Assessing the Risks of Purchasing Leasehold Property in India
Property

Assessing the Risks of Purchasing Leasehold Property in India

Introduction

In India, the dream of owning a property often comes with the big question—should you opt for a freehold or leasehold property? Leasehold properties have long attracted homebuyers and investors due to their affordability and locations in prime government-allocated areas. However, they also come with a unique set of legal, financial, and practical risks that must be understood clearly before committing.

What is a Leasehold Property?

A leasehold property means the right to occupy and use a property for a specific period, typically between 30 to 99 years, without owning the land itself. The original landowner (often the government or a development authority) leases the property to the buyer (lessee), who then holds rights only for the lease term.

In contrast, a freehold property gives full ownership rights to the buyer over both the land and the building for an indefinite period.

Key Characteristics of Leasehold Property:

  1. Temporary ownership for a fixed period

  2. Land remains under the control of the lessor

  3. At the end of lease term, the rights revert to the lessor

  4. Renewal of lease may involve additional costs and legal complexities

Advantages of Buying Leasehold Property

Before we dive into the risks, let’s briefly look at why people are drawn to leasehold properties:

1. More Affordable

Leasehold properties are generally priced lower than freehold properties of similar size and location, making them appealing to budget-conscious buyers.

2. Located in Prime Areas

Many leasehold plots are in strategically located zones, especially in cities like Delhi, Mumbai, and Hyderabad, developed by government agencies like DDA, MHADA, etc.

3. Low Maintenance Burden

In many cases, major maintenance responsibilities lie with the lessor or development authority.

4. Attractive for Short-Term Living

If you're planning to live in a city temporarily (say, for work or studies), leasehold could be a cost-effective and convenient option.

Legal Framework Governing Leasehold Properties

Leasehold agreements in India are governed by the:

  • Transfer of Property Act, 1882

  • Contract Act, 1872

  • Rent Control Acts

  • State-specific land laws

  • Local development authority rules

The lease deed is the most crucial document, outlining:

  • Lease duration

  • Renewal terms

  • Rent/charges

  • Rights of lessor and lessee

  • Use restrictions

  • Transfer conditions

Major Risks of Purchasing Leasehold Property

Despite the apparent benefits, leasehold properties carry several risks—some of which can have long-term legal and financial consequences. Let's explore them one by one.

1. Limited Ownership Duration

You don’t own the property forever. Once the lease term ends, ownership reverts to the original landowner unless explicitly renewed.

Case Insight:

Dr. KA Dhairyawan & Ors. vs. JR Thakur & Ors.
In this case, lessees constructed a building on leased land. After the lease term ended, the lessors demanded possession. Despite the lessees funding the construction, the Supreme Court ruled in favor of the lessors, stating the lessees had no right over the building once the lease expired.

Lesson: Even if you’ve built on leasehold land, your investment may revert to the landowner without compensation if the lease is not renewed.

2. Complex Lease Renewal Process

Renewing a lease—especially for old properties—can be legally and bureaucratically challenging. You may face hurdles like:

  1. Delay in approvals

  2. Hiked renewal fees

  3. Changed land-use policies

  4. Demands for conversion to freehold at premium rates

3. Restrictions on Transfer or Sale

Selling or transferring a leasehold property often requires:

  1. Prior permission from the lessor

  2. Payment of transfer charges

  3. Adherence to strict conditions outlined in the lease deed

  4. Failure to comply can result in legal complications or cancellation of the lease.

4. Low Resale Value and Financing Hurdles

Banks are often reluctant to offer home loans for leasehold properties, especially if the remaining lease term is less than 30 years. This:

  1. Reduces the pool of potential buyers

  2. Results in lower resale value

  3. Affects liquidity during emergencies

5. Vulnerability During Government Acquisition

If the government acquires leasehold property, the compensation distribution between the lessor and lessee can be tricky.

Case Insight:

Ajit Singh vs. State of Punjab
The dispute was over how compensation should be divided between the landowner and leaseholder during acquisition. The court ruled that the lessee gets only 60% of the compensation, while the lessor retains 40%.

