India–US Life
Inheritance Across Borders: The Complete India–US Playbook
6 min read · Updated July 12, 2026
When parents' assets in India pass to children in America, two legal systems meet — and the essentials are simpler than the anxiety suggests. India taxes nothing on inheritance; the US taxes nothing on receiving it; the work is procedure and disclosure, and here is all of it.
The India side: establishing the right to inherit
India has no inheritance or estate tax — abolished decades ago. What exists is procedure: with a valid will, probate where required (mandatory in the presidency towns' jurisdictions — Mumbai, Chennai, Kolkata — for wills covering property there); without a will, succession follows the deceased's personal law (Hindu Succession Act for Hindus/Sikhs/Jains/Buddhists, the Indian Succession Act's rules for Christians, Muslim personal law for Muslims), with heirs established through legal-heir or succession certificates depending on the asset class.
NRIs and OCIs can inherit every category of Indian property — including the agricultural land they're barred from buying. Practical transmission runs asset by asset: banks want the certificate plus KYC; demat accounts have transmission forms; property mutation happens at the local registrar/municipal office. Nominations on Indian accounts ease transmission but nominees legally hold for the heirs — the will still governs.
The US side: no tax, mandatory disclosure
Receiving an inheritance is not taxable income to a US person — no US tax on the corpus, whatever its size. But disclosure is mandatory above thresholds: foreign inheritances/gifts aggregating over $100,000 from an individual in a year require Form 3520 with your return — an information filing with disproportionate penalties for lateness, which is why it's the one form in this guide to never miss.
The moment assets are yours, the standing regimes attach: inherited Indian accounts count toward FBAR and FATCA thresholds immediately; income the assets generate (rent, interest, dividends) is normal reportable income with treaty credit relief; and US basis rules for inherited property (including the step-up questions for foreign assets) are precisely the item to hand a cross-border CPA in the inheritance year.
Moving the money, and planning ahead
Repatriation runs through the NRO channel: inherited funds and property-sale proceeds move under the USD one-million-per-financial-year facility with a chartered accountant's Form 15CA/CB certification and documentation of the inheritance (will/succession certificate, tax clearances). Banks' NRI desks process this routinely; the paper trail is everything.
Planning while parents are alive beats every procedure above: parents' Indian wills drafted and registered, nominations current across accounts, a family asset inventory someone in America actually possesses, and — where families prefer — lifetime gifts, which India doesn't tax between close relatives and the US doesn't tax to the recipient (same Form 3520 disclosure above the threshold). See our wills guide for the document set on both sides.