Estate planning in India

Made estate planning guide simple for Indian citizens or the citizen overseas.

Estate planning in India

India doesn’t have inheritance tax. However, you may need to pay income tax, capital gains tax and wealth tax on your inheritance. If you inherited an immovable property,

Property taxes: You’ll also need to pay property taxes. These vary from state to state and even from municipality to municipality, so you’ll have to check the exact figure with the local authorities. 

Capital Gains Tax: This taxes are applied, If you sell an immovable property you inherited, you’ll have to pay capital gains tax on your net profit. This is calculated by subtracting the cost of the property (the price paid by the person who left you the property) and any expenses from the sales price. The rate of tax due will depend on how long the deceased had the property before you sold it. If the deceased had the property for less than three years, capital gains tax is payable at the same rates as income tax. If the deceased had the property for more than three years, however, the rate is 20%.

Wealth Tax: You may be liable to pay 1% wealth tax if the value of certain assets exceeds INR 3,000,000. Assets liable to wealth tax include jewellery, property (unless it’s rented out for at least 300 days a year), cash in excess of INR 50,000, cars, boats and aircraft.

Gift Tax: Giving Gift to Son, will not have any tax impact even though the property price increased from the original value.

Reference

1. Income tax department - Government of India website: http://www.incometaxindia.gov.in/Pages/default.aspx

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