Lesson: Leasehold property compensation can be significantly less than freehold, affecting financial planning.

6. No Arbitration in Disputes

Leasehold disputes must be handled by civil courts and not arbitration panels.

Case Insight:

Himangni Enterprises vs. Kamaljeet Singh Ahluwalia
The court clarified that arbitration does not apply to landlord-tenant/leaseholder disputes under the Transfer of Property Act. This means disputes can lead to lengthy and costly court battles.

7. Difficulty in Getting Building Permissions

Lessee may face issues in:

  1. Getting building plans approved

  2. Undertaking renovations or structural changes

  3. Acquiring completion or occupancy certificates

This is because many lease deeds prohibit major construction without lessor's consent.

8. Lack of Transparency in Lease Terms

Often, lease agreements are vague or not easily accessible to buyers. Ambiguity in:

  • Lease period

  • Use rights

  • Renewal process can create confusion and disputes.

How to Mitigate These Risks

Despite the risks, leasehold property can still be a good option if due diligence is done properly. Here’s how:

1. Check Lease Duration

Ensure that the remaining lease term is at least 30 years or more. This is important for home loans and long-term security.

2. Read the Lease Agreement Carefully

Check for:

  1. Renewal clauses

  2. Transfer restrictions

  3. Usage limits

  4. Maintenance responsibilities

  5. Penalties

Get it vetted by a property lawyer.

3. Prefer Converted Freehold Property

In many cases, you can convert leasehold to freehold by paying a one-time fee. This gives you full ownership rights. Check with the local development authority if this is possible.

4. Obtain Necessary Approvals Before Buying

Make sure:

  • No dues are pending

  • Lease rent is up to date

  • Transfer permission is obtained from lessor

  • Encumbrance certificate is clean

5. Consult Legal and Financial Advisors

Always consult a legal expert and a real estate advisor before purchasing leasehold property. It's a small investment that saves big headaches later.


Comparing Leasehold vs. Freehold Property

Aspect Leasehold Property Freehold Property
Ownership Duration Fixed period (30–99 years) Lifetime ownership
Land Rights Land owned by government/developer Owner has full rights
Price Lower than freehold Higher due to full ownership
Transfer Restrictions Permission needed No such restrictions
Loan Availability Limited for lease <30 years Easily available
Ideal for Short-term use, budget buyers Long-term ownership
Renewal Complexity High (requires legal process) Not applicable
Resale Value Lower resale price Higher resale value

Government’s Role and Policies

Authorities like:

  • Delhi Development Authority (DDA)

  • Haryana Urban Development Authority (HUDA)

  • MHADA (Maharashtra Housing Board)

often allot leasehold properties to individuals and housing societies. Some even offer conversion schemes, like DDA's online freehold conversion portal. Check with local authorities for eligibility and process.

Conclusion

Leasehold properties in India can offer a smart, affordable option for homebuyers and investors, especially in prime locations. However, they come with critical risks such as limited tenure, resale challenges, legal hurdles, and reduced compensation in case of acquisition.

To make a safe and informed decision, it is essential to:

  • Conduct thorough legal due diligence

  • Understand the lease terms

  • Prefer properties with long lease periods or those eligible for conversion

In short, buying leasehold property is not bad—it just requires extra caution.

If you’re ever in doubt, always consult a legal property expert to guide you through the process.

Illegal Possession of NRI Property in India: A Complete Guide to Your Legal Remedies
Property

Illegal Possession of NRI Property in India: A Complete Guide to Your Legal Remedies

NRIs have long struggled with the issue of illegal possession of their properties in India. Due to their physical absence and inability to regularly monitor their properties, these properties often become easy targets for encroachers and fraudulent tenants. If you are an NRI dealing with the challenge of protecting your ancestral or owned property in India, this guide provides a detailed understanding of illegal possession and the legal remedies available to you.

What is Illegal Possession?

Illegal possession refers to the unauthorized occupation of property by someone who is not the rightful owner. This can occur through fraudulent means, such as forged documents, or even through valid agreements where possession has overstayed the agreed-upon period.

