In short
India has no inheritance or estate tax, and property received under a will or by inheritance is exempt. A gift of money from a person who is not a relative is taxed as income of the recipient once the total received in a tax year exceeds 50 000 rupees, and then on the whole sum, not only the excess (Income-tax Act, 2025, s. 92(2)(m) and 92(3), in force from 1 April 2026).
Income-tax Act, 2025, s. 92 (Income Tax Department)All calculators and country guides
Law as read on 2 November 2026.
Key figures
- India levies no inheritance or estate tax. Estate duty was abolished in 1985.
- Property received under a will or by inheritance is exempt from income tax, without limit.
- Gifts from relatives, as defined by the income tax law, are exempt whatever their amount, according to the Income Tax Department.
- Gifts from non-relatives are taxable as income in the recipient's hands once they exceed 50 000 rupees in a financial year, and then on their whole amount, not only the excess.
- The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. Gifts are now charged by s. 92(2)(m) of the new Act, in place of s. 56(2)(x) of the old one.
- Under the new regime, the default, income up to 12 lakh rupees is tax free for a resident, and the rate reaches 30 per cent above 24 lakh rupees (s. 202(1) and s. 156 of the 2025 Act).
Tax on a gift from a non-relative
An estimate under the new regime, the default for individuals. Only gifts from people outside the legal definition of relative go in the amounts below.
Points to note
- Exempt whatever the amount: gifts from relatives, gifts on the recipient's own marriage, and anything received under a will or by inheritance.
- Relative means the spouse, brothers and sisters, the brothers and sisters of the spouse and of either parent, lineal ascendants and descendants of the recipient or of the spouse, and the spouses of all of these.
- The 50 000 rupee test applies separately to money over the year, to other movable property over the year and to each immovable property. Above it the whole amount is taxed.
- Not modelled: the old regime, the taxation in India of a gift to a non-resident, special-rate income in the other income, and rounding to the nearest ten rupees.
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Worked examples
Three typical cases, worked out with this calculator's own rules. Reliefs it does not model are left out.
| Case | Assumptions | Result | Legal basis |
|---|---|---|---|
| Resident, cash from a friendComputed by this calculator | AssumptionsResident under the new regime; other income 1,000,000 INR; 500,000 INR received from a person who is not a relative; tax year 2026-27. | ResultThe whole 500,000 INR is taxable; income tax on the gift 109,200 INR, cess included. | Legal basisIncome-tax Act, 2025, ss. 92(2)(m), 156, 202(1) |
| Gift under the thresholdComputed by this calculator | AssumptionsThe same resident receives 40,000 INR in the year from people who are not relatives. | ResultTax 0 INR: the total does not exceed 50,000 INR. | Legal basisIncome-tax Act, 2025, s. 92(2)(m) |
| Non-resident, property received freeComputed by this calculator | AssumptionsNon-resident with no other Indian income receives a property with a stamp duty value of 2,000,000 INR from a person who is not a relative. | ResultIncome tax 208,000 INR: the resident rebate does not apply. | Legal basisIncome-tax Act, 2025, ss. 92(2)(m), 156, 202(1) |
No inheritance tax, but a tax on some gifts
Estate duty was abolished in 1985 and the gift tax in 1998. Since then, what is taxed is not the transfer but the receipt: a gift from a person who is not a relative is treated as income of the recipient, at the recipient's own rate, once the total received in a financial year exceeds 50 000 rupees.
Three exemptions cover most families. Gifts from relatives within the legal definition, gifts received on one's own marriage, and anything received under a will or by inheritance are exempt, without any limit.
How a gift from a non-relative is taxed in 2026
Section 92(2)(m) of the Income-tax Act, 2025 counts as income what a person receives in a tax year without consideration, or for too little, from any person. The 50 000 rupee test applies to the total received in the year, and once it is passed the whole sum is taxed, not only the excess.
