Moving a late parent's Indian shares and mutual fund units into your name as an NRI heir

The word to hold onto is transmission. When a shareholder or unit-holder dies, their securities do not vanish and they are not sold — they are re-registered into the name of the person entitled to them. For shares held in demat form, this is done through the depository participant (the broker or bank where the demat account sits) and the depository; for mutual fund units, through the registrar and transfer agent — the RTA, such as CAMS or KFintech — or the asset management company directly.

Because it is a re-registration and not a disposal, transmission is not itself a taxable event — India has no inheritance tax, and the receipt of an inheritance is not treated as taxable income (the relative / on-death exclusion in Section 56(2)(x)), so moving your parent's shares and units into your name creates no tax bill. The tax question only arises later, if and when you sell. That is an important distinction, because families sometimes delay transmission for fear of a tax hit that does not exist.

What transmission does require is proof: proof that the holder has died, and proof that you are the person entitled to the securities. The exact proof depends on how the holding was set up and what it is worth, which is the next thing to pin down.

How a holding is structured decides how hard the transmission is, so the first step is to check, folio by folio and account by account, how each one was held.

Where there is a surviving joint holder, the securities simply continue with them, and the deceased's name is removed against a death certificate — the lightest path. Where there is a registered nominee and no joint holder, the nominee can have the securities transmitted to them on a transmission request with the death certificate and their own KYC, without producing a will or court document. Where there is neither a joint holder nor a nominee, you fall onto the legal-heir route, and that is where the documentation becomes heavier.

Remember that a nominee receives the securities as a custodian, not necessarily as the final owner — if your will or succession law gives the asset to someone else, the nominee holds it for them. That nominee-versus-will distinction has its own page; here, the point is simply that a nomination is what gets the securities moved quickly.

On the legal-heir route — no nominee, no joint holder — the depositories and the RTAs operate value limits for what they call simplified transmission. Below the prescribed limit, they can transmit on a lighter documentation set: a transmission request form, the death certificate, your KYC, and typically an affidavit, a no-objection or release from any other heirs, and an indemnity. Above that limit, they are entitled to insist on stronger proof of entitlement — a probated will, a succession certificate, or a letters of administration — before they will move the securities.

We deliberately won't quote a single rupee figure for the threshold, because SEBI and the depositories revise these limits and they can differ between the demat (depository) side and the mutual fund (RTA) side, and a stale number would mislead you. What is stable is the principle: small holdings transmit on an affidavit-and-indemnity basis; larger ones can trigger a demand for a court document. So the practical move is to establish the current limit for each holding before you start, so you know upfront whether a court route is in play.

This is also where the share and mutual fund transmission ties back to the broader estate: if a succession certificate is needed anyway for bank deposits, the same certificate usually serves the securities, which is why mapping the whole estate first avoids running two separate court processes.

There is a step that catches NRIs specifically. The securities cannot usually be transmitted into a plain resident account once you live abroad — they need to land in an account that matches your status. For shares, that means your own NRO demat account; for mutual funds, units are transmitted into a folio held on a non-resident (typically NRO) basis. If you don't already hold one, opening it — with full KYC: PAN, passport, visa or residence proof, overseas address, and FATCA / CRS declarations — is part of the transmission, not a separate afterthought.

Your parent's KYC does not carry over to you; the KYC that matters is yours, as the receiving heir, and it has to reflect your non-resident status. Where your own PAN or KYC has lapsed or still shows a resident status from years ago, that has to be corrected first, or the transmission stalls at the account stage.

The reason to sort this early is sequencing: the RTA and depository will not complete the transmission until there is a compliant account to move the securities into. Lining up the NRO demat and the KYC in parallel with assembling the death and heirship proof keeps the process moving rather than hitting a wall at the final step.

When you eventually sell the transmitted shares or units, your cost is not zero and it is not the value on the date you inherited them. Under Section 49(1) you step into the deceased's shoes — their original cost of acquisition becomes yours, and the holding period includes the years they held the asset, so a long-held holding is almost always long-term in your hands.

This is why transmission is the right moment to capture the cost history, even if a sale is years away or not planned at all. The original contract notes, the purchase price and dates, any bonus or rights issues, the consolidated account statement (CAS) — these are far easier to reconstruct while the folios are being touched than to dig out later. For shares listed on a recognised exchange and acquired before 1 February 2018, the grandfathering rule under Section 112A also lets the 31 January 2018 value feed into the cost, so capturing that reference point matters too.

The transmission itself triggers no tax. But the figures you secure during it are exactly what keeps a future sale from being taxed on an inflated, zero-cost gain — so the discipline at this stage pays off whenever the heir decides to sell.

Priya, an NRI in the US, is the heir to her late father's holdings in Mumbai — shares in a demat account at one broker and three mutual fund folios. Her father had named her as nominee on the demat account but on only one of the three folios; the other two had no nominee and no joint holder.

The demat shares and the one nominated folio transmit on the lighter path: a transmission request, the death certificate, and Priya's KYC. For the two un-nominated folios, the RTA's simplified-transmission limit decided the route — the holdings sat below it, so they could be moved on an affidavit, a no-objection from her siblings and an indemnity, without a court document; had they been larger, a succession certificate would have been demanded. In parallel, because Priya is an NRI, her practising CA made sure she had an NRO demat account with current KYC reflecting her US residence, so the shares had a compliant account to land in. As each holding moved into her name, the CA recorded her father's original cost, the purchase dates and the 31 January 2018 reference value for the listed shares — so that if Priya ever sells, the gain is computed from her father's cost under Section 49(1), not from zero. No tax arose on the transmission itself. The KYC, the cost capture and the tax side were the CA's; the affidavits and any court step, had one been needed, sit with the lawyer.