For example, if a person enters another's property intending to commit an offense, cause annoyance, or intimidate the rightful owner, they are guilty of criminal trespass. Such unauthorized activities can lead to significant legal complications for the rightful owner.

Common Issues Faced by NRIs

1. Joint Ownership Disputes

When an NRI co-owns a property with non-NRIs, disputes may arise if the non-NRI co-owner takes full control of the property without giving the NRI their due share.

2. Disputes with Tenants

Tenants occupying NRI properties often exploit tenancy laws, refusing to vacate even after their lease period expires. They may also stop paying rent, creating further challenges.

3. Illegal Encroachment

Encroachers often target unoccupied properties, forging documents or misusing legal loopholes to claim ownership.

Why Are NRI Properties Vulnerable to Illegal Possession?

  1. Physical Absence: NRIs cannot visit their properties frequently to ensure they are secure.

  2. Dependence on Others: Many NRIs rely on relatives, friends, or local caretakers, some of whom may act dishonestly.

  3. Unattended Properties: Vacant or poorly managed properties become easy targets for encroachers and squatters.

  4. Lack of Police Notification: Failing to inform the local authorities about tenants or vacant properties can lead to legal complications.

  5. Legal Loopholes: Miscreants exploit tenant protection laws and judicial delays to their advantage.

Steps NRIs Can Take to Protect Their Property

1. Maintain Comprehensive Property Documents

  1. Ensure clear legal titles and registered deeds.

  2. Keep records of purchase agreements, title deeds, tax receipts, utility bills, and inheritance documents.

  3. Store both physical and digital copies securely, and lodge an FIR immediately if original documents are lost.

2. Update Records and Register Ownership

  1. Complete all legal formalities, such as record mutation and registration, as soon as you acquire the property.

  2. Publish a public notice in local newspapers to assert ownership.

3. Secure Vacant Properties

  1. Build a boundary wall around empty plots.

  2. Hire professional caretakers or guards through verified agencies.

  3. Install CCTV cameras and maintain regular communication with neighbors for updates on any suspicious activities.

  4. Use satellite imaging tools like Google Maps to monitor unauthorized construction on your land.

4. Proper Management of Rented Properties

  1. Execute legally binding and registered lease agreements.

  2. Conduct police verification of tenants to establish a strong legal record.

  3. Regularly renew lease agreements and ensure timely rent payments.

  4. Stay in touch with neighbors to be alerted about any unauthorized activities.

Legal Remedies for Illegal Possession

If illegal possession has already occurred, you can take the following legal steps:

1. For Joint Ownership Disputes

  1. Legal Notice: Send a notice to the co-owners through a lawyer, demanding your rightful share or seeking partition.

  2. Civil Suit: File a case for partition, injunction, or possession in the appropriate court to claim your share.

2. For Disputes with Tenants

  1. Eviction Notice: Send a legal notice demanding the tenant vacate the property and clear any pending dues.

  2. Recovery Suit: If the tenant refuses to vacate, file a suit for possession or recovery in court.

3. For Illegal Encroachment

  1. Police Complaint: File an FIR at the local police station, detailing the encroachment.

  2. Criminal Complaint: Approach the Magistrate or the NRI Commission (if available in your state) to seek legal action.

  3. Civil Case: File a suit for possession or declaration of ownership.

Preventive Measures for NRIs

  1. Hire Legal Experts
    Engage experienced property lawyers who specialize in NRI legal issues. They can guide you in taking preventive and remedial actions effectively.

  2. Use Power of Attorney Wisely
    Grant power of attorney to a trustworthy individual for specific purposes and durations only. Avoid granting blanket authority.

  3. Regular Inspections
    Plan periodic visits to your property or hire a professional agency to conduct regular inspections.

  4. Report Suspicious Activities
    Inform the local police station about your property, tenants, and any unusual activities.

What to Do in Case of Illegal Possession

  1. Document the Possession
    Collect evidence, including photographs, videos, and testimonies, showing illegal possession.

