Inherited Wealth in India: 7 Tax Rules Every Heir Must Know

• Heirs must file the deceased's income tax return for the year of death and settle any pending tax dues.
• Inheritance itself is not taxed in India, but income generated from inherited assets (rent, dividends, interest) is taxable.
• Report income from inherited assets in your own tax returns under appropriate heads like 'Income from House Property' or 'Income from Other Sources'.
• Capital gains tax applies on the sale of inherited property; the cost of acquisition is based on the deceased's original purchase or fair market value as of April 1, 2001.
• Heirs may be responsible for settling the deceased's outstanding loans and liabilities using the inherited estate before asset transfer.