Estate planning · Will
Tax on inheritance: is there an estate or inheritance tax in India?
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Facts
There is no estate duty or inheritance tax in India currently. The Estate Duty Act 1953 was repealed in 1985. Inheriting property, investments, or gold from a deceased person is not taxable in the hands of the heir, it is treated as a gift from a relative (exempt under Sec 92, Income-tax Act 2025 (old Sec 56(2)) proviso).
Provisions and law
- Income Tax Act 1961, Sec 56(2) (now 92) | No estate duty currently
Analysis
However: if the inherited asset is later sold, capital gains tax applies, and the cost of acquisition is the cost to the original owner (for pre-April 2001 assets, use FMV on April 1, 2001). Inherited property that generates rent is taxable in the heir's hands from day of inheritance.
Conclusion
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