  2. Consult a Lawyer
    Seek legal advice immediately to determine the most effective course of action.

  3. Engage in Negotiations
    In some cases, negotiation with the occupying party may help resolve the issue without prolonged litigation.

  4. File Legal Complaints
    Work with your lawyer to file complaints with the police, NRI Commission, or courts to regain possession.

Challenges in Legal Proceedings

Recovering illegally possessed property can be a long and challenging process due to:

  1. Judicial delays.

  2. High legal costs.

  3. The influence of land mafias.

  4. Tenant-friendly laws.

However, persistence and strong legal documentation can greatly improve your chances of success.

Conclusion

Illegal possession of property is a serious concern for NRIs in India. While preventive measures such as securing property, maintaining proper documentation, and hiring reliable caretakers can reduce risks, legal remedies are essential for reclaiming possession in case of encroachment or disputes.

If you are an NRI facing such challenges, consult a legal expert specializing in property disputes. With timely action and the right guidance, you can safeguard your property and secure your rightful ownership.

Selling Property In India As A Non Resident India (Nri) Complete Guide To Using Power Of Attorney
Property

Selling Property In India As A Non Resident India (Nri) Complete Guide To Using Power Of Attorney

Selling property in India can be a complex process, especially for Non-Resident Indians (NRIs) who might not be physically present in the country. One of the most effective tools to manage this process is the Power of Attorney (PoA). This guide will help you understand what a Power of Attorney is, how it can be used, and the steps involved in selling property in India as an NRI.

 

 Understanding Power of Attorney

A Power of Attorney is a legal document that allows you (the principal) to appoint someone else (the agent or attorney-in-fact) to act on your behalf. This can be incredibly useful for NRIs who cannot be present in India to manage their property transactions. The PoA can grant your agent the authority to handle a wide range of tasks, from signing documents to negotiating deals.

 

 Types of Power of Attorney

There are two main types of Power of Attorney:

1. General Power of Attorney (GPA): This grants the agent broad powers to act on your behalf for almost any legal or financial matter.

2. Special Power of Attorney (SPA): This grants the agent specific powers to act on your behalf for particular tasks, such as selling a property.

 

Also Read:  Ways To Resolve Property Disputes In India

 

 Why Use a Power of Attorney for Selling Property?

For NRIs, using a Power of Attorney can simplify the process of selling property in India. It allows you to:

  1. Authorize a trusted person to handle the sale.
  2. Avoid the need to travel to India for every step of the process.
  3. Ensure that the transaction is completed legally and efficiently.

Also Read:  Know about flat Registration Rules in India  

 

Steps to Selling Property Using Power of Attorney

Here’s a step-by-step guide to selling property in India as an NRI using a Power of Attorney:

 Step 1: Choose the Right Person

Select a trustworthy person to act as your agent. This could be a relative, friend, or professional such as a lawyer. Ensure that this person understands your wishes and is capable of handling the responsibilities.

 Step 2: Draft the Power of Attorney

Work with a legal professional to draft the Power of Attorney document. Clearly outline the powers you are granting, specifying that it is for the purpose of selling your property. Ensure all details are accurate to avoid any legal issues later.

 Step 3: Notarize the Document

For NRIs, the PoA document must be notarized. This can typically be done at an Indian embassy or consulate in your country of residence. The notarization process verifies the authenticity of the document and your identity.

 Step 4: Adjudication in India

Once the PoA is notarized, it needs to be adjudicated in India. This involves presenting the document to the relevant authorities in the Indian state where the property is located. This step ensures the document is legally recognized in India.

 Step 5: Engage a Real Estate Agent or Lawyer

Hiring a real estate agent or lawyer in India can help facilitate the sale. They can assist with finding buyers, negotiating terms, and ensuring all legal requirements are met.

 Step 6: Market the Property

Your agent can now market the property. This includes listing it on real estate websites, advertising, and showing the property to potential buyers.

