Things NRIs should do if they inherit property in India

As a non-resident Indian (NRI) or person of India origin (PIO, formerly Indian citizen but now holding a foreign citizenship), you can inherit any type of property in India—residential, commercial, agricultural, plantation or farm land.

Transferring inherited property in your name

Here’s the documentation required to transfer the title of an inherited property to your name:

A will or a succession certificate: The Indian mindset is such that people don’t make wills. Most of you recognize the importance of this document, but hesitate to broach it with your parent or relative for fear of sounding materialistic. The fact is that the presence of a will—preferably one that is registered—makes it much easier to transfer the title and ownership.

If the will does not exist, you will need to obtain a succession certificate from the court. For this you will need to get together a bunch of documents such as the death certificate of the deceased, your birth certificate, copy of the ration card and your bank statement to prove that you are the rightful heir.

It is always better to discuss property matters while the deceased is alive so that there is neither ambiguity nor a cause for conflict later. It is a lesson for everyone to sort out such matters when alive so that ugly and never ending legal battles are not fought later, with hefty legal fees reducing the value of the inherited asset.

Purchase deed and registration documents: These are a proof of ownership of the deceased and it is recommended that the original documents are stored safely in an accessible place. For very old properties, such documents may not exist, in which case you have to procure certified copies of the title deed from the jurisdictional registrar’s office.

Encumbrance certificate: This is used in property transactions as an evidence of free title/ownership to confirm that the land or property does not have any legal dues nor is it mortgaged and, therefore, has a clear title. It is available at the sub-registrar office where the deed has been registered.

Khata: A khata is an account in the books of the municipal corporation, of assessment of a property, recording details about the property such as size, location, built-up area and so on for the purpose of payment of property tax. It also identifies the person who is primarily liable for payment of property tax.

When the owner of a property changes and the agreement is duly registered, the khata should also be changed in the municipal records. However, this is not how it works in practice and the khata must be transferred separately.

For properties that you are likely to inherit, ensure that the documentation such as purchase deed, registration documents, correct khata entries are all completed, maintained and updated.

Issuing a power of attorney (PoA)

If all your documents are in place, it is possible for you to give a PoA to a relative or friend to carry out this transfer. This may be done to preclude the requirement of your travel to India only for this purpose.

Nature of PoA: Exercise caution when issuing a PoA. A general PoA without specifying the acts and deeds for which the PoA can be used, that is, an open-ended PoA is a recipe for disaster. Money is after all a great motivator for fraud and dishonesty despite the closeness of relationship and the degree of trust between two people. So why risk it? It is better to issue a specific PoA authorizing your relative or friend to do only certain specified and incidental acts or deeds.

Due diligence on PoA: This PoA should be duly notarized by an attorney in the country of your residence followed by attestation at the nearest Indian consulate. This document needs to be registered in India as well by your relative or friend through the adjudication process by paying requisite fees/stamp duty to the department of stamps and registration.

For this, it is recommended to enlist the services of professionals such as a local lawyer and specialized property agencies with experience and expertise at their disposal who can facilitate the process and make the transaction smooth. The need to be diligent in selecting a trustworthy professional with impeccable credentials cannot be over-emphasised.

Stay on top of NRI news with the WelcomeNRI.