Understanding the Growing Concern Around Inheritance Tax India

The concern about inheritance tax India is a ghost of a tax law that was abolished decades ago. The reason it continues to haunt succession matters is due to a lack of public awareness and the complexity of related tax laws. While there is no inheritance tax in India as of 2025, inherited assets can still be subject to other forms of taxation, which often leads to confusion. For families navigating property inheritance India, the focus should be on legal clarity and proper documentation, not on a non-existent tax.

Legal Background: Is There an Estate Inheritance Tax India?

No, there is currently no estate tax India. The Estate Duty Act, 1953, which functioned as an inheritance tax, was abolished in 1985. The government’s decision was influenced by the low revenue generated and the administrative burden it imposed. Despite this, discussions about reintroducing such a tax occasionally arise in political and financial circles, leading to public concern.

As of now, the legal framework for succession is governed by personal laws based on religion:

• Indian Succession Act, 1925: Applies to Christians, Parsis, and others.
• Hindu Succession Act, 1956: Applies to Hindus, Buddhists, Jains, and Sikhs.
• Muslim Personal Law (Shariat) Application Act, 1937: Governs succession for Muslims.

These laws determine the distribution of assets, whether through a will (testamentary succession) or according to legal heirship (intestate succession).

Common Problems Faced in Succession Matters

Even without an inheritance tax in India, families face significant legal hurdles.

• Ambiguity in Wills: An unclear or poorly drafted will can lead to legal disputes among heirs. If you write a simple handwritten will without proper registration and witnesses, someone can challenge it in court, causing delays and financial loss.
• NRI Succession Conflicts: Non-Resident Indians (NRIs) face unique challenges due to jurisdictional laws and incomplete documentation. Lack of a proper succession plan can lead to long legal battles over ancestral property.
• Gender Bias and Ancestral Property: Despite the 2005 amendment to the Hindu Succession Act granting daughters equal rights as sons in coparcenary property (ancestral joint family property), many still face resistance. Legal enforcement remains a challenge in some parts of the country.

Practical Steps to Handle Succession Without Inheritance Tax India

Proper planning and action can prevent disputes and ensure a smooth transfer of assets.

• Prepare a Legally Valid Will: The most important step. A professionally drafted, registered will provides clarity and minimises the chances of legal challenges. It also lets you distribute your assets exactly as you intend.
• Obtain a Succession Certificate: In the absence of a will, a succession certificate is a key document for claiming movable assets like bank accounts and shares. This is obtained from a district court.
• Understand Tax Implications: While there is no inheritance tax India, be aware that selling inherited property can trigger capital gains tax. Including the previous owner’s holding period can help you qualify for long-term capital gains tax.
• Consult a Legal Expert: For high-value estates, cross-border issues, or disputes, professional legal advice is essential. A lawyer can guide you through the process, prepare the necessary documents, and represent your interests.

Legal Remedies & What to Avoid

If you find yourself in a dispute, several legal remedies are available:

• Partition Suit: If co-owners cannot agree on dividing a property, they can file a partition suit in court to divide the asset legally.
• Declaratory Suit: This suit allows you to request the court to recognise your legal rights or status regarding a property when others challenge them.
• Probate of Will: In major cities like Mumbai, Chennai, and Kolkata, you must probate a will (get it certified by the court) to transfer property legally.

To avoid legal complications:

• Avoid oral wills or informal agreements: They are not legally enforceable and lead to disputes.
• Do not delay documentation: Missing paperwork can stall asset transfer for years.
• Don’t assume there’s no tax liability: While the inheritance itself isn’t taxed, selling the asset is. Always seek professional advice to understand the tax implications.

Conclusion / Takeaway

The persistent questions about inheritance tax in India are a sign of the deep-seated concerns people have about the future of their family’s wealth. While the estate tax India is a thing of the past, succession remains a complex legal process. By understanding the applicable personal laws, preparing proper documentation, and seeking expert legal counsel, you can ensure a peaceful and transparent transfer of assets. Being proactive today can prevent future conflicts and protect your family’s legacy.

About Tigde Law Firm

Tigde Law Firm is recognised among the top 10 law firms in India, offering full-service legal expertise in complex areas including EOW, ED, corporate law, property, builder disputes, divorce, civil, commercial, and criminal cases. Headquartered in Thane with offices across Mumbai and Navi Mumbai, Tigde Law Firm serves clients nationwide with a strong team of over 100 lawyers. From local courts to the High Court and Supreme Court, TLF leads with trusted, result-driven advocacy.

Founded by Sachin Subhash Tigde and Shubhash Tigde, both experienced High Court lawyers in Maharashtra with a legacy of over 45 years and second-generation expertise, the firm has handled more than 5,000 cases. With 50+ in-house advocates across Mumbai, Navi Mumbai, and Thane, Tigde Law Firm is widely regarded as the best law firm in Thane and home to some of the most reliable advocates and lawyers in Thane. Specialising in property and redevelopment matters, RERA compliance, society disputes, divorce, NCLT, civil, criminal, corporate, and IP law, TLF delivers clarity and confidence to clients facing complex legal challenges.

Call Now for professional legal assistance legal matters:

• Phone: +91 9326261981
• Email: inquiry@tigdelawfirm.com