 Step 7: Negotiate and Finalize the Deal

Your agent will negotiate with prospective buyers to get the best possible price. Once a buyer is found, your agent will handle all the paperwork and legal formalities required to finalize the sale.

 Step 8: Transfer of Funds

Once the sale is completed, the funds can be transferred to your bank account. Ensure that all financial transactions comply with the Foreign Exchange Management Act (FEMA) and other relevant regulations.

 

 Key Considerations and Tips

1. Legal Assistance: Always seek legal assistance when drafting and executing a Power of Attorney. This helps in ensuring that all legal requirements are met and reduces the risk of disputes.

2. Clarity in Documentation: Make sure that the PoA document is clear and specific. Ambiguities can lead to misunderstandings and legal complications.

3. Regular Communication: Stay in regular communication with your agent to monitor the progress of the sale and address any issues promptly.

4. Tax Implications: Understand the tax implications of selling property in India as an NRI. You may be subject to capital gains tax, and it’s essential to comply with all tax regulations.

5. Repatriation of Funds: Be aware of the rules regarding repatriation of sale proceeds. You can repatriate up to USD 1 million per financial year, provided you follow the RBI guidelines.

 

Also Read:  Property Registration in Bangalore Step-by-Step Guide Legalkart

 

 Common Questions you may have

 Can I use a Power of Attorney to buy property in India?

Yes, a Power of Attorney can be used to buy property in India. The process is similar to selling, where you appoint an agent to act on your behalf.

 Is the Power of Attorney valid indefinitely?

No, a Power of Attorney is not valid indefinitely. It is generally valid until the principal revokes it or it gets cancelled due to the principal’s death or incapacitation. Additionally, you can specify a validity period in the document.

 What happens if the agent misuses the Power of Attorney?

If the agent misuses the Power of Attorney, the principal can revoke the PoA and take legal action against the agent. It’s crucial to choose a trustworthy person as your agent.

 Do I need to register the Power of Attorney in India?

Yes, for property transactions, the Power of Attorney must be registered with the local sub-registrar's office in India.

 

Also Read:  Online Property Registration

 

 Conclusion

Selling property in India as an NRI can be a seamless process with the proper use of a Power of Attorney. By appointing a reliable agent and following the necessary legal steps, you can ensure a smooth and efficient property transaction. Always consult legal professionals to guide you through the process and safeguard your interests.

By understanding and leveraging the Power of Attorney, NRIs can manage their property transactions in India effectively, even from afar. This guide aims to simplify the complexities and help you navigate the process with confidence.

 

 

 

 

 

 

What is RERA Act
Property

What is RERA Act

Like all laws, RERA Act also has certain legalese in it. There are certain legal terms which are not easily understood by the common people. We try to simplify these legal terms for you and bring a ready explainer for the same.

Let us explore some of the real estate jargons in the RERA Act.

Carpet Area

RERA Act defines carpet area as the “net usable floor area of an apartment”. Carpet area excludes the area of external walls, lifts, balconies etc. Internal walls however fall under the definition of carpet area. Before RERA, the definition of carpet area was not legally given and hence, there was a lot of confusion regarding this. The builders often took advantage of this ambiguity. With a clear definition in place, homebuyers can now rest assured. 

Consulting a Lawyer is always useful for quick and authentic information about RERA Act.

Super Built-Up Area

Before we understand super built-up area, it is important to understand the meaning of built-up area. Built up area includes all areas of your flat (carpet area + balconies, walls etc.). Super built-up area includes built-up area plus your proportional share in the common areas of your building. For instance, if your building has common pathways, parks etc., these would also be included in the term super built-up area, in proportion to your share in them.

Typical common areas included in a super built-up area are: 

  • Staircases

  • Lobbies

  • Lifts

  • Club house

  • Security rooms

However, the super built-up area, does not include the following: 

  • Underground water facilities. 

  • Open swimming pools and skywalks

  • Open sports amenities. 

