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All NRIs

NRI inheritance and gift tax

India has no inheritance tax, but the country you live in may tax your Indian assets.

Illustration of a family passing a home and keepsake between generations across two countries

NRIWallah team

Updated September 2026 · 4 min read

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India has had no inheritance tax since it abolished estate duty in 1985. That does not mean your Indian flat passes to your children free of tax. The UK, the US and some other countries tax their residents on assets worldwide, so an NRI’s Indian property, NRE deposits and Indian shares can be taxed where the NRI lives, and India gives no credit because it charged nothing.

The calculator above shows whether your country of residence reaches your Indian assets, and roughly how much is at stake.

What it can cost

A ₹5 crore flat owned by someone who has lived in Britain for fifteen years is part of their UK estate. The part above the available allowances is taxed at 40%, so the bill can approach ₹2 crore, on an asset that never left India.

Six countries compared

  • UK: 40% on worldwide assets once you have been resident for ten of the last twenty tax years, and for three to ten years after you leave.
  • US: worldwide estate tax for citizens and green card holders, but with an exemption of $15 million from 2026. Non-Americans holding US shares or property get only $60,000.
  • Canada: no inheritance tax, but death counts as a sale at market value, so capital gains tax falls due on the final return. Assets left to a spouse can roll over without tax.
  • Australia: nothing is charged at death. Beneficiaries take over your cost base and pay capital gains tax when they sell.
  • UAE and Singapore: no inheritance, estate or gift tax. In the UAE, consider registering a will (with the DIFC or ADGM wills service, or through the local courts); without one, local succession rules can decide who inherits your UAE assets and bank accounts can be frozen.

In India your heirs pay nothing on inheriting. When they sell, they take over your cost and holding period, so the gain is measured from when you bought, or from the value on 1 April 2001 for property bought before then.

The 1956 UK-India treaty

The Double Taxation Relief (Estate Duty) (India) Order 1956 provides that when someone dies domiciled in India and not in Great Britain, UK inheritance tax is not charged on their property outside Great Britain. It was never rewritten for the long-term residence test introduced in April 2025, so it still takes priority over it. So a person who keeps an Indian domicile may be able to live in the UK for decades and keep their Indian estate outside UK inheritance tax, but only if HMRC accepts that domicile, which it tests closely.

It comes with conditions:

  • Domicile in the general-law sense. You need an Indian domicile of origin that was never replaced by a domicile of choice in England. HMRC contests these claims, and long residence, a British passport and children settled in the UK all count against you.
  • Death only. Lifetime gifts are not covered.
  • Non-UK property only. Your UK home, ISA and pension remain within UK inheritance tax.
  • Not under British law. The relief does not apply to property passing under a disposition governed by the law of part of Great Britain. A single English will covering Indian assets can lose it, which is why a separate Indian will for Indian property matters.

Gifts during your lifetime

India does not tax a gift from a relative, in any amount. Your country of residence may. A UK gift escapes inheritance tax only if you survive seven years, and the 1956 treaty does not cover gifts. A US gift above the $19,000 annual exclusion (2026) uses up part of the lifetime exemption. In Canada and Australia, giving away an asset that has grown in value counts as selling it, so you owe capital gains tax without receiving any money.

India taxes the recipient of a gift; your country of residence taxes the giver. The same transfer can be assessed twice, on two different people.

Next steps

The calculator is a first check, not advice: it tells you whether your Indian assets are inside your country’s tax net and whether a specialist is worth paying. For the Indian side of a return, see the RNOR tracker; for income taxed in both countries, the DTAA estimator. If your heirs will sell Indian property, the property sale TDS calculator shows what the buyer withholds.

The assumption almost everyone gets backwards. India abolished estate duty in 1985 and charges nothing when you die — so people conclude their Indian flat passes to their children tax-free. It often does not. If you are a long-term UK resident or a US citizen or green-card holder, your country of residence taxes your worldwide estate, and a property in Bangalore is part of it. The tax is charged where you live, on an asset that never left India.

Where you live

Invokes the 1956 UK-India estate duty treaty. A high bar, and HMRC contests it — but worth more than any other step if it holds.

What you own

Only the gain is taxed here, so the original cost matters as much as today's value.

Home, pensions, savings, investments held locally.

What catches people out in

What to actually do about it

The link holds the numbers above, so whoever opens it sees the same result. Saving keeps those numbers in your account.Nothing is stored by us.

Keep this result. An NRIWallah account saves it and sets NRIWallah up for where you live, so you don't type it all again.

Save it

What brings you into the net

What happens if you leave

Meanwhile, on the Indian side

When your heirs do sell, the property sale TDS calculator shows what the buyer withholds and what is actually owed — and if any of them are non-resident, they inherit the same no-indexation treatment covered in the rent vs buy calculator.

Common questions

Yes. A green card makes you a US domiciliary for estate and gift tax, so your worldwide estate, Indian property and accounts included, falls within US federal estate tax, with the full exemption of $15 million from January 2026. Most families are well below that. Two points matter more. There is no US-India estate tax treaty to fall back on above the threshold. And only a US-citizen spouse gets the unlimited marital deduction: assets left to a green-card spouse can be taxed on the first death unless they pass through a qualified domestic trust (QDOT).
If you are not a US citizen, green card holder or domiciliary, US estate tax still applies to your US assets, such as US shares and US property, but with an exemption of only $60,000. Above it the top rate is 40%. An NRI in Dubai or London with a $500,000 US brokerage account is exposed. Some investors hold US shares through a non-US fund instead; take advice before restructuring.
Leaving does not end the exposure at once. A UK long-term resident’s worldwide assets stay within inheritance tax for three years after departure if they were resident for ten to thirteen years, rising a year at a time to ten years for anyone resident twenty years or more. In the US, giving up citizenship or a long-held green card can trigger an exit tax under section 877A. The RNOR tracker covers the Indian side of a return.
No. The four-year foreign income and gains regime, which replaced the non-dom remittance basis in April 2025, covers income and gains only. The inheritance tax test, ten out of the last twenty tax years of UK residence, runs separately.
Your spouse; your brothers and sisters and your spouse’s; your parents’ brothers and sisters; your lineal ascendants and descendants and your spouse’s; and the spouse of any of these. Cousins are not included. A nephew or niece receiving from an aunt or uncle qualifies, because the giver is a parent’s brother or sister, but an aunt or uncle receiving from a nephew or niece does not. Gifts from anyone else become taxable for the recipient once the year’s total passes ₹50,000, and then the whole amount is taxed, not just the excess.

Want this checked properly?

Cross-border estates turn on facts a calculator cannot see. Tell us where you live and what you hold in India, and we’ll point you to someone qualified in the right country.

Something went wrong. Please email admin@nriwallah.com directly.

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Every rate and threshold here is sourced, dated and shown on the page — but tax rules change, and we would rather be told than be wrong. Reports go to the team that maintains the tool. If you can point at the official source, that gets it fixed fastest.

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Prefer email? admin@nriwallah.com. How we source and review these numbers is set out in our methodology.

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