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Many NRIs want to make substantial charitable contributions to India as part of their estate — funding scholarships, endowing hospitals, establishing family foundations. Here is how to structure these bequests in your NRI Will, and the regulatory considerations that shape the process.
The simplest form of charitable bequest is a fixed sum or percentage to an existing Indian registered charity. Your Will says: '₹10,00,000 to [named charity], to be used for [purpose]'.
Requirements: the charity should be registered under section 8 of the Companies Act 2013 (for section-8 companies), or the Societies Registration Act 1860, or the Indian Trusts Act 1882 (for religious/charitable trusts). 80G-registered charities allow the estate to potentially benefit from certain tax provisions.
For NRIs, one practical caution: check that the charity has FCRA (Foreign Contribution Regulation Act) registration if the bequest is coming from foreign source (i.e., from your foreign estate to Indian charity). FCRA rules have tightened significantly in recent years and many smaller charities have lost FCRA registration.
Alternative: route the bequest through an Indian intermediary structure — e.g., leave the money to your Indian family's charitable trust, which then donates locally without FCRA complexities.
Rather than a lump-sum donation, many NRIs want to fund an ongoing scholarship or endowment. Structure: bequest of a corpus to a specific institution (an IIT, an IIM, a medical college), with directions that the corpus be preserved and only the income used for the specified purpose.
Common patterns: 'to my alma mater IIT Bombay, ₹1 crore corpus, to be invested and the income used annually to fund the '[Name] Memorial Scholarship' for one deserving BTech student from an economically disadvantaged background.'
Requirements: the institution should have a corpus-endowment programme that can accept the bequest with the specified restrictions. Advance discussion with the institution's advancement/alumni office is essential.
For NRI donors, the institution often issues a Memorandum of Understanding acknowledging the terms of the endowment. This MoU is signed during the NRI's lifetime and referenced in the Will.
For substantial charitable contributions (₹5+ crore), many NRI families create their own foundation — a section-8 company or a charitable trust — that operates their giving. This offers control, family involvement, and long-term flexibility.
Structure: incorporate the foundation during the NRI's lifetime (with the NRI as founding trustee/director), and specify the foundation as beneficiary in the Will. The Will directs a specific corpus (or percentage of residuary) to the foundation.
Ongoing operations: the foundation's governing document specifies its charitable purpose, board composition (often family members initially, transitioning to independent trustees), and distribution policy. The Wills of subsequent family generations can continue to add to the foundation's corpus.
For NRIs, the foundation's India-side compliance (income-tax registration, 12A, 80G, FCRA if receiving foreign funds) is essential. This requires ongoing India-based advocacy and accounting support.
The Foreign Contribution Regulation Act 2010 governs receipt of foreign contributions by Indian entities. In recent years, FCRA compliance has tightened significantly — many well-known charities have lost FCRA registration, and new rules require charities to receive foreign contributions only in a specific SBI Delhi branch account.
For NRI charitable bequests from a foreign estate to an Indian charity, FCRA registration of the recipient is required. Verify the charity's current FCRA status before making a substantial commitment.
Alternative: donations from an Indian side of your estate (Indian bank accounts, Indian mutual funds) to an Indian charity do not attract FCRA rules — they are Indian-to-Indian donations. Structure your bequest accordingly.
India does not have an inheritance tax as of 2026. So the charitable bequest itself is not taxed at the estate level.
However: if the estate has capital gains liabilities (from sale of inherited property, for instance) that are being paid before distribution to charity, tax must be provided for.
For the charity, receipt of the bequest is generally tax-free (charities are exempt from income tax on donations received, subject to compliance with section 11-13 of the Income-tax Act and the charity's own registration terms).
The subsequent use of the bequest (for scholarships, medical care, whatever) is governed by the charity's own compliance. Your Will's directions are honoured to the extent they align with the charity's constitution and Indian charitable law.
A well-drafted charitable bequest clause specifies:
This is not Online Will territory. Substantial charitable bequests require Personalised Will (₹25,000) or Succession Planning (₹1,00,000). The advocate can help you evaluate the charity, draft the specific clause, and coordinate with the charity's advancement office where needed.
NRI charitable bequests range from simple ₹1-lakh donations to substantial multi-crore foundation endowments. The right structure depends on the amount, the desired control, and the FCRA/tax considerations.
For small bequests to established charities with confirmed FCRA registration, direct bequest is straightforward. For larger bequests or specific-purpose funds, work with an advocate to structure the clause and coordinate with the recipient charity in advance.
This is general legal information, not legal advice. For your specific NRI charitable-bequest planning, consult a Law Tarazoo advocate.
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