Occupancy Certificate

An occupancy certificate is the evidence that the building is inhabitable and that its construction is in compliance with all rules and regulations. It is issued by a local government, agency or planning authority. It is the developer of the building who needs to obtain the occupancy certificate. Occupancy certificate needs to be shown at the time of obtaining public utility connections. Typically, a developer applies for an occupancy certificate within 30 days of the completion of the project. The developer or the person applying for an occupation certificate should furnish the following documents: 

  • Project commencement certificate

  • Project completion certificate

  • NOCs for fire and pollution

  • Sanctioned plan of the building. 

People Also Read This: Land & Property Registration: All You Need To Know

RERA Registration Number

RERA mandates that all real estate developers register under it. RERA registration acts as a stamp of credibility. Once the process of RERA registration is complete, the real-estate developers obtain a RERA registration number. This RERA registration number acts as a proof of authenticity that the project is credible and that buyers can put their money in it. 

Floor Space Index

Floor space index, also known as Floor area ratio, is the ratio of the built up area to the total land of the project. Floor space index is important as it indicates the total area that can be built upon a plot of land. The development control regulation department and the building code of India regulate the floor space index. The type of building, which city it is located in and the amenities available in the building are factors taken into account while determining the floor space index. Floor space index helps in maintaining the ratio of open space to closed spaces and helps in sustainable development of cities. 

Leasehold Property

A property which has been taken on lease is a leasehold property. Builders and real-estate developers, build their projects either on leasehold properties or freehold properties. Leasehold properties are typically on lease from 30 to 99 years. Once, the leasehold period gets over, they convert to freehold properties. Buyers prefer freehold properties to leasehold properties, as certain restrictions operate on leased land. 

People Also Read This: Delay in Providing Possession of Flats and RERA's Role

Freehold Property

A freehold property absolutely belongs to the owner. The developer may purchase the same form the owner for the purposes of development of the project. Unlike leasehold properties, no statutory approval is required to transfer the ownership of a freehold property. It is easier to get loans for freehold properties and no restrictions are imposed on the same. 

Pre-Launch Properties

You would have heard about pre-launch properties or pre-launch offers. A pre-launch property is a property whose launch has been announced, even before the approval process is underway. Typically, builders solicit offers from customers, who could be old customers or through real-estate agents a discounted prices for pre-launch offers. Such offers and properties attract potential buyers’ attention as they are available at prices lower than the market value. 

These are a few terms or legal jargons which are widely used in the real-estate sector. RERA Act, also uses these terms in its provisions. It is hence, important that you as a customer should know what these jargons mean and make an informed decision, while buying any property. 

People who read this Article also Consulted a Lawyer about RERA Act. 

Soumya Shekhar
Soumya Shekhar 03 min read 3706 Views
Inheritance Rights in India - Legal Advice - Legalkart
Property

Inheritance Rights in India - Legal Advice - Legalkart

You inherit property when your parents or grandparents, or any other relative pass away. This inheritance can either be through a will or intestate succession. Intestate succession means that the property will pass on to your legal heirs through rules created by the laws of succession. Different personal laws govern the rights of heirs to an estate. Many people do not know how inheritance rights function and this lack of knowledge leads to issues during partition or succession. Through this article, we will tell you how heirs' rights to property function in India. 

 

The Right to Inherit Property

Before we discuss the heir property rights, it is essential to understand the two types of property. Typically, a property is of two types: 

  • Ancestral property: Such property is passed on through generations. An heir typically has a right over an ancestral property by his birth. 

  • Self-acquired property: A self-acquired property is a property that the owner has earned through his efforts. 

A property becomes your own only when you can legitimately claim to exercise some rights over it. For instance, your neighbor's house is not your property because you don't have any rights over it. However, your own house is your property because you can legitimately exercise some rights over it. Thus, acquiring a property means becoming capable of exercising some rights over it. 

Property can be acquired in many ways. You can enter into an agreement with another person, such as a sale deed for the sale of their land to you, and thus acquire that property. There are many other such modes. Inheritance is one of them. Thus, when you inherit a property, the consequence is that you will be able to exercise some rights over it. 

