How inheritance tax works in India
India levies no tax on inheritances. Property, shares and cash passing on death reach the heir without any Indian estate or inheritance charge in 2026.
Gifts work differently. Money and property received from specified relatives, on marriage, under a will or from charities are fully exempt. Gifts from non-relatives above INR 50,000 in a year are taxed as income at slab rates.
The heir inherits the donor's cost for capital gains purposes. A later sale is taxed on the gain since the original purchase, not stepped up to the value at inheritance.
Tax rates at a glance
- Estate duty
- 0%Abolished 1985
- Inheritance tax
- 0%
- Gifts from relatives
- 0%
- Gifts from others
- Slab rates
- Annual gift threshold
- INR 50,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FamiliesInvestorsHigh earnersExpatsFamily offices
Watch out for
- The INR 50,000 gift threshold applies to the total from non-relatives in the year. Once crossed, the entire amount is taxable, not just the excess.
- Shares received as gifts carry the donor's purchase price. A tax-free gift today can become a large capital gains bill on a later sale.
- Property gifts and sweetheart sales attract stamp-duty valuation rules. Undervalued transfers can be taxed on the market value difference.
- Calls to reintroduce inheritance tax surface regularly in Indian politics, but none is law. Succession plans should use current statutes and review them yearly.
Frequently asked questions
Does India have inheritance tax?
No. India abolished estate duty in 1985 and has no inheritance tax in 2026.
Are gifts taxed in India?
Gifts from relatives, on marriage, by will or from charities are exempt. Other gifts above INR 50,000 a year are taxed as income at slab rates.
What tax do heirs pay on inherited property?
Nothing on receipt. But a later sale is taxed as capital gains measured from the original owner's purchase cost.