, translation notarization and certification requests are repeated in either process, resulting in significant time delays.

When inheritance occurs, the title of the real estate must be transferred to the heir before the actual sale, lease, or mortgage can be established. This process is largely divided into three stages, and the required documents vary slightly depending on the region and whether there is a will.

Step 1 — Death certificate and proof of legal heirs

• Death Certificate— Issued by the municipal corporation (Municipal Corporation) having jurisdiction over the place of death, and must be reported within 21 days of death.
• Legal Heir CertificateorSuccess Certificate— Issued by Tehsildar or competent Revenue Officer, proof of heir status in absence of will.
• If there is a will, the original and copy of the will

Step 2 — When Probate is Required

Probate is the process by which a will is officially certified by a court. Requirement varies depending on region.

• Required area— If a will is made, death is made or the property is located in Kolkata, Chennai or Mumbai (Presidency Towns)
• In principle, unnecessary— Delhi, Gurgaon, Noida and other regions. However, in case of a dispute, the court may request
• Proceeded at the competent high court, usuallyTakes 6 to 18 months. Court fees are charged based on the value of inherited property, so a prior estimate is required.

Step 3 — Mutation (transfer of real estate title)

Apply at Tehsildar Office or Municipal Corporation Registry. Transfer of nameTax list transferThis is not the creation of ownership itself. Ownership is considered to have already been transferred at the time of commencement of inheritance (death). However, in practical applications such as bank loans, sales, and leases, completion of mutation is virtually a prerequisite.

• death certificate
• Legal Heir Certificate or Probate/Succession Certificate
• copy of will
• Sale Deed in original owner's name
• Applicant's ID (passport·PAN·Aadhaar, etc.)
• Proof of recent property tax payment (Property Tax Paid Receipt)

Mutation time is usually 30 to 90 days, but there is significant variation by region. When transferring assets under the name of an Indian spouse to the name of a childFamily Settlement DeedorRelinquishment DeedIt becomes easy to adjust shares between heirs.

This part is the most misunderstood. The sentence “There is no inheritance tax in India” is true, but it is difficult to misunderstand it as “So there is no need to worry about taxes.” The actual double taxation issue isinheritance tax itselfnotCapital gains tax after inheritance and Korean inheritance taxIt occurs in between.

India side detergent

• India isIn 1985, estate duty was abolished.And to date, there is no inheritance tax or gift tax.
• However, inherited real estateCapital Gains Tax when sellingoccurs.
• When calculating capital gainsThe acquisition price is inherited from the original owner’s acquisition price.The holding period is calculated from the date of acquisition by the original owner (divided into long-term and short-term).
• For non-resident (including NRI) sellers, the buyerTax withheld (TDS)Deducted in advance and paid. Tax rates and deduction methods vary depending on tax law revisions, so confirmation is required prior to sale.

Korean detergent

• The deceased or heirKorean residentIf so, Korean inheritance tax law applies.
• When a Korean resident diesProperty around the world is taxable— Also includes Indian real estate.
• When a non-resident diesOnly properties located in KoreaIt is subject to taxation.
• The inheritance tax rate has a progressive structure, and various deductions such as spousal deductions and lump sum deductions are applied. The specific tax rate table and deduction amount areNational Tax Service official informationBe sure to check, and consult a tax accountant for international inheritance.
• The reporting deadline is from the last day of the month in which the inheritance start date belongs.Within 6 months(9 months if the deceased is a non-resident and all heirs live overseas).

Korea-India tax treaty and inheritance tax

Korea-India tax treatyPrevention of double taxation of income tax and corporate taxIt deals only withInheritance tax and gift tax are not included in the treaty.Therefore, inheritance tax is handled entirely in accordance with Korean tax laws, but since there is no inheritance tax paid in India, double taxation of the inheritance tax itself does not occur in practice.

Scenario in which double taxation actually occurs

1. Sell ​​inherited real estate in India → Pay Indian capital gains tax → Income report required under Korean tax law → In accordance with the Korea-India tax treatyForeign tax creditavoid double taxation
2. Remit the sale proceeds to Korea →NRO AccountIn practice throughAnnual limit of USD 1 million(Specific procedures can be confirmed through bank/RBI circulars)
3. Rental income from real estate in India → Withholding tax in India → Joint reporting of comprehensive income in Korea → Tax credit application under tax treaty

In conclusion, international inheritance isIndian CA (Certified Public Accountant) or lawyer and Korean tax accountantDouble consultation is virtually essential. Tax planning in the early stages of settlement in India/blog/setting-inWe recommend that you read it together with the section on determining residency for tax purposes.