As mentioned above, the Law of Inheritance will decide who the new owners of your estate will be. Certain persons will inherit defined shares of your estate. These persons are known as your' heirs'. Each of your heirs will have a right in your estate. 

Illustration — According to the applicable Law of Inheritance, your son S, daughter D, and mother M are your successors. Each of them is entitled to inherit 1/3 of your estate. Thus, S, D, and M will each have the right to inherit 1/3 of your estate. These are the inheritance rights of S, D, and M about your estate. Once inheritance occurs, S, D, and M will have acquired 1/3 of your estate each. 

 

The Law of Inheritance in India

There is no uniform Law of Inheritance in India. Instead, the Law of Inheritance varies based on one's religion. A small part of the Law of Inheritance is the same for all religions. However, the vast majority of it varies by religion. Thus, Hindus, Muslims, Christians, Parsis, etc., are each governed by their largely by their own, unique Laws of Inheritance. 

The religion of the deceased governs, which Law of Inheritance will govern the succession of their estate. Thus, when a Hindu dies, then the succession of their estate will be governed by the Hindu Law of Inheritance; when a Muslim dies, then the succession of their estate will be governed by the Muslim Law of Inheritance, and so on. 

People Also Read This: What Does the Succession Law Say?

Inheritance Rights in Parents' Property

As a child, you generally have the right to inherit some portion of your parents' property. However, your parents are perfectly capable of varying your share, or depriving you of your full share (thus completely disinheriting you), by executing a Will to this effect. 

In India, the traditional mindset has excluded women's rights in parents' property. Before 2005, a daughter was only a member of the family and not a coparcener. A coparcener has the right to inherit the property; a member does not. A member can only ask for maintenance. After 2005, now daughters have also become coparceners and have an equal right to inherit parents' property.

Classically, in some religions, a daughter's marriage deprived them of their right to inherit their parents' property. However, this is no longer the case. Today, marriage alone will not affect your inheritance rights. A married daughter has the same rights to inherit her parents' property as an unmarried daughter does. 

Those who read this Article also Consulted a Lawyer about Property inheritance process. 

Women's Inheritance Rights in India

Women, before 2005, were looked upon as members and not coparceners. Hence, they did not have a right to inherit the property. Let us understand women's inheritance rights in India vis-à-vis the different positions women hold in the family: 

Wife: A wife is entitled to her husband's property. A woman's property rights do not vary after her husband's death. 

Daughter: After 2005, if you are a daughter, you are also a coparcener in your father's property and hence have a right to inherit property. Today, your gender as a woman alone is of little consequence. As a woman, you have more or less the same inheritance rights as a man of your generation. Thus, a woman has essentially the same inheritance rights in her parents' property as a son; a granddaughter has essentially the same inheritance rights in her grandparents' property as a grandson, and so on. A woman can acquire, and hold, property at par with a man. Marriage generally does not deprive a woman of her inheritance rights. 

While rules of Intestate Succession govern the distribution of a property where no will is left behind, it is preferable that you take legal help and prepare and register a Will. Inheritance through a Will is easier and smoother.

Soumya Shekhar
Soumya Shekhar 03 min read 4102 Views
How to inherit property in India
Property

How to inherit property in India

Inheritance of Property After Death

Throughout your life, you have accumulated a number of properties. All of these properties, taken together, comprise your estate. If you want to choose whom your properties pass on to, you should frame a will of inherited property. If you do not frame a will then the property succession will happen as per law of inheritance. Let us see how property is inherited in India

Inheritance of Property in India

The Law of Inheritance, also known as the Law of Succession, controls the process of inheritance. Property succession in India is of two types:

  1. Testamentary Succession: You may choose to execute a Will. The Will, by definition, will specify who will inherit what shares of your estate. In such a case, succession will take place according to the instructions contained in your Will. When succession takes place in this manner, it is known as testamentary succession. 

  2. Intestate Succession: You may also choose not to execute a Will. However, someone must still inherit your property. The Law of Inheritance has a built-in contingency for such cases. The law specifies certain persons as your legal heirs, who are entitled to defined shares of your estate after your death. When succession takes place in this manner, it is known as intestate succession. 

