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An NRI heir has received an Indian inheritance — a mutual-fund redemption, a sale of inherited property, a distribution from a testator's fixed deposit. The next question: how do you send this money to your foreign account without falling foul of FEMA and the RBI? Here is the complete framework.
The Foreign Exchange Management Act, 1999 (FEMA), and the RBI regulations issued under it govern the movement of foreign exchange between India and other countries. For an NRI heir, the relevant provisions are the Liberalised Remittance Scheme (for outward remittances), the FEMA (Remittance of Assets) Regulations, 2016, and the specific rules for inherited assets in the Master Direction on Remittance of Assets.
Under FEMA, an NRI (as well as a PIO) may remit up to USD 1,000,000 (one million dollars) per financial year (April-March) from the sale proceeds of inherited assets held in India. This includes: inherited immovable property proceeds, inherited financial-asset proceeds (mutual funds, shares, deposits), and any Indian rupee balance held in an NRO account arising from inheritance.
This USD 1 million is per person per year, not per inheritance. If your total inheritance exceeds USD 1 million, you repatriate USD 1 million in year one and the balance in subsequent years. The cap is per financial year, not per calendar year.
For substantial inheritances, this can mean a multi-year repatriation schedule. Some heirs prefer to keep the balance in India in NRO deposits earning Indian rupee interest, and repatriate over multiple years.
To repatriate under the inherited-assets provision, you present the following to your Authorised Dealer bank in India:
Different banks have slightly different documentation requirements. Start the paperwork early — often 2-4 weeks before you plan to remit.
Inherited funds initially land in an NRO (Non-Resident Ordinary) account. To repatriate, you either send directly from NRO to your foreign account, or first transfer NRO to NRE and then remit from NRE.
The NRO-to-NRE transfer requires the same FEMA documentation as direct repatriation — you cannot bypass the compliance by moving the money to an NRE account first.
Repatriation from NRE to a foreign account is comparatively simpler because NRE funds are already deemed to be repatriable, but NRE-to-foreign remittance still requires proper documentation of the underlying source (inheritance).
India does not have an inheritance tax as of 2026. The inheritance itself is not taxed. However, when inherited assets are sold, capital gains apply — computed with the deceased's original cost basis stepped up to the date of inheritance in some cases.
For inherited property sold within 2 years of inheritance, the gain is treated as short-term capital gains (taxed at the applicable slab rate). Sold after 2 years, long-term capital gains apply (12.5% under the July 2024 finance act, without indexation for immovables acquired after that date).
Tax must be paid or provided for before Form 15CB certification. This is why the chartered accountant certification is a key step — the CA confirms the tax position before repatriation.
1. Bank asks for original Will/certificate. Most banks require sight of the original probated document or a court-attested copy — sending a scan by email is rarely sufficient.
2. Bank insists on physical presence of all legal heirs. Some conservative banks require signatures from all heirs on a no-objection form. Coordinate this early.
3. Bank flags a specific asset for additional review. Property sale proceeds sometimes get flagged if the sale value is significantly above or below circle rate. Have the sale documentation ready.
4. Advocate letter required. Some banks want an advocate's opinion letter confirming the applicant is the rightful heir and the inheritance is properly documented.
5. Delay. Even with complete documentation, some transfers take 4-8 weeks. Start early.
Consolidate inheritances into fewer transactions. Rather than repatriating four separate mutual-fund redemptions over 12 months, aggregate them into a single ₹40-lakh remittance with one set of documentation.
Use a bank familiar with NRO/NRE inheritance work. HDFC, ICICI, Axis, and SBI's NRE branches process these routinely. Some smaller banks or public-sector branches move slowly.
Retain all documentation for 7 years. FEMA compliance can be audited retrospectively. Keep every form, certificate, and email in a labelled folder.
For substantial inheritances or complex family situations, engage a chartered accountant who specialises in NRI matters early. The certification cost (₹15,000-₹40,000) is money well spent.
You can repatriate up to USD 1 million per financial year from an Indian inheritance, provided you satisfy FEMA documentation and tax compliance. The process takes 4-8 weeks per transaction and requires proper certification. Plan multi-year repatriation for larger inheritances.
For NRIs whose Indian inheritance planning is significant, our NRI Will service (₹50,000) includes advance coordination of repatriation-friendly asset structures. This is a Personalised or NRI Will territory, not Online Will territory.
This is general legal information, not legal advice. For your specific NRI cross-border succession situation, consult a Law Tarazoo advocate and a chartered accountant.
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