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Inheritance & Estate

Administering an Indian estate as an NRI executor, and the tax on it

You have been named executor of an Indian estate, you live abroad, and you have no idea what that actually requires of you or how the estate is taxed.

A relative named you executor of their Indian estate, and now the responsibility sits with you from thousands of miles away. You have to gather the assets, settle what is owed, deal with banks and registrars, and pass the estate to the beneficiaries, all remotely. On top of the logistics, there is a tax dimension that surprises most executors: while the estate is being administered, the income it earns has to be accounted for, and it is taxed in your hands as executor until everything is distributed.
Last reviewed: 26 July 20268 min readReviewed by Preetesh Maloo, CA

The short answer

You can administer an Indian estate remotely, most commonly by granting a registered power of attorney to a trusted person or a CA in India who acts for you. On tax, the income the estate earns between the date of death and the completion of distribution is taxed in your hands as the executor, assessed separately from your own income (Section 168). A quirk worth knowing: for that estate income, the residential status applied is the deceased's, not yours, so an NRI executor is still assessed on the estate per the deceased's status. Once assets are distributed and taxed in a beneficiary's hands, that income drops out. Your liability is capped at the value of the estate (Section 159).

References on this page

  • Section 168, Income-tax Act: the estate's income is taxed in the executor's hands until distribution
  • Section 168(2): the estate's residential status follows the deceased, not the executor
  • Section 159, Income-tax Act: legal-representative liability, capped at the estate
  • Power of attorney: remote administration by a registered PoA to an Indian agent (practice)

You can run the estate remotely

Being an executor from abroad does not mean flying back and forth. The standard route is to grant a registered power of attorney to a trusted person, often the family CA or a professional, in India, who then deals with the banks, the registrars, the housing society and the tax authorities on your behalf. A power of attorney executed abroad needs to be notarised and legalised or apostilled, and stamped in India, to be usable, which a practising CA arranges.

With that in place, the day-to-day administration, collecting the assets, paying the estate's liabilities, obtaining any grant an institution insists on, filing the estate's returns, is handled on the ground in India while you supervise from abroad. So the practical burden of being an executor is manageable remotely, provided the authority is set up correctly at the start.

The estate's income is taxed in your hands until it is distributed

This is the part most executors do not expect. Between the date of death and the point at which the estate is fully distributed to the beneficiaries, the income the estate earns, rent from a property, interest on deposits, is chargeable to tax in the hands of the executor (Section 168), assessed separately from your own personal income. If there is more than one executor, the estate is assessed as an association of persons.

There is a genuine quirk to flag. For this estate income, the residential status that applies is the deceased's status, not yours. So even though you, the executor, are an NRI, the estate income is assessed according to how the deceased was placed. Once an asset is handed to a beneficiary and its income is taxed in their hands, that income is excluded from the estate's assessment, so the estate is only ever taxed on what it still holds and has not yet passed on.

Your liability, and the eventual distribution

As executor you are a legal representative, responsible for settling the estate's and the deceased's tax, but only up to the value of the estate (Section 159). You are not personally exposed beyond what the estate is worth, which is an important reassurance when you are administering it from a distance.

When assets are eventually distributed, or sold to fund distribution, the tax follows the ordinary rules: a sale of inherited property carries the deceased's cost and holding period, and the buyer deducts TDS under Section 195 where a beneficiary or the estate is non-resident. A practising CA runs the estate's separate assessment while it is being administered, keeps the executor's own return apart from it, and closes the estate cleanly once distribution is complete.

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What's involved

What the CA actually does

  1. 1

    We set up your authority to act remotely

    We arrange the registered power of attorney, correctly notarised, legalised and stamped, so a trusted person in India can administer the estate on your behalf while you supervise from abroad.

  2. 2

    We run the estate's separate assessment

    We file the estate's return for the income it earns during administration under Section 168, kept separate from your own return, and applying the deceased's residential status as the law requires.

  3. 3

    We manage the assets and any grant

    We collect the assets, deal with the institutions, obtain a grant only where one is genuinely demanded, and handle any sale with the cost carried over from the deceased.

  4. 4

    We close the estate cleanly

    We track income out of the estate as assets are distributed, so it is taxed in the right hands, and we close the estate's assessment once distribution is complete.

What to have ready

Documents you'll typically need

  • The will naming you as executor
  • Death certificate, authenticated for use in India
  • A list of the estate's assets and any liabilities
  • The power-of-attorney details for your Indian agent

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next — how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 31 countries.

Frequently asked questions

Common questions

Named executor of an Indian estate from abroad?

Tell us what the estate holds and where you are. A practising CA will set up the authority and the estate's tax on a free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.