Succession will be either testamentary or intestate. It cannot be both at the same time. If you leave behind a Will, the succession of your estate will be testamentary. If you don’t, it will be intestate. 

Legal Inheritance of Property

Testamentary Succession

Testamentary succession will occur if you leave behind a Will. 

Every mentally sound adult is capable of executing a Will. A Will is a legal document that contains instructions to govern the inheritance of your estate. It will specify (i) who will be entitled to your estate and (ii) the shares of your estate each of them will be entitled to. The persons who are entitled to inherit under your Will are known as your legatees. Any person can be a legatee, even a person who is not your relative. 

The Indian Succession Act, 1925 is the uniform Law of Testamentary Succession which governs everyone except Muslims. Muslims are governed by their own Muslim Law of Testamentary Succession. 

You have practically unlimited discretion to decide, your legatees and the shares of your estate each will inherit. Generally, all of your property can be bequeathed by a Will. However, if you are a Muslim, then you cannot bequeath by a Will any more than 1/3 of your estate, unless your legal heirs consent to exceeding this cap. There is no such limitation for anyone else. 

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The manner of executing a Will differs, based on whether you are governed by the Indian Succession Act, 1925 or the Muslim Law of Testamentary Succession: 

  1. Unless you are a Muslim, you must follow the procedure in the Indian Succession Act to execute a Will. The Will must be written, and you must sign or affix your thumb impression on it. It must be attested by at least two witnesses who have seen you sign it. A Will can be executed on plain paper. It is not necessary to execute it on stamp paper. It is also not necessary to be registered. 

  2. If you are a Muslim, there is an even simpler procedure to execute a Will. Your Will need not be signed or written. It can even be oral. There is no need for attesting witnesses. The only requirement is that your intention should be clear. However, oral wills are notoriously difficult to prove. Hence, it is always prudent to execute your Will in writing, even though it is unnecessary. 

After your death, someone has to take the responsibility of carrying out the instructions in your Will. This process is known as the execution of the Will, and the person who does it is known as the executor. They will ensure that the specified shares of your estate are bequeathed to the respective legatees. There can be multiple executors. You have the option to specify the sole executor, or co-executors, of your Will in the Will itself. Remember to take their consent. Do give some thought to your choice of an executor, as this person will be the one responsible for executing your Will. If you don’t appoint an executor, or the executors refuse to act as executors after your death, the competent court can appoint some of your legal heirs as the executor[s]. 

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Intestate Succession

Intestate succession will occur if you don’t leave behind a Will. The applicable Law of Intestate Succession will govern the succession of your estate. 

There is no uniform Law of Intestate Succession in India. Rather, it varies based on one’s religion. Thus, Hindus, Muslims, Christians, Parsis, etc., are all governed by their own separate Laws of Intestate Succession. For instance, the law for Hindus is contained in the Hindu Succession Act, 1956, the law for Christians is contained in the Indian Succession Act, 1925, etc. 

Your religion will determine which Law of Intestate Succession will govern the succession of your estate. Thus, if you are a Hindu, then the Hindu Succession Act, 1956 will govern; if you are a Christian, then the Indian Succession Act, 1925 will govern, etc. 

Regardless of which Law of Intestate Succession applies, at the highest level, all of them operate similarly: each of your legal heirs will inherit specific shares of your estate. The legal heirs, and the shares they are each entitled to, will vary based on the number of legal heirs alive and their relationship with each other. For instance, consider a married Hindu male. If you are a Hindu married male, ordinarily, your wife, sons, daughters, and mother are your legal heirs. They will each take an equal share of your estate. Thus, if you are survived by a wife, mother, one son, and one daughter, each of them will take a ¼ of your estate. However, if your daughter is dead, but she is survived by her only daughter (your grand-daughter), the grand-daughter will become an additional legal heir entitled to her mother’s share. Thus, she will inherit ¼ of your estate.  

Hence, the inheritance of property in India is a complex process, and in the absence of a will, is governed by property succession laws.