| What is received | When it is taxed | Amount taxed |
|---|---|---|
| Sum of money, without consideration | Total in the tax year above 50 000 rupees | The whole sum |
| Immovable property, without consideration | Stamp duty value above 50 000 rupees | The stamp duty value |
| Immovable property, for less than its stamp duty value | Difference above 50 000 rupees and above 10 per cent of the price paid | The difference |
| Other property, without consideration | Aggregate fair market value above 50 000 rupees | The whole aggregate fair market value |
| From a relative, on one's own marriage, under a will or by inheritance, or in contemplation of the donor's death | Never | Nothing (s. 92(3)) |
Income-tax Act, 2025, s. 92(2)(m) and 92(3), read on the Income Tax Department portal on 2 November 2026
Income-tax Act, 2025, s. 92, on the Income Tax Department portal
Who counts as a relative
The definition is statutory and narrower than family usage. It covers the spouse, brothers and sisters, the brothers and sisters of the spouse and of either parent, and lineal ascendants and descendants, with their spouses. A cousin, or a nephew or niece, is not a relative for this purpose, and a gift from one of them above the threshold is taxable.
Which law divides the estate
Succession law in India depends on religion. The Hindu Succession Act, 1956 governs Hindus, Buddhists, Jains and Sikhs; the Indian Succession Act, 1925 governs Christians, Parsis and others; Muslim personal law governs Muslims. A will is the way to depart from the default shares, within the limits each of these regimes allows.
What an heir should plan for
The inheritance is not taxed, but its later sale is. Capital gains on an inherited asset are computed on the cost and holding period of the previous owner, which can turn an old family property into a large taxable gain on sale.
For a non-resident heir, bringing the proceeds out of India is governed by the Reserve Bank of India's exchange control rules, which limit and document repatriation. The timetable deserves planning before the sale, not after it.
| Taxable slice | Rate |
|---|---|
| Up to 4,00,000 INR | 0 % |
| From 4,00,000 up to 8,00,000 INR | 5 % |
| From 8,00,000 up to 12,00,000 INR | 10 % |
| From 12,00,000 up to 16,00,000 INR | 15 % |
| From 16,00,000 up to 20,00,000 INR | 20 % |
| From 20,00,000 up to 24,00,000 INR | 25 % |
| Above 24,00,000 INR | 30 % |
Income-tax Act, 1961 s. 115BAC(1A); Income-tax Act, 2025 s. 202(1)
Questions
› Is there inheritance tax in India?
No. There is no inheritance or estate tax, and property received under a will or by inheritance is exempt from income tax.
› Is a gift from my parents taxable?
No. Parents are relatives within the legal definition, and gifts from relatives are exempt whatever their amount.
› Is a gift from my cousin taxable?
It can be. A cousin is not a relative for this purpose. Once the gifts received from non-relatives in the financial year exceed 50 000 rupees, the whole amount is taxable as income.
› Do I pay tax when I sell an inherited property?
Yes, on the capital gain, computed on the cost and holding period of the person you inherited from.
› Did the new Income-tax Act change the rules on gifts?
The substance is carried over. For income received from 1 April 2026, gifts are charged by s. 92(2)(m) of the Income-tax Act, 2025, with the same 50 000 rupee threshold and the same exemptions in s. 92(3). Income received before that date stays under s. 56(2)(x) of the 1961 Act.
› Is a gift from a non-relative taxable in India in 2026?
India has no inheritance or estate tax, and property received under a will or by inheritance is exempt. A gift of money from a person who is not a relative is taxed as income of the recipient once the total received in a tax year exceeds 50 000 rupees, and then on the whole sum, not only the excess (Income-tax Act, 2025, s. 92(2)(m) and 92(3), in force from 1 April 2026).
› What is the 50,000 rupee limit?
Section 92(2)(m) of the Income-tax Act, 2025 counts as income what a person receives in a tax year without consideration, or for too little, from any person. The 50 000 rupee test applies to the total received in the year, and once it is passed the whole sum is taxed, not only the excess.
› Who counts as a relative?
The definition is statutory and narrower than family usage. It covers the spouse, brothers and sisters, the brothers and sisters of the spouse and of either parent, and lineal ascendants and descendants, with their spouses. A cousin, or a nephew or niece, is not a relative for this purpose, and a gift from one of them above the threshold is taxable.
Sources
The Income-tax Act, 2025 and the Finance Acts 2025 and 2026 as published in the Gazette of India, and Income Tax Department guidance. The calculator is checked against the identities the statute states: the slab table, the nil tax up to 12 lakh rupees and the marginal reliefs.
This page is educational and does not constitute legal or tax advice. Succession in India turns on religion, residence and the nature of each asset.
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