Can NRI Sell Inherited Property in India?

If you are an

NRI selling inherited property in India then you need not worry.

As an NRI (Non-Resident Indian), you can sell inherited property in India. Let’s explore the details:

1. Tax Implications:

   • There are

     no taxes on inheritance of property

     for NRIs.

   • Capital gains tax applies only when the inherited property is

     sold

     .

   • The tax laws specifically exempt assets received through inheritance.

2. Options for Dealing with Inherited Property:

   • Continue Ownership

     :

     • You can choose to

       retain ownership

       of the inherited property.

     • No taxes apply if you own only one property in India and keep it vacant.

     • If you own multiple properties, one will be treated as self-occupied, and others will be deemed to be let out (with notional rent taxed).

   • Rent Out the Property

     :

     • Renting out the inherited property generates

       taxable rental income

       .

     • The tenant may deduct tax at source (31.2%), or you can pay taxes while filing returns.

   • Sale or Gift

     :

     • You can

       sell

       the inherited property to a resident Indian, another NRI, or a PIO (Person of Indian Origin).

     • Alternatively, you can

       gift

       it to a relative (resident, NRI, or PIO).

     • If gifting to a non-relative, the recipient pays tax on the market value of the property received.

3. Repatriation of Funds:

   • When selling the property, consider rules for

     repatriation of funds

     from India.

   • Under FEMA Section 6 (5), you may need

     RBI permission

     to take profits from selling an inherited property out of India.

This is also applicable for US citizen selling inherited property in India.