It is a given that one’s property and assets (including ancestral ones) get passed on to their legal heirs – children, grandchildren or wards – after he/she passes away. In many countries, the heir must pay Inheritance Tax for inheriting any such property or assets from your parents or grandparents or any other relative or friend.

In India, however, the concept of levying tax on inheritance does not exist now. In fact, the Inheritance or Estate Tax was abolished with effect from 1985.  However, provisions of Income tax Act, 1961, clearly exclude a case of transfer under a will or inheritance from the purview of gift tax. Accordingly, law does not provide for taxation of property received by way of inheritance.