No matter how well you handle inheritance, if the documents at the original ownership stage are inadequate, it will eventually lead to disputes. The Indian real estate registration system has large regional differences and cases of forgery are frequently reported.Having complete documentation from the ownership stage is half of preparing for inheritance.no see.

Key ownership documents that must be original

• Sale Deed/Conveyance Deed— Deed of sale/transfer of ownership. the most important document
• Mother Deed— Original ownership documents tracing ownership history for over 30 years
• Encumbrance Certificate (EC)— Certification of no mortgage or burden, issued by Sub-Registrar
• Khata Certificate/Mutation Record— Verification of owner on local tax rolls
• Property Tax Receipts— Proof of property tax payment (minimum 3-5 years’ worth)
• Occupancy Certificate (OC) / Completion Certificate (CC)— Building use approval
• Building Approval Plan— Drawing approval letter
• No Objection Certificate (NOC)— Approval of sale and inheritance by related organizations and associations

Additional information to be checked in Gurgaon and Noida new urban areas

• RERA (Real Estate Regulatory Agency) registration status— Verification of the authenticity of the developer and project
• signed with a construction companyBuilder-Buyer Agreementmanuscript
• In the case of an apartment, the Society'sShareCertificate
• Leasehold vs FreeholdCategory — Many of Noida are leaseholds, so when inheriting, you must check the remaining lease period and extension conditions.

Choosing the form of title — joint title vs. sole title

From an inheritance perspectiveThe choice of name form is crucial.no see.

• Sole Ownership— Upon the death of the owner, the heir is determined by will or inheritance law. If there is no will, inheritance laws according to religion apply.
• Joint Ownership— The share ratio between co-owners is specified in the Sale Deed. Only inheritance of shares occurs.
• Right of Survivorship stated— In principle, automatic transfer to the surviving spouse is possible if this clause is included in the spouse's joint name, but the interpretation of Indian courts differs from case to case, so in practice, it is safer to supplement it with a will.

The characteristics of apartment and office practice in Gurgaon are:/blog/gurgaon-area-guideOn the other hand, the Noida leasehold characteristics are/blog/noida-greater-noida-guideEach part is covered separately.

Inheritance occurs without notice. If you already own real estate in India or are planning to acquire it in the future, simply organizing the following items can significantly reduce the time and cost of inheritance.

Things to organize this week

• Listing of originals and copies of real estate documents — Sale Deed, EC, Property Tax, OC/CC, etc.
• Scanned copies of documentsDual storage in the cloudand share access with spouse and children
• Organizing Indian bank account, PPF, and stock account information —Check whether Nominee (beneficiary) is designated. Since Nominee is closer to a ‘custodian’ than an heir, it must be prepared along with the will.
• Organize PAN card/Aadhaar (e-FRRO registration certificate for foreigners) numbers in a separate document.
• Secure contact information for Indian lawyers and CAs (accountants)

Mid-term preparation for the 1st to 2nd year of appointment

• Writing an Indian Will(For Indian assets, Registered Will strongly recommended)
• Prepare a separate Korean-style will(For Korean assets, handwritten will or notarized will)
• Pre-arrangement and documentation of shares with heir candidates
• Secure an appraisal report for real estate in India (recommended to be renewed every 3-5 years)
• Consider using a trust when necessary — especially when your child is a minor.

Long-term management – ​​preparation for sale, remittance, and tax reporting

• NRO AccountOpening and management — for receiving payment for selling and renting inherited assets
• Compliance with India-Korea remittance limit (practical practice of USD 1 million per year) and prior verification of banking procedures
• When soldTax withheld (TDS)Since tax is deducted in advance, the tax rate is agreed upon in advance with the buyer and broker.
• Manage capital gains tax reporting and Korean comprehensive income tax reporting schedule after sale

3 things to learn from real-life cases

1. Sudden death after leaving the name in the name of an Indian spouse→ There are actually cases where it took more than 3 years to transfer a child's name. It is essential to prepare a joint name or will for the couple.
2. If you only designate a bank deposit Nominee and do not make a will→ Since the Nominee does not inherit the assets but is obligated to pass them on to heirs, final ownership becomes unclear without a will.
3. Inheritance occurs when the original Sale Deed is lost→ The reissuance process takes more than 6 months, and sale and use of collateral are virtually suspended.

The initial administrative and financial setup is/blog/setting-inMeanwhile, Indian payment and account practices/blog/paytm-phonepe-detailedThis is covered in detail in the next section.